Monitoring Matters: Don’t Leave Your Future to Chance

I have heard it said that the difference between a dream and a goal is a plan. In running a business, it is very important to have a well thought out business plan. The plan should include the company’s mission and vision as well as operating strategies, marketing strategies, budgeting, and realistic goals and forecasts.  

If anyone chooses to run a business without a well devised and carefully orchestrated business plan, they are basically flying blind. Whether such a company experiences success or failure, it will come about as mere happenstance. So my question is this: Who would want to leave the success of their business to chance?

In my 25 years in the alarm industry I have witnessed many great success stories, but unfortunately I have witnessed way more company failures. I can safely say the vast majority of the companies that failed had no such business plan. If any company is operating without a plan, I strongly recommend they circle the wagons and regroup. A business plan can be written and adopted at any point in the life of a company. 

It is important to write a plan that plots the course for success, but it’s equally significant to include an exit strategy centered on maximizing value. All alarm companies should run their businesses as if they were going to sell tomorrow. That’s not to suggest you consume yourself with an “I want to sell my company” mindset. But if a company grooms itself from the outset to sell its monitored alarm accounts, or its entire business, it will generally run smoother and sell at a higher multiple of monthly recurring revenue.

Best Practices to Protect Business

So you may be thinking, “What can I do to plan for selling my company?” If so, I’m glad you asked! Step one is to have good customer monitoring contracts blessed by an industry attorney. These contracts must be treated like legal tender. The longer the term the better, but three years is by and large the accepted norm. I recommend never making changes to the contracts except possibly to the term; however, this should be the exception, not the rule.

Alarm companies must do a good job of recordkeeping. Be sure to maintain good and accurate billing records, and work on getting customers to pay on time. If your company struggles with billing, then consider outsourcing to a professional company that’s better suited and efficient at handling the duty.

All customer and employee records should also be neatly filed and easily accessible. The office should be in order with solid recordkeeping and sound financial reporting. Alarm companies should have records of every system installed with customer information, zone information, special instructions, the type of panel installed and any other critical customer data.

Moreover, alarm companies must make sure that all alarm dialers are programmed to a phone number that they either own or can own in the future. In my experience, sellers have been negatively impacted for not owning their own dialer phone numbers. If a company’s accounts are on a number owned by the central station, the accounts are generally worth considerably less to a buyer. This is because the buyer generally will want to move the accounts to their own central station. If they have to manually convert the accounts, it’s a much more difficult and expensive endeavor.

So to increase chances of success: Have a good plan, execute the plan, keep good records and run the business in an orderly fashion. I also strongly recommend seeking the advice of industry peers. You should never hesitate to seek the wisdom of people you admire.

If you can do all these things, your chances of success greatly increase and your company is more likely to sell for a higher price.

Mark Matlock is Senior Vice President at United Central Control Inc. (UCC), a wholesale monitoring station based in San Antonio.


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About the Author


Mark Matlock is Senior Vice President at United Central Control, a division of Lydia Security Monitoring Inc.

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