How to Secure Capital for Your Security Business
The security industry is a highly competitive field, making raising capital more critical than ever. Here are three ways to raise capital explained by a SSI Hall of Fame member.
While the security industry as a whole has been prospering, it has also never been more competitive. 10 years ago, would you have ever thought you would be competing with an online bookseller, or that a search engine would be selling smoke detectors?
As the security industry evolves, your company needs to evolve with it. Industry veteran and SSI Hall of Famer Richard Ginsburg recently conducted a webcast titled, “You Are Not Only Selling Burglar Alarms Anymore: Competing in a New World of Consumer Technology.”
In the webcast he details seven keys to succeeding in this market. The first key is having the capital to succeed. Ginsburg describes capital as the oxygen of the security industry. Here are three ways to make sure you have a proper capital structure to compete.
Your Own Capital
With your own capital, you control your own destiny. You answer solely to yourself. That being said, you want to treat it like it’s outside capital and police yourself. Set up KPIs and monitor costs and RPIs. Think like an outside investor.
You also want to make sure you choose your customers wisely since each one is an investment.
Ginsburg says he has raised nearly $2 billion dollars of bank debt through various sources, including:
- Local/regional broad based lenders (up to $10M)
- Larger club banks who specialize in the space ($10M to $100M)
- Large syndicated lenders (over $100M)
Fortunately lending markets have been very supportive of the security space. However, you’ll want to make sure your financial house is in order, ensuring you have key metrics such as attrition creation, cost to create a customer and customer satisfaction data.
A Dealer Program
Dealer programs could enable you to grow while keeping a portion of your production or monetize customers immediately in real time.
Dealer programs can also allow you to focus on one or two things like selling and installing while offloading service, billing, retention, marketing, etc. to your dealer partner.
Get the full details about each method in the video above.
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