First Step in Selling your Security Alarm Company: Hire a Broker
Whether you are selling your alarm security company or selling your security alarm accounts, there are a lot of variables to consider. Are you ready to retire or change industries? Are you hoping to profit from your accomplishments while remaining in your business? Or perhaps you’re experiencing drastic changes in your circumstances that require a quick exit strategy? Whatever your situation, Legacy Consulting can provide you with many advantages, and connect you with security alarm company buyers that provide a custom fit for your needs. Some of these advantages may include:
- Uncompromising Discretion and Confidentiality
- Highly Competitive Multiples
- Favorable Terms and Conditions
- Maximum Cash Distribution or Structured Payments to Minimize Tax Obligations
- Expedited or Scheduled Closings Based Upon Your Exit Strategy
- Special Buyer Programs Allowing You to Liquidate and Continue Operating
- Keeping Your Business Name the Same After Selling
- Undisclosed Ownership Transfer In the Eyes of Customers and Competitors
We can assure you the best buyer for your security alarm company based on your individual needs. For some, a private investment group would present you with the most comprehensive offer. For others, the continued goodwill and care of your customers would make a family-owned business a better fit for your security alarm company. Some security alarm business buyers even offer programs purchasing your assets upfront and allowing you to stay in business, earning additional money AFTER the sale. Whatever your expectations and individual needs may be, Legacy Consulting can help you meet them.
Experienced Security Alarm Business Brokers
With our extensive security alarm company broker experience, confidential relationships, and exclusive marketing techniques, we will provide you with the highest price and most qualified alarm company buyers. All of our brokers have personally founded, bought and sold security alarm companies themselves and been in the security alarm industry for their entire career. They have personal experience from all sides of this industry and will guide you through each step during the complex sale of your security alarm business. We will professionally handle all of your negotiations while preparing and keeping you well-informed through this entire process.
This may be the first and only time you will ever sell your security alarm company. Most buyers have extensive experience in this area and know how to get the best deal for themselves. Having a Legacy Consulting security alarm company broker represent your sale will immediately give you the advantage of decades of experience to negotiate the best terms for you.
Second Step in Selling your Security Alarm Business: Maximize Your Value
Even if you aren’t ready to sell your security alarm business today, you should start positioning your security alarm company now for a premium sale price in the future. We understand the characteristics and expectations required to realize the maximum selling price. Here are a few of the most basic things you can start doing right now to enhance your value:
Use Only Mainstream Panels and Equipment
Trendy and start-up manufacturers may seem like a great idea because they offer discounted prices. However, it may cost you at selling time when buyers are looking for security alarm companies that they can easily streamline into their existing businesses. If you’ve been using a little known supplier, now is the time to switch. As your old customers need upgrades, switch them to your newer mainstream equipment.
Keep Current Contracts
If you do not have customer contracts, it is time to get each and every one of your customers to sign one. This is the most basic and fundamental thing that you should have done BEFORE you put your security alarm business up for sale. Ultimately, the signed paper contract is the single most valuable asset within your security alarm company. In addition, your contracts should be updated and annually reviewed. You should have an attorney familiar with the security alarm business review and approve not just your existing contracts but any new changes that you want to make along the way. A buyer will need copies of differing contracts, and dates as to when each contract went into effect. If any changes to your contracts need to be made, do it on an annual basis. If your contract does not contain a specific “Limit of Liability” or “Evergreen” provision, it could dramatically affect the value of your company.
We can give you guidelines as to what buyers in our industry expect to see in your contracts. Please keep in mind, however, that we are brokers, and your final contract should always be approved by your attorney.
Understand What The “Evergreen Clause” is and Why it Affects the Value of Your Business
The Evergreen Clause is the legal term for provision that automatically renews your monitoring contract with your customers. Customarily, if you have a one year contract term, the Evergreen Clause will be woven into the language of your agreement and automatically renew it annually. Longer contract terms automatically renew proportionately. Without this important provision, buyers value each contract at a lesser amount and some will pass entirely.
Understand the Assignability Clause and Why it’s Important in the Selling of Your Business?
The Assignability Clause is the legal language that must be in your contract in order to properly transfer ownership of your signed contracts to the new buyer. Without this important provision, you will likely be required to obtain new contract from all of your customers which is both costly and time consuming.
A Designated Phone Line
Not having your own designated phone line for your accounts is more than just a burden to bear at closing time. It affects your bottom line! Many times we have seen buyers use this one point to talk a seller down. Unfortunately, it is a fair point. If a new buyer has to physically reprogram and transfer each of your accounts to a new phone line they may charge up to $250 per account for their time and labor. Taking care of this now will save you a huge headache in the future.
Diversify Your Account Base
Your sales staff may have an edge with the commercial market. However, security business buyers are looking for strong companies that have a healthy mix of both residential and commercial accounts. They are also looking for companies that provide burglar and fire systems. Don’t pigeonhole yourself into one area of the industry. Now is the time to train your sales staff to market all these areas of interest.
Strong Existing Sales
If your company has a strong sales history, that is a big indicator to a potential buyer that they could be the lucky benefactor of your success. As a rule, a prosperous security alarm company will generate almost twice as much in new sales and service as they do in monitoring revenue.
Get Your House In Order
Financially speaking that is. Buyers know they are getting a great company when the seller is producing and evaluating financial statements on a regular basis and keeping all records up to date. Staying on top of your receivables is also critically important because many buyers will not purchase accounts in arrears.
Don’t underestimate the monetary value of maintaining good service records and keeping them current. Your installation, service, and preventative maintenance departments should all be run with a solid history and profitability.
Finally, it’s also important that your systems comply with UL, NFPA, and trade custom standards accordingly. As well as keeping the base of your company in the same geographical area as much as logistically possible.