I've been an alarm dealer for nearly 20 years and I want out. I don't have a bunch of accounts 140-160 give or take. I don't have asshole contracts. Just simple annual auto renewing contracts with 60 days written notice to cancel. Last time I looked into it none of the big contract buyers wanted to talk to me (I had 180 or so contracts then), so I am not sure where to go with this. I'm just tired of being a contractor. I want to do something else. Heck even just being an unlicensed handyman would be a pleasant change. Anybody know who I would talk to about getting a decent buy out on my accounts?
Not that I can help you much but all I can suggest is that you keep trying. You might even try calling some of the local alarm installation companies or other central stations in your area. Sometimes they're open to taking ov er a small quantity of accounts. Of course, since you don't have contracts, it's going to be tougher to find a buyer but sometimes there are alarm com panies that are looking to grow and will take a chance on buying non contra cted accounts. Don't expect that they're going to pay a whole hell of a lot for them though. I would expect that if you could show that your accounts were with you for a long period that it would add some credibility when you were talking with them. Keep in mind that if you sell your accounts to any one but your own central station or to a company that also uses your centra l station, you will have to go to all of your accounts and reprogram them t o dial the new owners central station and they will also want to hold some money in escrow for a year or so to cover any accounts that cancel in the y ear following the sale. You might ask your central station if they know of any of their other installation company customers that might be interested in buying your accounts.
Just an aside, there used to be a participant in this group that swore that term contracts weren't necessary and he was selling systems with one month cancellation notices. He just couldn't come to terms with his thoughts tha t term contract were taking advantage of the customers versus benefitting f rom his years of efforts. I sure wish he was still here to read this. I ca n't imagine what would make anyone not want to protect their investment. 18
0 accounts @ $20.00 a month could have brought you somewhere around $40 to
45,000.00. Maybe even more during this time of low interest loan rates. I w onder if you can even expect half of that.
I just saw this today or I would have replied sooner. I am not in the alarm business.
Years ago, I used to work for a business broker listing and selling small businesses. One small business that I listed was a small ambulance transportation company. The first thing that I did was write a letter to all of the other ambulance transportation companies in the area (there were only about 4 or 5 of them) and, without giving the name of the company, I wrote that I had just listed an ambulance transportation company for sale, and if they wanted to sell their business, or if they wanted to expand their business and buy this one, to contact me. The listing sold in about 2 weeks.
A year ago, and completely unrelated to the above, the oil company that I buy my heating oil from for my home announced that they were "merging" with another local heating oil company. What really happened was that the other company bought the oil company that I was using, but they did it in the form of a "merger" and kept my heating oil company's name for a while.
Your circumstances are different, of course, and you are not a business broker. But, the point of all of this is that I think your best potential buyers for your company would be your local competitors in the business. You may want to just contact them directly and pitch is as you are thinking of expanding your business by merging with another local company where the two companies could benefit by sharing administrative and overhead costs, etc. But, the reality would be that any merger that you do would end up being a takeover of your company. They wouldn't have to know that at first, and they could initially think of it as a merger or partnership deal. My guess is that my oil supplier company sold their business to the oil supplier which probably paid them for any assets such as vehicles, maybe real estate, etc. and then paid them a percentage of the revenue on all of their existing accounts for "X" number of years.
I just thought that I would pass those ideas along in case they are helpful.
Or, you could advertise in Craigslist under "Businesses" that you have an alarm company franchise for sale with good pricing, financing, and terms and with an initial existing account base to help them get started. Then sell that sucker to the new buyer as a franchise and make money on the sale and maybe a small percentage franchise royalty fee on all new accounts that the franchise brings in.
No, long term contracts are not necessary; however, they will help a buyer who doesn't know you. If for example, you are using the monitoring faciliti es of a large alarm company, and they know your attrition rates, then the r isk is much lower. I have a standing offer for my 1200 accounts, NONE of wh ich have more than a month to month contract, of 28 times monthly. I don't intend to sell, so it's pretty academic anyway
r who doesn't know you. If for example, you are using the monitoring facili ties of a large alarm company, and they know your attrition rates, then the risk is much lower. I have a standing offer for my 1200 accounts, NONE of which have more than a month to month contract, of 28 times monthly. I don' t intend to sell, so it's pretty academic anyway
Haven't heard from you ..... didn't think you were stopping in anymore.
I see you're still beating the ol no contracts drum .... Oh well you old fo lks never seem to want to try it a different way.
By the way, I don't know if there's a market difference between here and th ere but I've got a $40.00 on the dollar offer on the table right now. I hav e no idea what it would be without contracts but it was the first question asked after "how many accounts do you have?" I haven't decided yet if I wan t out but I know as the interest rates go up the offer will be reduced. We' ll see what happens. (what that really means is .... I have to check with my wife :-)
Hi John, I don't know where or how you obtain your leads from. I no longer have to hunt for leads but back in the day, I would designate a day to go d oor to door in shopping centers just asking if people wanted an alarm syste m. I would note where new shopping centers were being built, keep a log of my visits and noting possible installs and when to re-vist to take another shot at getting the job. Don't quote anything elaborate, front door, back d oor, glass break and that's it. Keep the price as low as you can. Be prepar ed for a high attrition rate as small business fail. So make sure you don't get into any long term payment agreements. What worked for me (depending u pon the size of the job) was to ask for two to four hundred up front and $
40.00 a month until the total was paid off then it would drop to $20.00 per month. Really, equipment is paid for by he $200 and the $40/60 per month i s your profit to be paid off in a few months. Even if they go out of busine ss in 6 months your ahead. Some of these accounts will thrive and eventuall y you'll get their homes and referral. Another thing I've always done it to write a brief newsletter every 3 to 4 months that I include with the monit oring bill. Nothing fancy, just a single sided typed review of some of the jobs you're doing, some statistics about the advantages of owning an alarm system, how to check their alarms etc, etc. And of course outlining what se rvices you provide. Offer a month or two or three credit to anyone making a referral that turns into a job. Don't do random mailings. Depending upon t he neighborhood, sometimes door hangers work. And don't forget to stop in a t every construction site and ask to speak to the builder, foreman or homeo wner or get their telephone numbers to follow up. If no one is there, tape you card to the front door. Write a short personal note on the card, tellin g them what you can do for them.
Just remember, you're sowing seeds. Some will come up and some wont but eve ntually if you get enough seed out there it begins to grow a crop that you don't expect. I've had people call me two years after I scouted a housing p roject while it was under construction.
Also, networking with other trades helps some too. Join a business club in your area. The insurance guy will have a customer that's had a break in, th e contractor will be rebuilding a house that had a fire, the plumbers custo mer had a flood ...... and so on.
Don't fret over the lowballers and free alarm phonies out there. Their cust omers were never your customers to begin with. Anyone that believes they ca n get something for nothing isn't smart enough to be your customer.
Well, its still going pretty rough. The low baller took the time to send me a note telling me the number I had put on the bottom of the info form I sent him. LOL. When he made his last offer it was to sign all the accounts over to him, and he would pay me one year revenue (AS IT CAME IN). In otherwords zero risk for him and I have to trust he will send me some money someday. I have two others who are interested, but have not heard any progress back from them. I did get a call from a company in Texas asking if I would service their accounts in my home town. I wonder if the one sales agency I have contacted was in touch with them and they were seeing if they could find a servicing dealer.
Sigh! I guess I am doomed to die in my office pushing paper for the government for free.
Disregarding what your so called potential buyer are doing to you .... but
concerning your business potential............. I gotta tell ya, (and I know this is no consolation to you in your present mind set)
but I know people who would give their left nut to be in your position. If you played it right, you can make a pretty penny doing service for large co mpanies. And if they don't play nice and you set it up properly, you can te ll them to shove it at any time. Have them set up a fund to draw from or se t it so you have some way to not get stuck with the bills is your major con cern. An attorney would be the best thing to have if it's a big company you r dealing with. You have control of the expenditures, and the scheduling. S et up an account that they pay into but no withdrawal. They set up a accoun t that you send to. You set the rules. If they don't agree, pass on it. As I say, if you played your hand right, something like this could grow to a m ulti state service company. There's a company in upstate New York that no o ne has ever heard of that thrives on doing alarm service and maintenance fo r large chain stores and national companies all up and down the east coast. Thousands of locations. Road crews in every state. They only have a few ac counts of their own. The owners are hardly ever in the office and live in f abulous homes. It's good to be King!
I did service work for other companies a long time ago. I've either had to totally redo total shit work, or I had to bend over while simultaneously kissing ass. I've got two other totally unrelated business concerns going that I enjoy doing. I want to do those and get out of contracting.
In a year or two I'll be able to dump contracting whether I find a buyer or not. I almost could now, but I hate to treat the customers who have supported me for so many years like that.