Are you ready to sell your alarm company?

Six steps to ensure potential buyers see your company as an attractive investment


  • Maintaining accurate subscriber and business records;
  • Reconciling accounts with your central station on a monthly basis; and
  • Adopting and following sound billing and collections practices, including canceling accounts at 90 days past due.

4. Maintain valid subscriber agreements. Valid, enforceable, and assignable subscriber agreements not only help to establish your qualified account base, they are critical to protecting both your company and your potential buyer — before, during and after the sale. Your subscriber agreements must comply with state and federal laws — especially those relating to consumer contracts for residential accounts — and include specific information and key provisions to protect your company from legal and financial liability.

Without contracts meeting the necessary legal standards and providing appropriate protections to your company, most buyers will view your accounts as worth little, if anything. If your company has not documented every account with a valid agreement, you can still take protective remedial measures. Review your account records, identify any accounts that do not have proper contracts and have the subscribers sign new contracts.

5. Manage installation and monitoring to facilitate easy account transfers. The more difficult it is for a buyer to transfer and integrate your accounts into its monitoring system, the less the buyer will be willing to pay for those accounts. A high-value company anticipates the technical aspects of selling its accounts. It maintains good installation practices, such as setting up panels to receive downloads remotely, which eliminate the need for manual reprogramming. It uses standard equipment that is technologically sound and scalable, accommodating advances in technology and increased subscriber needs.

Contracting with your central station to have clean receiver lines and owning your toll-free receiver number (or IP address) is also essential to ensuring your potential buyer will not encounter any technical issues in transferring your accounts to its central station.

6. Maintain an appropriate insurance program. Potential buyers not only look for the key elements that make your accounts a good investment, but also at whether you would be a sound business partner. One key indicator is how your company manages risk through insurance. The best way to make sure you have the right type and amount of insurance is to use a professional agent who will help your company put together a comprehensive insurance program.

This article was adapted from Alarm Capital Alliance’s recent whitepaper, Transforming Your Company into a High-Value Business, which is available at www.alarmcapital.com/media-center/whitepapers.

Amy V. Kothari is President and CEO of Alarm Capital Alliance. Under her leadership, ACA has grown to more than 170,000 customers nationwide, generating $5.9 million of RMR. She received the Women's Security Council 2012 Women of the Year Award for the Dealer category. To request more info about ACA, please visit www.securityinfowatch.com/10746349.