Question about buying alarm accounts

Question about buying alarm accounts
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Subject Author Date
Question about buying alarm accounts Stephane Laviolette 01-17-2006
Posted by R.H.Campbell on January 18, 2006, 2:55 pm
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Stephane, I suggest you be very careful about buying accounts from just
anyone, especially the very small dealers. There's a lot you have to do
upfront before you even try to determine a fair market price for them. A few
thoughts below:

1- You might want to be shown the customer records and some relevant
information showing the cash flow coming into the business. Do an analysis
to see what revenue stream you can realistically expect from them.
2- What is the sellers reputation in the industry re quality of installs,
customer service, time in business etc.
3- How many different makes and models of panels in his customer base, and
are they all on line currently
4- Is he doing his own billing or subbing it out. How big a problem are "non
payment" accounts. How many does he currently have that are not fully paid
up to date.
5- What is his current attrition rate versus the industry norm.
6- What does his current monitoring station say about this dealer (off the
record...)
7- Did he install these panels himself or sub them out.
8- What assurances do you have that his clients will be happy to swing over
to you ? How does this client plan to advise these clients of his company
sale (or does he at all...?)
9- What length of term contract applies to these customers ? (but don't
depend too much on that; if they are unhappy, and choose to leave for other
reasons, you will likely be able to do nothing short of suing in small
claims court......)

There are a few dealers around town here that have approached me to sell me
their accounts. I wouldn't touch them with a ten foot pole ! And there are
others who's accounts would be as good as gold in the bank !

In our business it is "buyer beware" (for both end user and account buyer
alike...).

RHC

> true its not much
> but i'll be starting on my own
> 100 accounts could give me a good start by at least paying for my store
> rent
> or part of it
> but the technical aspect I got warned about already..
> and it makes sense, it could be alll junk
>
>
>> Be really really rweally careful - if they're junk installs, or slow
>> pays,
>> you're buying a headache.
>>
>> 100 accounts is not very many for a "jumpstart"...you could easily do
>> that
>> in 6 months with a couple of installers on your own. Besides it aint much
> of
>> a monthly income after you pay monitoring and billing costs and taxes.
>>
>>
>>
>>
>> | Hi
>> |
>> | I hope this is the right place to ask this question...
>> |
>> | Well i'm looking to get into alarm sales & monitoring and may have an
>> | opportunity to purchase existing alarm account.
>> | If contracts have 12 + months remaining and charge 16$ monthly what do
> you
>> | thin is a resonnable price to buy 100 or so of these accounts ?
>> | This would be great and give us a jump start and a steady monthly
> income.
>> | any advice would be appreciated
>> |
>> | Stephane
>> |
>> |
>> |
>>
>>
>
>


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Posted by Jim on January 20, 2006, 12:59 pm
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R.H.Campbell wrote:
<SNIP>



> 9- What length of term contract applies to these customers ?


Really?

Hmmmm!


<SNIP>


Posted by R.H.Campbell on January 20, 2006, 1:35 pm
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Of course it matters Jim; I never said it didn't (your sarcasm
notwithstanding). However, it is not the be all and end all you assume. And
consumers are still well advised to shop for the shortest contract possible
as being the best thing (from their perspective...)

A long term contract probably matters somewhat more to a conservative minded
bank should you wish to borry against the equity, than it does to a buyer,
since the quality of the company / accounts in question is just as important
if not more so to the buyer (he has to live with them and service them) ! We
have a guy here in town we call "Jimmy the sleaze" ! No one will touch his
accounts; we even check them out beforehand before agreeing to take them
over. Buying his accounts at any price would be a disaster !! I have no idea
what he will do when he decides to leave the business (hopefully sooner
rather than later...)

Any company with a good reputation in the industry should have no trouble
selling their accounts to the RIGHT BUYER. Speaking from personal experience
with the two companies that I have dealt with, they seem to be just as
interested in how much work it will be to swing the account (once they've
determined they value your accounts for purchase at all). The actual monthly
dollar amount counts for far more, since any price determined is ultimately
based on the revenue stream. In our area, ALL OTHER THINGS BEING EQUAL,
monthly, one or three year terms all bring about 30 times monthly. It may or
may not be different in other areas. And clawbacks due to attrition can also
make a significant difference in the actual end value.

It would be interesting to be able to see some formal publications on this
issue of buying and selling accounts, since most of us will one day be in
that position.

RHC


>
> R.H.Campbell wrote:
> <SNIP>
>
>
>
>> 9- What length of term contract applies to these customers ?
>
>
> Really?
>
> Hmmmm!
>
>
> <SNIP>
>


I choose Polesoft Lockspam to fight spam, and you?
http://www.polesoft.com/refer.html



Posted by Crash Gordon on January 18, 2006, 6:09 pm
If you were  Registered and logged in, you could reply and use other advanced thread options
Well if you got the cash and are not borrowing money to buy the
accounts..maybe it would make a little sense. Personally, I wouldn't do
it -16 bucks is not much rmr after expenses. You'll probably lose 10-20
during the transition too, so your monthly may be 1300 - expenses.




| true its not much
| but i'll be starting on my own
| 100 accounts could give me a good start by at least paying for my store
rent
| or part of it
| but the technical aspect I got warned about already..
| and it makes sense, it could be alll junk
|
|
| > Be really really rweally careful - if they're junk installs, or slow
pays,
| > you're buying a headache.
| >
| > 100 accounts is not very many for a "jumpstart"...you could easily do
that
| > in 6 months with a couple of installers on your own. Besides it aint
much
| of
| > a monthly income after you pay monitoring and billing costs and taxes.
| >
| >
| >
| >
| > | Hi
| > |
| > | I hope this is the right place to ask this question...
| > |
| > | Well i'm looking to get into alarm sales & monitoring and may have an
| > | opportunity to purchase existing alarm account.
| > | If contracts have 12 + months remaining and charge 16$ monthly what do
| you
| > | thin is a resonnable price to buy 100 or so of these accounts ?
| > | This would be great and give us a jump start and a steady monthly
| income.
| > | any advice would be appreciated
| > |
| > | Stephane
| > |
| > |
| > |
| >
| >
|
|
|



Posted by Mr.Double-sided tape on January 18, 2006, 9:37 pm
If you were  Registered and logged in, you could reply and use other advanced thread options
Save your money. There's no need to buy existing accounts.
Those accounts will run you close to $50,000.00 and the law of averages
says at least 20% of them are crap. Rather than blow 50k on someone
else's headache use it to fund equipment/overhead on new accounts.
If you really want to make some money just have Bob Campbell set you up
as an area rep in his Loxxon Authorized Dealer territory.

Stephane Laviolette wrote:
> true its not much
> but i'll be starting on my own
> 100 accounts could give me a good start by at least paying for my store rent
> or part of it
> but the technical aspect I got warned about already..
> and it makes sense, it could be alll junk
>
>
> > Be really really rweally careful - if they're junk installs, or slow pays,
> > you're buying a headache.
> >
> > 100 accounts is not very many for a "jumpstart"...you could easily do that
> > in 6 months with a couple of installers on your own. Besides it aint much
> of
> > a monthly income after you pay monitoring and billing costs and taxes.
> >
> >
> >
> >
> > | Hi
> > |
> > | I hope this is the right place to ask this question...
> > |
> > | Well i'm looking to get into alarm sales & monitoring and may have an
> > | opportunity to purchase existing alarm account.
> > | If contracts have 12 + months remaining and charge 16$ monthly what do
> you
> > | thin is a resonnable price to buy 100 or so of these accounts ?
> > | This would be great and give us a jump start and a steady monthly
> income.
> > | any advice would be appreciated
> > |
> > | Stephane
> > |
> > |
> > |
> >
> >


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