Getting into the Alarm Business

Once the alarm is installed, you will need to monitor the system, so that if the premises is subject to a break-in or fire, or if the equipment fails in some regard, the police, or EMS or client, or you will know about it.

You will develop a relationship with a contract (third party) monitoring service. Your systems will be programmed to send them the signals from your panels, and they’ll be programmed to provide the exact reactions to the signals.

Besides the usual burglar and fire alarm monitoring, new products and services are offered which involve third party monitoring. It’s a thriving industry and a good central station is critical for the success of your alarm activities.

New services such as medical alerts, building systems monitoring, remote video surveillance and off-site access control are all very important elements of the electronic security industry.

For those new to the alarm industry and even for those who’ve been in the game a while, authorized Dealer Programs are attractive because of the benefits and services they can provide.

These programs have evolved from the original account buy-out, where a dealer wanted to retire or get out of the business, and someone, frequently his central station, would offer him cash for the accounts. Sometimes a dealer didn’t want to get out of the business, but just needed some cash, so the central station would acquire some of the accounts, but the dealer still did the billing and the service.

There are many variations on these deals, and there may be a program out there just right for you. If you ever look in the yellow pages at anything else but “LOCKSMITHS,” you will see several major players under the “ALARMS” category, and many of the dealers are locals who have franchises, or certifications, or partnerships with National Brands, and they enjoy the benefits and advantages of these associations.

There are primarily three types of Authorized Dealer programs, but each one has its own unique characteristics.

Central Station Based: The relationship hinges from the monitoring relationship between the dealer and the central. Dealer programs offered by monitoring services companies give a variety of benefits such as leads and sales training. Mainly, however, they are about buying monitoring agreements to provide the seller with capital to further grow their businesses. Some programs will buy all your contracts, while others encourage that the dealer retain ownership of a portion of their contracts or give options to buy them back later.

An important element of the process is the multiple offered by the buyer for the contract. The average monitoring contract is $29.95 per month, and the typical multiple being offered is 30. This means the seller get $900 for each contract.

Equipment Manufacturer Based: The relationship hinges on the dealer’s expertise and commitment to a particular brand of equipment. These programs offer dealers incentives to sell product. In return, the dealer receives sales training, help with bid preparation, sales leads, sales and marketing materials and special authorized dealer discounts. Additional rewards are granted the better the dealer’s performance.

Installation Company Based: The relationship hinges on the dealer’s use of the national company’s marketing, monitoring and product resources offer sales training, management and operations support and assistance in lead generation.

RESOURCES

National Burglar & Fire Alarm Association is the nation’s oldest and largest organization dedicated to representing, promoting, and supporting the electronic life safety, security and systems industry. Member companies specialize in a wide spectrum of services to commercial and residential consumers, including security and fire alarms, video surveillance, access control and monitoring. Web site: www.alarm.org.

The Central Station Alarm Association Organization represents providers, users, bureaus, and other agencies of UL-Listed and/or FMRC-Approved central station protection services. Web site: www.csaaul.org