You might think this question is only relevant if you’re actively considering selling some or all of your alarm accounts. While it’s true that knowing the real value of your current portfolio is critical if you’re selling, understanding the criteria that buyers – including Alarm Capital Alliance (ACA) – use to determine portfolio value will also help you build and run a profitable alarm company. Focusing on these key criteria can help you maximize revenue, reduce costs, and identify areas in your company that may need attention. No matter what your goals or your timeline, achieving your business objectives – now and in the future – requires that you operate your business in a way that maximizes the value of your accounts.
During the process of buying alarm accounts, ACA conducts “due diligence” – looking at specific criteria to calculate the recurring monthly revenue (RMR) you are selling and to determine the multiple of that RMR that accurately reflects the value of your portfolio.
The criteria that we use in due diligence includes:
- RMR of the accounts for sale
- Geographic location of those accounts
- Your company’s attrition and account aging
- Customer payment history
- Your accounts receivable
- Billing and collection data
- Your central station reports and information
- Your service and maintenance practices
- Your subscriber contracts including whether all of the accounts for sale have valid and appropriate contractual agreements.
ACA also looks at financial data on your company, as well as licensing, permitting and insurance information. Some of the information we require will be found in your customer and business records, and other information must come from your central station.
We’ve also developed our Portfolio Valuation Calculator, based on our acquisition process, to help give you an idea of the value of your accounts in a sale to ACA versus other buyers.
Click here to access the
Portfolio Valuation Calculator. Of course, this calculator can only give you an estimate of the value of your portfolio. If you’re ready to explore selling some or all of your alarm accounts, please
contact us immediately.
