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We advise security companies of all descriptions on how to prepare for an efficient disposal process

Sell My Security Alarm Company

Selling My Business has the industry specific knowledge and expertise to arrange successful sales of security alarm companies and CCTV businesses

If you are looking to sell your security alarm and CCTV business then no doubt you will be looking for a sale that is quick, easy and most of all profitable.

Selling My Business has over 30 years’ experience selling security businesses. We understand that to broker successful sales within the security industry requires more than just placing an advert and waiting for responses to come in. With our security sector specific knowledge we are able to discreetly market your security company directly to realistic buyers and understand how to maximise both the sale speed and profitability.

Having raised over £500 million in business sales, Selling My Business has the contacts, experience and knowledge required to sell your security alarm company or sell your CCTV business.

Get a business valuation or contact Selling My Business to find out more about how we can help to sell your security business.

Important Points When Selling Your Security Business

Competition within the security business industry is fierce; with a growing number of SME’s vying for contracts. However market trends are showing an increase in domestic security concerns and a corresponding growth amongst security alarm and CCTV installations. Ensuring that your security business is well placed within this market to achieve a successful and profitable sale requires foresight and planning. Our security business sales experts are able to advise you on the best route to market and how to ensure that your business is sale-ready.

We can advise and support you through all stages of the sale of your security business, ensuring that:

  • We place a realistic valuation on your security business, that satisfies your profitability targets and offers an attractive market price
  • You are connected with robust and realistic buyers fast
  • Negotiations are handled discreetly utilising strict confidentiality clauses to protect your businesses interests
  • Your business is fully ready for the due diligence process and all matters are handled proficiently
  • All paperwork referring to the sale of your security business is meticulously prepared
  • We advise you on how to handle the sale in the most tax efficient way possible

Why Sell Your Security Business?

Overall the UK security industry generated a £9.1 billion turnover in 2016, which represents a 65% increase since 2010. It employs over 120,000 people both directly and indirectly and accounts for over £4 billion of UK exports. More specifically the UK electronic security systems market is forecast to grow at between 2.5% to 3% per annum.

This rising market is attributed to an increasing concern regarding home security. Monthly burglary statistics sit at around 35,000 per month, with 56% of these crimes taking place when there is someone at home and 44% being perpetrated in broad day light.

There is also increased concern around the raised global terror threat. This, along with the general increase in the amount that consumers are spending on their homes and businesses, is meaning that the security industry is currently one of the UK’s most buoyant sectors.

But regardless of these positive industry statistics there may be many other factors affecting why you choose to sell your security business. You may be looking to fund your retirement or free up some cash to explore your next venture. Or alternatively profits may be looking good and you feel that this is the perfect time to sell.

Whatever your reason for wanting to sell your security business our security industry business sales experts are able to thoroughly assess your business and its place in the overall UK market. This will allow a realistic business valuation to be set and for us to market your security business appropriately and effectively.

When Is The Right Time To Sell Your Security Business?

Knowing exactly when to sell your security business can be a difficult decision. Just because the market is heathy doesn’t necessarily mean that you are ready to sell your business. In fact most successful business sales have been planned at least 2 or 3 years in advance. This planning time will allow time to get your books in order, instigate any necessary succession planning and ensure that your business is looking as attractive as possible to potential buyers.

Our security industry experts understand that different businesses within the sector may actually be in the right place to sell at different times, regardless of overall market trends. We will forensically analyse your business and its place in the market to discern if a profitable sale is achievable – and are committed to being completely honest with you about the results.

Valuing Your Security Business

Valuing any business can be a very difficult task - essentially the value of a business is whatever someone is willing to pay for it. However there are a number of accepted techniques that can be used when valuing a security business. Whilst companies in many industries are assessed using their EBITDA (earnings before interest, tax, depreciation and amortisation) value multiplied by an agreed figure, many companies within the security sector are actually valued on a multiplier of their recurring monthly revenue (RMR).

Which method is used to value your security company depends on your company’s business model. If your business mainly revolves around one time installations of security alarms and CCTV systems etc, then the EBITDA method may be more appropriate. However if your business hinges on ongoing contracts with clients post installation, then a multiplier of RMR could provide a more accurate view, as the main asset is not, in fact, their gross sales.

With both methods an important consideration is the multiplier that is applied to either the EBITDA or RMR value. There are a number of factors to take into account which could either increase or decrease the multiplier value.

This could include:

  • The number of residential versus commercial clients, as this can affect the longevity of contracts and recurrence of jobs
  • The type of contracts that any recurring clients were signed up to, whether or not these include acquisition clauses for a change of ownership
  • Company attrition rate
  • The use of specialised versus mainstream equipment

Our business valuation experts are able to provide an accurate and robust assessment of the value of your security business. We will thoroughly analyse your business and market it at a price which both achieves your ideals and attracts potential buyers.

How to Make Your Security Business Attractive To Potential Buyers

If you are looking to sell your security alarm or CCTV business then there are a number of steps that you should take to maximise its saleability and thus the profitability of the sale. Some of these are common to the majority of business sales. For example taking steps such as ensuring that your business accounts are in order will not only make your business more attractive to potential buyers but will also ensure that the correct valuation is set and that fewer issues arise during the due diligence process.

Also ensure that you factor in any goodwill that is inherently tied up with the departing owner which could affect the business after the sale. For example if many of your clients come from personal relationships then they may be less reliable post-sale. However if you plan your business sale effectively then this will give you time to slowly move key clients onto incentivised senior staff members who will be remaining in the business after the sale.

However there are also a number of factors that are specific to the security alarm and CCTV industry that must be considered when you are in the planning stages of selling your security business. With our experience and knowledge of the security industry our expert team are able to fully advise you on both the generic and sector specific steps that you should take to maximise the attractiveness of your security business.

Strengthen Ongoing Contracts

If your business includes ongoing maintenance and testing/inspection contracts then it is important to ensure that, as much as possible, these clients are tied into robust and ongoing contracts that will extend after the sale. This will give potential buyers an idea of the likely turnover after the sale and also provide some guarantees of this. Also if your business has a large number of clients who regularly use your service but are under no contractual obligation, then it is worth getting them signed up to a recurring contract as soon as possible.

Contracts will be seen as more valuable if they include clauses such as Auto-Renewal and Assignability are included. Auto-Renewal clauses state that contracts will automatically renew, usually on an annual basis, which will give more stability and longevity to the contracts – although it is important to still give clients the right to cancel to avoid potential costly and damaging legal repercussions. Assignability clauses cover the right of the provider to assign or automatically transfer contracts to the new owner. Both of these clauses will strengthen your contracts and thus make your business more attractive to potential buyers.

Also consider offering your clients monthly service contracts, with associated monthly payments as opposed to annual contracts. This will ensure a more steady revenue stream into the business.

Utilise Mainstream Panels and Equipment

Basing your business on the installation and maintenance of equipment from smaller or start up alarm or CCTV manufacturers, may allow you to offer reduced costs to your clients, or higher profits for you. However this may be detrimental to your business sale as new owners may be wary of continuing maintenance contracts on unknown equipment. Therefore in the time (ideally years) running up to a business sale it may be worthy looking into switching to using more mainstream equipment that will be familiar to buyers.

It is also worth ensuring that you are fully up to date with any new to market products and technological developments. The security alarm and CCTV industry is ever evolving as new products and technologies are developed. Ensuring that you are at the forefront of this will mean that your business is obviously forward-facing and so buyers won’t be put off at the thought of having to immediately commit time and resources to get your business up to date.

Diversify Your Client Base

Buyers are often most attracted to firms which have a good mix of both residential and commercial security alarm and CCTV installation and maintenance clients. Also businesses which offer a broad range of services, such as providing both security alarms and CCTV, are likely to seem more robust in the face of industry fluctuations and therefore more appealing to potential buyers.

Certification

Ensuring that your staff are all fully trained, such as completing a NVQ Level 2 or 3 in Electronic Security and Emergency Systems, and that the business is a member of one of the relevant professional bodies and has received Third Party Certification, such as from the Security Systems and Alarms Inspection Board (SSAIB) or the National Security Inspectorate (NSI), will provide potential buyers with peace of mind about your businesses credentials.

During the sale process these memberships and corresponding Third Party Certification will need to be transferred to the new owners. This may, however require the new owner to undergo the screening process, as for most schemes both the owner and any installation etc must be fully screened. The screening process (such as that from the SSAIB) often includes providing the following details:

  • Proof of identity
  • Proof of residency
  • Character references
  •  If the individual has a criminal record or convictions or pending actions
  • Bankruptcy or court judgments
  • Continuity of records - education, employment, unemployment or gaps in employment.

If the new owner may have any difficulties around this then certification may be refused. This matter should therefore be addressed early on in the sale process to avoid wasting time with a buyer who will ultimately be unable to continue running the business.

Renew or Stabilise Your Lease

If you lease business premises then it is worth either fixing a long term lease or at least renewing your current lease before offering your business for sale. If a buyer is looking to continue your business as a going concern then it may be detrimental to have a short term or soon to finish lease on your premises that the new owner will then immediately have to either re-negotiate or go through the process of finding new premises.

For more information or advice about selling your security business contact Selling My Business today.

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