The Big Idea with Ron Davis
September, 2015

Swim Upstream to Avoid Competitive Waters

If you had just one really great idea you could share with the alarm industry, what would it be?

This month we feature Dorsie Mosher, one of my Partners at Davis Mergers & Acquisitions Group.

MOSHER’S BIG IDEA:

If you’re going to be competitive in this changing industry, try going in the opposite direction of where much of the industry is going.”.

‘ve interviewd some of the top thinkers in the industry for this column. I’ve deliberately overlooked three of the most credible sources that I could have found, and whose names are familiar to a lot of people in the industry. They are my partners at Davis Mergers & Acquisitions Group: Steve Rubin, Katie Bally and Dorsie Mosher. In addition to more than 100 years (collectively) in the industry, they are on the front line of handling the sale of alarm companies to prospective buyers. That means they sit front row, center, in seeing trends as well as opportunities within the industry. Well, I am overlooking them no longer, and have started interviewing each to glean their insights into “great ideas” for the security industry.

First up is Dorsie Mosher, who carries experience as a speaker, trainer and former CEO of several security industry organizations. I caught him just as he was leaving to give a talk at the chapter meeting of the California Alarm Association. I asked him, “If you had just one really great idea about what dealers should consider doing as the industry continues to change, what would it be?” His answer, simply, “If you’re going to be competitive in this changing industry, try going in the opposite direction of where much of the industry is going.”

ARE YOU WILLING TO SHED A ‘ME-TOO’ ATTITUDE?

Mosher elaborates on this approach, for which I’ll paraphrase: The rest of the industry is going to be looking at PERS (Personal Emergency Response) systems, do-it-yourself, home automation, renewable energy sources, home entertainment, etc. In other words, the dealers who go this route will be competing with major players who have already started — some years ago — the process of building business in these areas. It seems as though the one thing that many dealers are not looking at the commercial side of the security business. If Tyco could go through a separation with ADT, and both of them come out in pretty good shape, it seems to me that an alarm dealer can do the same thing, albeit on a small scale. Think of it no so much as a changeover, but rather a migration.

Just think of how things have changed in the world of retail. Today, the world’s larget retailer, Amazon, does not have a single brick-and-mortar location anywhere. The whole retailing industry has gone through not just a paradigm shift, but rater a monumental transformation, brought about by the Internet. Perhaps try to visualize how you can turn the virtually unlimited power of the Wed into a tool that works for you.

For example, business and industry spends a lot of time (and money) on video surveillance systems. Has anyone in our industry really explored how those video system could also be used by management to help effectively train, motivate and manage employees? Has anyone really thought about the false alarm situation as it applies to our industry on a city by city, community by community, basis? Is it possible that at the same time Amazon is testing the use of drones to deliver packages, somebody in our industry should be testing the use of drones to verify alarms?

START VETTING YOUR VENDORS MORE CAREFULLY

You can put mentality into play right awy.. If you attend this year’s ASIS show in Anaheim, CA, are you prepared to ask some pointed questions of vendors, such as:

• Is there a dual utility for your product that could increase the value to a potential buyer?
• Can I be sure that your R&D will stay ahead of the changes that are bound to happen in this segment of the industry?
• If I standardize on your product, what training, management tools and support will be availalble to me and my staff?

Talk to people you know and trust in the industry. These should included knowledgeable suppliers and service providers. Ask any of them this single question: What can you do that will help assure me that I can grow my business and still be here, profitable, five years from now? The answers you receive should help you determine a direction you could take. And once you decide on that direction, become the most knowledgeable person that you can be on anything having to do with product, sales, installation, service, etc.

Oh, and by the way, have you really taken a long, hard look at the fire side of the industry? The category has great growth potential and, as a business broker, we know that there are several buyers out there that will pay muliples as high as 40x for fire accounts that are monitored and have service embedded into the contract. That’s right, if you have a fire monitoring contract and include Test and Inspect as well as service in the contract itself, some of these buyers will pay the full multiple on the entire amount. That’s huge! And regardless of whether you will eventually want to sell, it becomes an important asset in your estate.

Ron Davis is Security Sales & Integration‘s “What’s the Big Idea?” columnist and contributing market analyst. He is president of Davis Group, a full-service consulting firm serving the security industry, which also includes GraybeardsRus. He has 35 years of industry experience, including founding Security Associates International in the 1980s.