What are your contracts really worth?
A quick estimate of what a buyer would pay for your recurring revenue, and what your paperwork is costing you. Answer a few questions, then run the 10-point audit to see where to start.
Your recurring monthly revenue (RMR)
Everything you bill each month for monitoring, service and inspection. Leave out one-time installs.
What you pay out again to Alarm.com, SecureCom, AlarmNet and others: communicator, cellular, radio. You bill it, but it isn't yours, and buyers don't pay a multiple on it. Rough guide: about $8 of a residential account, about $20 of a commercial fire account.
Wondering how to pull this from your bills? Ask Naomi about a pass-through review.
What's behind the paper
"I think we had it" counts as no. A buyer won't pay for these accounts at all. A government agency's own signed agreement, on file, counts as a contract, though some buyers still exclude government accounts.
Forms roughly 10+ years old, inherited boilerplate, or anything that isn't an industry-standard form.
An account that doesn't pay isn't recurring revenue to a buyer. It will come up in diligence.
What moves the multiple
Where most of your RMR comes from
Annual revenue attrition (cancellations)
Most alarm companies run 8% to 12%, many at 9% to 11%. From 10% up, buyers hold back more of the price; above the 12% industry line, they also pay a lower multiple.
The 10-point contract self-audit
The quick version is above. For the full method, a random sample of your own contracts that gives you a measured deficiency rate, run Find Your Real Number. About an hour.
This gap is exactly what Loyva closes
Every contract signed, vaulted and retrievable in seconds — so the number above goes to zero and stays there. Leave your details and our team will call you to walk through it.
Prefer to pick the time yourself? Book a 30-minute demo.
+ What this is, and what it isn't
An educational teaching tool, not a valuation, appraisal, or offer.
- It prices one thing: your recurring monthly revenue (RMR) times a multiple. Pass-through fees, accounts with no contract you can produce, and accounts more than 90 days past due come out first, because buyers commonly exclude them.
- The multiple starts from company size (about 36× for dealers under $50,000 RMR, about 46× over $500,000, per recent industry data), then moves for account mix (a mostly commercial and fire book can sit about 12× above a mostly residential one) and attrition. Above 52× is rare. RMR multiples are monthly: 36× RMR is about 3× annual revenue.
- Old or non-standard forms: an alarm-industry attorney's published valuation deducted 1× RMR when about 90% of accounts were on old forms, and considered up to 5×. The tool scales that to your share.
- A real sale includes much more: pass-through charges, central-station line ownership, equipment, goodwill, and deal structure such as earnouts and seller notes. Holdbacks run 10% to 20%, driven by attrition.
- Your audit score doesn't change the dollars. It shows you where your contracts are weakest. The first three items, the contract itself, come first.
- Get a professional valuation and qualified advisors before any decision. Loyva's series is educational and is not legal or financial advice.