Progress on the Horizon
â€œIn the early stages you focused on keeping the crews busy, going from day to day, and approaching anyone that will give you a chance to prove yourself as a small startup,â€ remembers Atronic Alarmsâ€™ founder and president, Perry Atha.
Twenty-two years later: Athaâ€™s business venture has blossomed into a strong small business, taking in more than $2.7 million in annual revenue in 2004, up 13 percent from last year. Not only has Atha learned to be more selective in the kind of business he takes on, but he also has applied practical strategies to the development of his company, helping to put Atronic Alarms in position for superior growth in the coming years. It is Athaâ€™s intelligent approach to moving forward â€“ and the parallels that his company has with many of the industryâ€™s growing dealers â€“ which led SDM to choose Atronic Alarms as its 2004 Dealer of the Year.
Atronic Alarmsâ€™ primary markets are custom-designed homes in the mid- to high-income bracket â€“ both new construction and retrofit â€“ and medium-sized businesses.
â€œThis year is booming so far. CCTV, access control, and home automation have been big. We are doing a lot in the commercial area, with several large projects over $100,000. That is quite a bit with a company of 28,â€ says Megan Ragan, marketing coordinator. â€œAtronic Alarms is starting to feel the pressure again as the market picks up and begins to speed forward. With commercial installs going stronger than ever, the entire staff â€“ from salespeople to installers to the service department â€“ is stepping up,â€ she comments.
She describes it as a good problem to have, but says the companyâ€™s challenge is â€œto grow in a conservative manner, and yet still keep up with market demand.â€
Why is management set on growing conservatively when market prospects seem boundless?
â€œWeâ€™re just trying to control the growth and not grow too fast, because Iâ€™m afraid that weâ€™re going to be sacrificing the quality and thatâ€™s something Iâ€™m not willing to risk,â€ Atha says.
When Atha started Atronic Alarms, one of the ways he felt he could make it stand out was by providing a sincere service that made people feel comfortable, a quality he observed as being in short supply in his market.
â€œThe foundation for us was to provide the highest level of customer service with quality installation and equipment in the Kansas City area,â€ Atha explains. In addition, as a fourth-generation resident, he had strong ties to the community. â€œMy family has been here a number of years and is well-established in the community. I wanted to make sure I never did anything to risk that reputation. As a result, we go the extra step to make sure thatâ€™s done properly.â€
Four key strategies that have served Atronic Alarms well are in the areas of hiring, maximizing employee talent, developing mutually beneficial relationships, and taking care of customers.
Spend Time to Hire RightTo keep up with demand, Atronic Alarms recently purchased two vans and hired three installer trainees, bringing the companyâ€™s total to 12 vans and a group of 15 installers and service technicians. Managementâ€™s approach is to hire inexperienced people and train them for 12 to 24 months, depending on their skills and abilities, before putting them â€œon their own trucks.â€
â€œWe have found in the industry, because of the tough ethic we have on quality, itâ€™s better to hire and train them the way we want it done,â€ Atha notes. â€œThis is allowing our current experienced staff installers an extra pair of hands, which at the end of the day increases productivity.â€
â€œThe interview process is very important,â€ Ragan says. â€œPerry and Nell are very good at people-picking. They can tell the match that they want. It starts there.â€ Ragan stresses that the entire management team â€“ which includes Atha; vice president John Erickson; installation and general manager Nell Mathews; service manager Craig Albright; and accounting manager Barb Suggs â€“ is also very family-oriented.
â€œYou canâ€™t be so rigid that you force people out the door,â€ Atha says. â€œYou have to have a balance. Our flexibility has helped create longevity, which has kept the turnover to a minimum.â€
Mathews says, â€œOf course, you have to have rules, but respect and understanding are key. Itâ€™s doing the little things that has helped us achieve the larger goal. This actually parallels the way we design security systems â€“ individualized to meet each personâ€™s needs. If weâ€™re helping our employees as a company, in the long run theyâ€™ll take us to different levels.â€ Some of the reasons people would want to be employed by Atronic Alarms are for the educational programs (training, seminars); a benefits package that includes paid vacation, personal days, and holidays; life, health, dental, vision, and short- and long-term disability insurance; a 401k plan; bonuses; picnics and parties; employee discounts for systems installed in their homes; and rewards that help increase productivity.
People like to work for Atronic Alarms mostly because of the way it allows them to balance their personal/family time and business time, Mathews says.
â€œAs the owner, I am very fortunate to have Nell and an outstanding support staff, which allows me the flexibility to find balance in my own life between family and Atronic Alarms,â€ Atha says. â€œAs I look to the future, I hope to see my four children, with two actively involved in the wings now, continuing this philosophy.â€
Use Talent WellAlso key to keeping quality employees is maximizing their talents. For example, Ragan was hired three years ago primarily to help Atha and Erickson with proposals and contracts. â€œHer marketing skills showed us that she has a lot more to offer. And her computer support has brought a whole new dimension to the company,â€ Atha says.
As another example, Steve Keenan started as an installer but was subsequently brought in-house to pull equipment. â€œHe is detail-oriented. He organizes the warehouse and has everything alphabetized and set up,â€ Atha notes.
â€œWhen personal attributes are considered, it leads to all employees having a sense of accomplishment. It makes for a successful team,â€ Mathews says.
Develop RelationshipsThe Atronic Alarmsâ€™ team is venturing into a relatively newer realm these days, as it takes on more work in the commercial market.
â€œThe commercial side of things is exploding for us right now. In our arena, some rather large installations are coming up. Thatâ€™s what weâ€™re trying to gear up for â€“ keeping our builder and new construction business growing at a steady rate. We donâ€™t want to get the cart in front of the horse,â€ Atha says.
Heâ€™s quick to say that the emphasis always has been and continues to be high-end residential installations. In fact, Atronic Alarms sells and installs between 400 and 500 residential systems a year. In 2004, the number of new installations decreased slightly, which reflects the fact that the company is performing larger installations and fewer of them.
â€œThe trend seems to be instead of doing $1,500 to $2,000 systems, weâ€™re doing $5,000 to $10,000 systems and doing those that take more time,â€ Atha explains. For example, a current residential project includes more than 20 perimeter doors with lock sensors, alarm screens and contacts on all windows, glass-breakage detection, carbon monoxide detection, cameras, and more â€“ all integrating into a home automation controller.
While the larger installations have the potential to command a better profit, the smaller jobs add to Atronic Alarmsâ€™ monitoring revenue more quickly. Recurring monthly revenue at year-end stood at $79,000, a 9 percent increase over 2003.
â€œItâ€™s important to continue to grow your monitoring revenue, but you canâ€™t lose money on the installation and continue to reward the employees,â€ Atha explains. â€œWeâ€™re trying to find a balance with the larger installations that help carry some of the profits to offset the smaller jobs that are not as profitable.â€ The company does a cost-analysis on every installation, and wonâ€™t accept work that doesnâ€™t result in the appropriate margins.
Between 35 and 45 percent of new installations are directly related to custom builders, a market that Erickson recognizes as very lucrative.
â€œHiring John Erickson was one of the major turning points in our business,â€ Atha says proudly. â€œJohn brought a new level of energy and marketing approach that helped propel us into new areas. John pursued the builder market very heavily.â€
â€œWeâ€™ve always specialized in security and fire, but with the continual development of products and services, diversification has become necessary to maintain our clientsâ€™ demands â€“ home automation, integration, residential camera systems, lighting controls, structured wiring, to name a few,â€ notes Erickson, who holds a minority stake in Atronic Alarms. Nothing is sold as a package, Erickson stresses.
â€œIn the early years we were trying to do all things for all people. We tried central vacuum, music intercoms, and sound systems. We discontinued doing those. We were not proficient,â€ Atha notes. â€œWe decided to stop and we found weâ€™re much better off if we pair up and work in unison with other companies for doing high-end A/V, for example.â€
Partnering with other specialty companies is a strategy that Atronic Alarms applies to the commercial market, as well.
Sales efforts on the commercial side are largely being driven by the post-9/11 security environment, as well as new construction, Atha says. â€œWeâ€™re doing biometric readers, smart cards, a lot of camera work,â€ he comments.
But in the networked security realm, the company relies on its partnership with a local firm that is more skilled in the computer field. â€œWe do our own programming, but we are not certified to do the network installations. We have found that we are better off outsourcing this area of expertise to others,â€ Atha says.
For example, a recent residential installation involved a camera system that the customer wanted to have tied into a digital video recorder to be viewed over the Internet. â€œIn residential, itâ€™s difficult to get a static IP address and very expensive,â€ says service manager Craig Albright. â€œIn order to accomplish that for the customer, the actual router of the customerâ€™s home network had to be modified and viewed and adjusted and updated. We used the computer expertise of the other company to determine what parts and software were needed.â€
Albright recently achieved NICET Level 1 certification and is working on Level 2. This development is vital to a small businessâ€™s growth in commercial fire alarm sales. Atronic Alarms holds a certificate to install UL-listed remote station commercial fire alarm systems.
While Atha and Erickson handle the bulk of new system sales, management recently brought on Rick Zink, senior security consultant, commercial division, to progress the commercial sales. â€œThe commercial side of our business is where I see more growth to come from in 2005,â€ Atha says.
Take Care of What You HaveOnce a customer becomes a customer, Atronic Alarms applies strict guidelines, as well as old-fashioned hard work, to make sure they are satisfied.
A Quality Assurance department, staffed by Shaunn Jastrzembski, quality control specialist and Jay Dupuy, quality control and warranty service, is responsible for inspecting every job.
â€œPictures are taken of installed panels. Each installer is instructed to send an alarm signal on all points at the end of an installation. We get a hard copy of that. Shaunn and Jay then take that list out and check it against the zone list. If one is found not to be tested, then they test it at that time,â€ Atha says.
The Quality Assurance staff also is responsible for training and completing the emergency notification form. Activity from new accounts is monitored for several weeks; then Quality Assurance calls the customer to ask if there are any questions.
â€œThen we send a postcard asking them to rate our services from the salesperson to the installer,â€ Atha says. The post card is also available on Atronic Alarmsâ€™ web site, www.atronicalarms.com.
If a customer rates something at average or less, management calls to learn why. â€œThat means there was a quality standard we set for ourselves that we obviously didnâ€™t meet,â€ Atha comments. â€œJust â€˜OKâ€™ doesnâ€™t cut it.â€
Looking AheadAtronic Alarmsâ€™ conference room is adorned with â€œbragging walls,â€ framed articles, letters, and certificates that mark the companyâ€™s achievements and recognitions. For clients who come into their offices, the bragging wall helps establish confidence in Atronic Alarmsâ€™ services. For employees, it provides a high standard to live up to. â€œWhen I first came and saw the wall, I was a bit intimidated,â€ Ragan confesses.
With about 3,000 monitored accounts, Atronic Alarms doesnâ€™t even operate its own central station, but that is just fine for now. â€œThe central station that weâ€™re currently utilizing [Alarm Central, LLC, Kansas City, Mo.] has provided an excellent service. We have all our own phone lines and data lines. Weâ€™re one of the largest dealers in that group and they take great care of us,â€ Atha says.
Taking great care of customers is one thing Atronic Alarms knows best. And as a foundation, it will serve this dealer well into the future.
Atronic Alarms Inc. at a Glance
SDMâ€™s 2004 Dealer of the Year Atronic Alarms was founded in 1982 by Perry Atha, a long-time resident of the Kansas City area. Atha, a graduate of Southern Methodist Univ. of Dallas, was seeking business opportunities when he learned about the recurring revenue stream offered by alarm systems. Atha, who says he was always interested in technology, started Atronic Alarms with an initial investment of $5,000. The first thing he did was call a half-dozen companies to get quotes for an alarm system for his home and â€œto see what the competition was going to be like. That convinced me there was a niche in the market,â€ Atha says.
Senior management: Perry Atha, president;
John D. Erickson, vice president; Nell Mathews, installation and general manager; Barb Suggs, accounting manager; Craig Albright, service manager.
Total employees: 28
Mission statement: Atronic Alarms will provide our clients the best technology with the highest quality service and installation, which enhances reliability and safety.
2004 revenue: $2.7 million (estimated); recurring monthly revenue $79,000 (estimated)
Subscribers: 2,007 residential; 658 non-residential