The Stories behind the Numbers
The dealers’ answers overwhelm me with the understanding of how much effort it takes just to stay in the race. Alarm company owners and executives juggle dozens of tasks at any one time –improving sales numbers, scrutinizing profits, adjusting to market conditions, handling human resource issues, solving operational snafus. These men and women are the leaders of the industry and where they go, their product manufacturers, distributors, service providers, educators, and the rest of us follow.
This year’s SDM 100 report is extremely positive, showing that both RMR and total annual revenue grew by double digits in 2007. With the economy being what it is, however, double-digit growth does not mean that 2007 was a piece of cake. Behind the numbers, alarm dealers told their stories of how they are responding to market conditions. Many were hard hit by the depressed building market, yet alarm dealers have an amazing ability to shift gears quickly and find another product or service to take up the slack.
Sarasota, Fla.-based Dehart Alarm Systems Inc., ranked No. 89 with $176,000 in RMR, summed up the year in a nutshell, telling us, “Residential down, commercial up.”
Further north, Woburn, Mass.-based Ultraguard Protective Systems Inc., ranked No. 77, echoed the statement, telling SDM, “Residential was flat and sluggish. New access and CCTV, along with fire alarm systems, had growth.”
No. 7, Pittsburgh-based Vector Security, which operates both a dealer program and a national accounts division, described the results of both as “very successful.” Overall, the company said, “2007 was another strong year in a difficult economic environment.”
Not all of the SDM 100 firms were hurt by the lack of builder business, and some adjusted quickly to the downturn.
Crime Prevention Security Systems of Gainsville, Fla., reported, “Our integrated residential systems increased from 40 percent [of our total business] in 2006 to 48 percent in 2007. New home starts were down in our area, like in most of the country. However, we saw an increase in retrofits and commercial installations.”
While many residentially focused dealers turned to retrofit jobs or tried out the commercial market, those that were already strong in the commercial market found all kinds of opportunities:
“We just adjusted our focus on the municipalities and critical infrastructure that qualify for Homeland Security funding,” noted the firm, Sonitrol of Sacramento & Sonitrol Orange County, of Roseville, Calif., No. 39.
Security systems based on IP technology have begun to take hold among these traditional alarm dealers.
“We have entered system integration market with IP technology,” announced No. 45, Sonitrol Security Systems of Hartford Inc. & Sonitrol Security Systems of Rhode Island, stating that overall the market was average, and the burglar alarm business was “flat.”
Ranked at No. 16, Interface Security Systems & The Greater Alarm Co., Earth City, Mo., said it has “successfully positioned the company to take advantage of the substantial growth opportunities brought about by the convergence of physical and logical security. “With our new ability to offer private, secure, managed IP networks and IP security applications as a single-source provider, we expect to increase our growth dramatically.”
Interface Security is just one of many companies throughout the industry that is working hard, intelligently responding to the market, capitalizing on new opportunities, and, in the end, increasing revenue.