I’ve just returned from the ESX tradeshow in Nashville, Tenn., and for those of you who don’t know about this event, it’s an RMR or Recurring Monthly Revenue event. Don’t drop out here saying “I don’t do monitoring” because you’d be missing the point of my column. The point is RMR. Sure, there is plenty of information on monitoring homes, commercial, industrial and even the government sector, but RMR is developed in many ways, and not just as a monitoring tool.
Various forms of RMR are valued differently. “Monitoring RMR” is valued at anywhere from 20 to perhaps 40 times your monthly recurring revenue, if you have iron clad, signed, long-term contracts. Integration companies are valued more so from three to five times your earnings before interest, tax, depreciation, amortisation, and non-cash equity-related charges, unless you have long term, signed service contracts. These are round numbers and not gospel, as there are other issues that are measured when a company’s value is determined, such as your business system, records, receivables, and on it goes.