Updating contracts, checking insurance levels and licenses, examining your supplier deals, paying down debt and thinking about an exit strategy should be on the radar of any CE pro in the recurring monthly revenue (RMR) game.
For every custom integrator delving into recurring monthly revenue (RMR), here is a quick checklist of 9 “2015 New Year’s Resolutions” from legal expert Ken Kirschenbaum of Kirschenbaum & Kirschenbaum and columnist for CE Pro‘s sister publication Security Sales & Integration.
1. Update Contracts—Among the new clauses terms that dealers should now include are ones related to issues involving encryption. He says you should never be using a service agreement that is more than one year old.
2. Manage Cash Flow Better—Kirschenbaum says that RMR growth will depend not only on aggressive sales efforts but diversification of your services. So he recommends dealers focus not just on intrusion and fire monitoring but CCTV video surveillance and video streaming. “Manage your cash flow better and try and retain your RMR accounts. Charge for installation and keep ahead of the monitoring charges by charging quarterly, semi annually or annually in advance. If you’ve been selling off your RMR contracts cut back as best you can,” he says.
3. Check Insurance Coverage—“Not all insurance companies are the same and not all premiums are equal. You need to have confidence in how your carrier handles your claims. The last thing you need is aggravation from your carrier’s claim’s department when you have a claim,” he says. That means making sure your Errors & Omissions coverage is sufficient, along with life, health and disability insurance.
4. Incorporate Your Business—“If you are still conducting business in your own or an assumed name you need to incorporate; do it now,” he says. “You don’t want to continue to invite personal liability for your business activities. I recommend a business corporation, sub chapter S election, and despite some accounting advice to the contrary, elect to be on a cash basis.”
5. Update Licenses —This is a no brainer. If your state has licensing, make sure you are up to date. Also, be sure to check the licensing agreements for every jurisdiction in which you conduct business.
Article Published By Jason Knott on CE Pro, December 30, 2014
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