Alarm & security · Contract Self-Audit

Find your real number.

What do bad or missing contracts cost you? Here's how to find out, this week. Pull a random sample of your accounts, look for the contracts, and measure what you've only ever assumed. About an hour.

A self-check, not an appraisal. Nothing you type leaves your device.

Measure your sample

This is the number that matters most. Start small with a random sample, then expand.

Start with a random sample of 20 active accounts. Not the files you can find easily, and not your best accounts. You can expand it later.
Keep it random. List every active account in an order that has nothing to do with quality, such as account number, then pick at even intervals. For example, with 1,000 accounts, take every 50th one.
Look for each contract. Find the complete, signed, current agreement. Allow about 3 minutes per account: about an hour for 20. It's tight but doable.
Mark it deficient if you can't find it, it isn't signed, pages or initials are missing, clauses are altered or crossed out, or it's an old, non-standard form.

Sample size

accounts

Total active accounts

Deficient in your sample: 2 of 20

Average RMR per account (optional, for the dollars)

$/ month

RMR is recurring monthly revenue: monitoring, service and inspection billing.

Score your contract quality

One point for each "yes." Be honest. Nobody sees this but you.

Your score

5 / 10

At risk

8 to 10 · Asset. Your contracts are working for you. Protect that.
5 to 7 · At risk. Real gaps. A buyer will likely discount, and you're more exposed than you think.
Under 5 · Liability. Your paper may be costing you value and protection right now.

The first three items are the contract itself. A "no" on any of them is a priority whatever your total score.

Your real number

10%

of your accounts may not be cleanly under contract

2% or less: strong · 2–5%: needs attention · over 5%: a priority. No real portfolio is at zero: a government agency's own agreement, on file, counts as a contract.

Accounts at risk across all your accounts100

RMR not cleanly under contract$4,500/mo

Value riding on it

$162,000

What that RMR is worth at 36× RMR, the published average multiple for smaller dealers. A buyer commonly excludes accounts without a producible contract from the price.

The one rule that fixes it

Nothing goes online without a signed, complete contract.You can't clean up a mess you're still making. Get the contract before you turn the system on. That's the only leverage you'll ever have.

Put a dollar figure on your whole contract portfolio

Alarm Company Valuation Estimator

This audit measures your paper. The estimator prices it: what a buyer would likely pay for the RMR your contracts can prove, and what the gaps cost you against that number. A few short questions.

Run the estimator

Talk Like a Buyer

The words that show up when you sell an alarm company, in plain English, with what each one means for your check.

Read the glossary

An educational self-check, not legal, tax or financial advice, and not a valuation or an offer. A sample gives an estimate; a larger, truly random sample gives a truer number. Beyond the at-risk accounts, old or non-standard forms can take roughly 1× to 5× RMR off what a whole contract portfolio is worth at sale, per an alarm-industry attorney's published valuation. Multiples vary by buyer, attrition, account quality and deal structure. Before any real decision, get a professional valuation and qualified counsel.

Built by Naomi Withers, Growth Consultant Services, from ten years inside the machine: running finance and acquisitions at a top SDM 100-ranked alarm company. More free tools at growthconsultantservices.com/security.