Southern hospitality: the U.S. offers much more than Canada for alarm dealers
By Victor Harding
I have just returned from the annual Barnes-Buchanan alarm conference, held in Palm Beach, Fla., in February. For medium (2,000 accounts and up) and large-sized alarm companies in Canada, this is a conference to consider going to — not just because of the content but also for the networking. Many of the largest U.S. alarm companies are there, along with their monitoring stations, their bankers, their brokers and even their lawyers.
By Victor Harding
The conference is centered mainly on recurring monthly revenue — how to grow it, how to manage it, how to monitor it, what it is worth and how to sell it. Not everything said and done in the U.S. alarm industry applies to Canada but the conference is useful to me because I work with RMR all the time and comparing notes with U.S. owners, buyers and brokers is important.
In my opinion, we do not have nearly enough opportunities to learn from others in the Canadian industry. Our trade shows do not provide the same kind of educational sessions as shows like Barnes- Buchanan, ISC West, ESX, Securing New Ground, or the Annual General Meeting attached to the Central Station Alarm Association (CSAA). Why should I or any other Canadian in the alarm industry have to rely on U.S. trade shows to learn more about our industry?
But it is not just the lack of education that bothers me. What is perhaps more frustrating is the lack of financing available in Canada to small and medium- sized alarm companies. Almost universally what I hear in Canada is that banks do not lend to Canadian alarm companies in any meaningful way despite the fact that most of these companies have the same RMR that their American counterparts use to attract loans in the U.S.
There are divisions of U.S. banks set up just to cater to the alarm industry that offer everything from small lines of credit to loans in the tens of millions of dollars, all done on the value the borrower’s RMR. Why is this? My view is it is because the U.S. banking system is much more competitive. Canada basically has an oligarchy of six banks. The U.S. has thousands of banks competing and supporting various U.S. industries. One U.S. banker who has been quite successful at bringing in lots of business from the alarm industry told me that his Canadian associates think he is a “cowboy” because of his loans based on RMR. How completely ridiculous is that? I have been trying to persuade one or two of these U.S. banks to come to Canada.
So the experience of going to Barnes-Buchanan is bittersweet for me. On the one hand, it is both energizing and necessary for me to do (particularly as I am expanding down into the U.S.). On the other, I wish that Canada offered the alarm industry the same opportunities.
Victor Harding is the principal of Harding Security Services (www.hardingsecurity.ca).