How Much Is My Remote Monitoring Business Worth?

The simplest answer is: as much as someone is willing to pay for it. To be more precise, the value of a company is the result of a complex equation with many variables. These variables represent the different risk factors that the buyer also factors into the price when making an offer to acquire a business. Managing those risks also costs the buyer money—and it’s only at the time of the offer that the real cost becomes clear.

At the start of a business, many entrepreneurs don’t even consider what requirements they'll need to meet—or whom they’ll need to satisfy—if they ever decide to sell the company. The explanation for this is quite simple: in the beginning, we don’t even want to think about it. Building our company is, after all, partly about making a profit, and partly about self-realization—though we never admit the latter. 😊

Today, any potential buyer looking to acquire a remote monitoring company first defines what their ideal candidate looks like. In other words, who’s worth buying—and who’s not.

From the buyer’s perspective, profiling the candidate company includes the following questions:

1. WHERE ARE THE REMOTE MONITORING PROVIDER’S CLIENTS LOCATED?
This is usually crucial in defining the response service’s operational area. For the buyer, it matters a great deal how much of the response team’s current capacity is utilized. Is it running at a loss or profit? Can its capacity be further expanded with new clients?

2. WHAT TYPES OF CLIENTS DOES THE REMOTE MONITORING PROVIDER HAVE?
Nowadays, a remote monitoring company’s portfolio often includes a mix of institutions and private individuals, along with a variety of monitoring services. The key question is whether these subscribers are served by a homogeneous or a heterogeneous infrastructure. A homogeneous infrastructure allows for simpler and more transparent operations, and therefore carries minimal operational risk. In the case of heterogeneous infrastructure, multiple technological solutions operate in parallel, requiring different skill sets and tasks from operators.

That may not be a problem today, as long as there’s a technician who fully understands and supports the system. But the question is: for how long? Everyone retires or changes jobs eventually. And even if you find a replacement, they may not be nearly as skilled as their predecessor—assuming you can find a qualified technician at all, which is a serious concern nowadays.

So we can’t assume that everything will continue working as it does today. This is precisely why systems with heterogeneous operations carry significantly greater risk. To implement a homogeneous infrastructure, the buyer’s first move will be to consolidate the various technologies. But technology transfer usually requires device replacement, making it a very expensive investment. The buyer will factor this cost into the price and reduce the value of the business accordingly.

3. WHAT KIND OF TECHNOLOGY DOES THE REMOTE MONITORING PROVIDER USE?
We’ve already touched on operational technical risks, but we haven’t yet discussed the business opportunities inherent in different technologies. It’s crucial to choose a system that generates revenue—not one that drains it.

In the past, due to prevailing norms, we used to own every item we used, and we paid for them accordingly. Today, almost everything is available as a service—whether it’s hardware, software, or even complete systems.

This approach has two major benefits: it lowers the startup costs for a business, allowing the owner to launch without heavy investment; and it minimizes business risk, because if the venture doesn’t succeed, you haven’t thrown away millions. There’s another upside: if you choose a technology that’s also widely used by other service providers, you open the door to various business opportunities.

Take, for example, the cost-cutting or revenue-generating potential of outsourced remote monitoring services.

Providers using the same technology can offer remote monitoring to one another without needing to change their existing systems. New clients can be integrated alongside existing ones as a separate group within the monitoring software. The client company still gets full access to its own customers, just as before—their client software will only display their own clients, not anyone else’s.

From this point on, dispatcher activity can be outsourced—saving costs for one party and generating revenue for the other.

Or consider the discounts available when subscribing to SIM cards from the same technology provider.

It’s well known that GSM communication costs decrease as subscription volumes increase. This presents another business opportunity during a company sale or acquisition.

If a remote monitoring provider wants to expand and sees acquisition as the most efficient route, the best investment would be a company that uses the same technology as they do. That business will be far more valuable to them: there’s no need for unnecessary investments, no tech transfers or consolidations. Client attrition risks are minimal, as customers won’t even notice the change in ownership. And from day one post-acquisition, the new subscribers begin generating revenue.

What’s more, with the added subscriptions, the total SIM base increases significantly, so the technology provider will offer far greater volume discounts. This reduces the cost per client endpoint, shortening the return on investment period.

4. WHAT GROWTH POTENTIAL DOES THE REMOTE MONITORING PROVIDER HAVE?
Most remote monitoring providers today offer a broad range of services. Some specialize only in property and fire protection systems, while others see major business potential in adjacent areas—like monitoring video surveillance systems, elevators, vehicles, or elderly care systems. The latter is gaining increasing importance as it enables cross-selling, which leads to revenue and profit growth.

In cross-selling, a provider offers an additional, related service to a subscriber alongside their existing one. This increases revenue and strengthens trust, because the provider becomes connected to the client through multiple service lines. The more services a customer receives from the same provider, the less likely they are to switch providers.

In return for the increased revenue, the provider will naturally pay more attention to clients with multiple subscriptions. This is what the business world calls a “win-win” situation—an arrangement that equally benefits both parties. Such cooperation ensures long-term financial stability for the provider and thus supports the sustainability of the business.

5. WHAT OTHER VALUE-ADDING ASSETS DOES THE REMOTE MONITORING PROVIDER HAVE?
In addition to technology, staff have become a critical asset, as qualified and reliable professionals are increasingly scarce. A well-trained dispatcher, installer, or even a salesperson can significantly increase company value during an acquisition or merger—especially if they’ve been performing their work with dedication for years and are loyal to the company.

This is why it’s essential for a service provider to regularly evaluate staff performance and invest in training programs to enhance their skills. That way, the business can ensure stable and predictable operations over the long term.

Note
In addition to the above, a remote monitoring company’s financial indicators, outstanding receivables and liabilities, assets, funding sources, and various legal documents are also crucial aspects of the due diligence process during an acquisition. But it’s important for any potential seller to understand: due diligence will only take place if the company meets all the buyer’s expectations in the above areas.

If you were looking to buy a company, who in your environment would be your ideal candidate—and why?