A security and alarm company is a subscription business that happens to install equipment. The install wins the customer, but the monitoring contract, the recurring monthly revenue (RMR), is what pays back the install, funds growth and decides what the company is worth if you ever sell it. Running one well means selling accounts that last, servicing them so they stay, and knowing your RMR and attrition every month.
How a security and alarm business makes money
Monitoring and interactive services. Monthly fees for central station monitoring and app-based services such as remote arming, video and notifications. This is the RMR. A Peak Alarm executive described RMR to SDM as the reason "you can't just pick up a normal ERP and run an alarm business" (SDM).
Installation. Panels, sensors, cameras, access control and smart home devices. Some dealers price installs for profit; many subsidize equipment to win the monitoring contract.
Service. False-alarm troubleshooting, battery and sensor replacement, communicator upgrades and system expansions. A service plan turns this from unpaid truck rolls into more RMR.
Commercial work. Video, access control and intrusion for small businesses, often with higher install revenue and service agreements.
Account acquisition. Some dealers buy accounts or take over systems from other providers. The price depends on RMR, attrition and contract quality.
Running the day
The day mixes three kinds of work: site surveys and sales appointments, installs that can run a full day or more, and service calls. Installs need the right equipment staged and enough time to program and test every zone with the central station. Service calls need to be answered quickly, because an alarm that will not arm, or a false alarm at 2 a.m., is how customers decide to switch.
After every install, confirm that the central station account is live and the recurring billing has started on the right date. Gaps between activation and billing are one of the most common sources of lost revenue.
Pricing your work
- Know your loaded hourly rate for installers and service techs: wages and burden, truck, overhead and profit, divided by billable hours. Use the labor rate calculator.
- Cost every install. Equipment at your cost, labor hours, and sales commission. That is your account creation cost.
- Decide the subsidy deliberately. Creation multiple = (creation cost minus up-front payment) divided by monthly RMR. If it takes more months than the average account lasts, you are losing money on each sale.
- Price monitoring from cost up. Wholesale central station fee, interactive service fee, expected service cost per account per month, and margin.
- Sell service plans. A monthly fee that covers batteries, sensors and trip charges adds RMR and reduces service-call disputes.
- Check equipment margins with the markup and margin calculator.
The membership revenue calculator is useful for projecting how service plans and monitoring add up. The security and alarm estimate template shows an install with monitoring laid out clearly. In TradesWork, monitoring or service plans can bill monthly as memberships, though RMR and attrition reporting still need alarm-specific software.
Marketing that works for alarm companies
Referrals and existing customers. Satisfied customers refer neighbors, and adding cameras or smart devices to existing accounts raises RMR without a new account cost.
Builders and property managers. Pre-wire and new construction relationships, and multi-unit property managers, bring steady install volume.
Local search and reviews. Homeowners look for local, responsive companies. Reviews that mention fast service are valuable.
Insurance and life events. New homeowners and people who have just experienced a break-in in their neighborhood are the most motivated buyers. Be helpful, not alarming.
Commercial outreach. Small businesses need video and access control and value a local service provider.
Reducing attrition
Attrition comes from a few sources: customers who move, customers who stop paying, and customers who switch to a competitor or cancel because of poor service. Each needs a different response. For moves, ask the new homeowner to take over the account. For non-payment, keep cards on file current and follow up quickly on failed payments. For service-driven cancellations, answer service calls fast, fix false alarms at the root, and upgrade aging communicators before they fail. Contact customers well before their contract renewal date, rather than waiting for them to shop around.
Choosing software
Alarm dealers usually need two kinds of software: central station or monitoring platforms, and business software for billing, RMR, contracts and service. When choosing the business side, look for:
- Recurring billing with contract terms, price adjustments and failed-payment handling.
- RMR and attrition reporting by month and reason.
- Connection to your central station for account and signal history.
- Service scheduling and a tech app with system details per site.
- Inventory for panels, sensors and cameras.
Security-specific options include SedonaOffice, Managely and AlarmBiller from Bold Group; general platforms such as ServiceTitan are also used. TradesWork is a partial fit today: it handles calls, scheduling, installs, service, equipment history, recurring monthly billing and credit holds. It does not connect to central stations, report RMR and attrition, or track contract terms, so most dealers would still need alarm-specific billing alongside it. The software buyer's guide has a fuller checklist.
