Security Networks’ 2013 forecast: even more growth
WEST PALM BEACH, Fla.—With revenues projected to exceed $100 million, a plan to add about 80 employees and continued expansion of its affiliate network, Security Networks is expecting 2013 to be another in a series of strong growth years, according to CEO Richard Perry.
“We’re pretty excited about our prospects,” Perry told Security Systems News. Perry, who also is president of the super-regional, which is based here, said he expects that in the new year, “we’ll keep up our growth rate that we’ve had over the last several years.”
He said the company, founded in 2000, has weathered the economic recession well, continuing to build its business despite the downturn.
In 2011, for example, it had 126,000 customers and $53 million in revenues. In 2012, it has 170,000 customers and Perry said in early December that, “we’ll be right around $79 million to $80 million this year in revenue, and we’re tracking for next year over $100 million.”
And he said Security Networks plans in 2013 to add about 40 full-time employees to the 210 already at its headquarters here. “As we add additional customers throughout the country, it creates additional need for staff here in West Palm,” Perry said. Among the employees added will be customer service reps and collections and accounting staff, he said.
Then, Perry said, Security Networks plans to add another 40 employees as technicians in the field or at its central station in Orlando, Fla.
In addition, the company, which has about 250 active affiliates across the nation and in Puerto Rico, has plans to add more. “We’ve been adding five or six new affiliates per month and we expect that to continue in the foreseeable future,” Perry said. “It’s sort of an average growth rate.”
What is Security Networks’ secret for success?
“I attribute it to the right business model at the right time,” Perry said.
He continued: “Our business model is what we call an affiliate business model. Others call them dealers. We’ve partnered with independent companies throughout the U.S. who represent us in selling and installing alarm systems.”
The company also expanded its affiliate program to Puerto Rico last year, he added.
“We establish a relationship with the customer at the point of sale and beyond that we do all the service,” Perry explained. “We do all the monitoring, billing and collections, and that business model has allowed us to grow rapidly and allowed us to expand our footprint. Today we are essentially a national company. We’re not in every major market in the United States, but we’re in the vast majority.”
He added that Security Networks doesn’t compete with its affiliates because it doesn’t have any company branches. Its only brick-and-mortar offices are its headquarters and central station. Perry said that has “allowed us to really stay focused on the core objective, which is really supporting our affiliates and helping them grow their businesses. We’ve created a very strong CRM [customer relationship management] platform designed to help them run their business and get funded quickly by us.”
The company also has a “hyper-focus” on training its employees, he said. Security Networks has created what it calls SN University and recently hired a training director “to be the quarterback for all the training companywide and consolidate it into a more formal process,” Perry said.
“Even though we’re growing rapidly and now adding customers, we’re trying to maintain that small company feel when it comes to our customers,” he said. “They get immediate service from people who are well-trained and pleasant. We want to exceed [customers’] expectations whenever we’re interacting with them.”
Security Networks, owned by Oak Hill Capital, this spring extended its credit facility by $100 million, bringing its total to $250 million. Perry told SSN: “We’re still operating within that deal and we expect we’re going to be fine with respect to our capital structure for at least another year or year and a half.”