Starting a new small business is a risky venture. So risky, in fact, that more than 40% of all small businesses fail within the first three years. Understanding why so many businesses fail also sheds light on why a reputable home security dealer program offers a solid business opportunity that is likely to succeed over the long term.
Statistics show that the single largest cause of small business failure is incompetence. Some 46% of failing small businesses suffer from a myriad of problems including a lack of planning, poor or no record-keeping, a lack of pricing knowledge, failure to pay taxes, emotional decision-making, and living beyond the means the business provides. In short, it comes down to entrepreneurs starting their businesses with insufficient knowledge and experience, and then failing to utilize the knowledge and experience of others to correct what they are doing incorrectly.
As a new business opportunity, the home security dealer program addresses almost every concern in the above list. National and regional security providers offering dealer programs have a vested interest in making sure every one of their dealers succeeds. Therefore, they provide a tremendous amount of help and support to that end.
Dealers Have Business Partners
A local security company that makes the decision to obtain membership in a home security dealer program is essentially gaining a business partner through the arrangement. The business partner brings a lot to the table including an already recognized brand along with the size and resources to help the local dealer succeed. Through this partnership, dealers receive:
- relevant and necessary industry training
- help and support with back office functions
- marketing support and branding opportunities
- rewards and incentives to motivate growth
- opportunities to manage cash flow by selling accounts.
What makes a home security dealer program such a strong business opportunity is the strength of the affiliated brand. Affiliating with a security provider known around the nation as a leader in the industry instantly gives the local dealer credibility. More importantly, the provider works very hard to protect its brand. They will not be content to sit idly by while local dealers struggle – because that is bad for the brand.
Cash Flow Management a Strong Point
When home security dealer programs were first birthed in the 1990s, there were a ton of new security companies getting into the market with a single focus: sell as much equipment as possible. The industry was very much about sales with very little attention paid to long-term customer relationships. And what was the result? Almost all of those sales-focused companies have long since gone under.
Authorized dealer programs came into play as a means of helping local home security dealers better manage the cash flow so they could stay in business even amidst the ups and downs of fluctuating equipment sales. Make no mistake; positive cash flow is still one of the strongest aspects of dealer programs as a business model. By having the opportunity to sell accounts to the branded provider, security dealers are much better equipped to manage cash flow to keep their businesses strong.
There is little doubt that the home security dealer program has proven itself as an effective business model throughout the more than 20 years of its existence. All across the country, there are thousands of local dealers whose businesses enjoy solid growth and profitability thanks, in part, to their affiliations with branded providers. It is a business model that has worked for decades; it is one that will continue working as home security expands into home automation and beyond.