EOS® for Security Systems & Home Automation Companies

The security industry keeps score differently than the rest of home services, and every owner in it knows the number: RMR. Monitoring and managed-services accounts trade at 30–45x monthly recurring revenue — residential multi-year contracts at 35–50x — which means a single $50/month account you add today is worth roughly $2,000 of enterprise value the day it's created. No other home-service trade converts this week's work into balance-sheet value that directly.

Attrition is the other half of the scoreboard. Annual RMR attrition below 8% — ideally below 5% — supports premium multiples; drift past 12% and the value of every account you own gets marked down. Residential books typically churn 10–14% a year while commercial runs 4–8%, which is why account mix, contract terms, and service quality aren't operational details — they're the valuation. Yet most $2–20M dealers and integrators run day to day as installation companies: chasing project backlog, celebrating install revenue, and reading the attrition number once a year when the bank or a buyer asks.

The Entrepreneurial Operating System® gives a security company a way to run the whole business by the numbers that actually compound. Jon Kludt is a Certified EOS Implementer® who has facilitated 300+ sessions with founder-led leadership teams across a wide range of industries. Applied to a security dealer, EOS® builds an Accountability Chart where RMR growth and RMR defense each have an owner, a weekly Scorecard where net RMR added is the headline number, and quarterly Rocks that move mix, attrition, and creation cost — the three levers a future buyer will price.

An example Security & Home Automation Accountability Chart

A security dealer's chart should make the RMR engine explicit: one seat feeds it (sales), one defends it (service/monitoring), and installation serves both. Here's a typical chart for a $2–20M dealer or integrator.

Seats, not people — one person can hold more than one seat in a growing company. The chart defines the structure the business needs, then you put the right people in the right seats.

A weekly Security & Home Automation Scorecard that actually predicts

The security Scorecard has one headline number — net RMR added this week — surrounded by the numbers that drive and defend it.

From Jon's desk

You don't run an installation company. You run an RMR factory with an installation department.

Here's a question that sorts security-company owners instantly: what was your net RMR growth last week? The ones building real value answer immediately — it's the number they wake up to. The rest change the subject to their install backlog, which is a little like a farmer bragging about how much seed he bought. Installs are how you acquire accounts. RMR is the crop.

The market is ruthlessly clear about what your company is worth: 30–45x monthly recurring revenue for solid accounts, 35–50x for residential multi-year contracts — priced by attrition. Sub-5% annual attrition and buyers stretch to 40–50x; drift into the teens and the same accounts fetch 25–32x; go past 18% and institutional money walks entirely. Nothing else you do — truck wraps, install margin, brand — moves valuation like those two numbers: net RMR added and attrition.

So here's the uncomfortable audit: does anyone in your company own those numbers weekly? In most dealers, RMR gets reported monthly at best, attrition annually, and the leadership team's actual attention goes wherever the install schedule is on fire. The economic engine runs unattended while everyone works very hard on the acquisition department.

EOS® reorganizes the company around the engine. The Accountability Chart creates an explicit RMR-defense seat — service, monitoring, saves, sunset migrations — separate from installation, so the profitable annuity customers stop losing scheduling battles to project deadlines. The Scorecard makes net RMR added the headline weekly number, flanked by attach rate, service SLAs, cancellations with reasons, and sunset migrations. Rocks aim each quarter at a valuation lever: an attrition machine, a commercial-mix push, a legacy-base upgrade campaign. And the Level 10 Meeting™ finally gives 'installs versus service' a forum where it gets solved instead of re-fought.

A pattern worth naming: the trades' scheduled churn waves — 3G sunsets, POTS retirement, panel end-of-life — are the clearest test of whether a company runs on a system or on adrenaline. Adrenaline companies discover the wave when cancellations spike. System companies put the migration list on the Scorecard two years early and convert the same wave into upgrade revenue and refreshed contracts. Same event, opposite outcomes, and the only difference is operating discipline.

Whether you ever sell or not, the discipline pays the same: every $100 of net new RMR you add — and keep — is thousands of dollars of enterprise value manufactured in a week. Run the company like the factory it is. If you want help wiring it that way, that's exactly what I do.