Small Dealers Can Benefit From Industry Roll-ups Boom
I asked SSI Industry Hall of Famer Stanley Oppenheim, “If you were a relatively new dealer just getting started in the industry, would you feel confident about your future?”
Call or write to each of your top five manufacturers or suppliers and ask the CEO this: “What is your prognosis for the short term, midterm, and long term?”
If I had one person who I could just sit around with and brainstorm ideas, particularly about the security industry, it would have to be Stanley Oppenheim. He’s the owner of DGA Security in New York City, and he and his son own Affiliated Monitoring, also in New York. I’ve only known Oppenheim for 50 years; there are a few people still around who have known him longer.
An SSI Industry Hall of Famer, Oppenheim achieved legendary status as an entrepreneur, a builder of security businesses, and a brilliant thinker. Even though he is admired by security dealers worldwide, he is down to earth and will always take the time to answer a question about our industry. I interviewed him eight years ago for this column, and he still remembered the topic (learning how to just say “no,” sometimes).
This time I did not have a script or a list of questions or anything else that would give me a head start in the conversation we were about to have. I called him at an appointed time in April and we chatted about a few things that friends will talk about, before I asked him my first question: “Stanley, if you were a relatively new dealer just getting started in the industry, would you feel confident about your future?”
Now, mind you, he answered my question almost immediately. No preparation. No advanced thinking. “We are in a roll-up in our industry, never before seen, now. Big roll-ups become impersonal. Well-run companies that remain in business are better off than to be acquired. Employees aren’t happy with rollup companies,” Oppenheim told me. “If small companies provide dedicated service, they will do well staying in business. You should reassure smaller dealers that acquisitions actually help.”
The adage about the rising tide being helpful to all ships … it’s true. And by the way, I’m not an idle bystander to the industry; Davis Mergers & Acquisitions Group has been a leading industry broker house for a quarter-century and we’ve done more than 400 acquisitions for companies of all sizes.
After pondering Oppenheim’s answer, I realized that not only did I agree, but I have said the same thing many times in the past. I like to think about the industry’s perseverance akin America’s almost — we’ve gone through several wars and internal strife, overcoming many obstacles to get where we are today but with some areas still to improve.
Every day at my company, we get calls for security providers that are willing to sell. However, we’ve had just as many calls, maybe more, from alarm companies that were looking to buy or acquire something that has real material value. In 25 years of doing what we are doing now, I have never seen a slowdown, meltdown or letdown in the activities of the industry.
At the time of this writing, the industry just held one of the biggest ISC West shows in Las Vegas. It is particularly true for our company, seemingly just as many buyers, and of equal importance, just as many sellers are in the mix. In other words, everything was kind of back to routine like pre-pandemic times, and whatever blips have occurred in the growth of the industry have long since passed.
Every person who has a managerial responsibility has wondered about things that are changing the industry. They are. But not necessarily for the bad, many are for the good, and even some of the bad shifts have good overtones built into them.
Here’s a little test that will help you determine what the outlook is for the industry. Call or write to each of your top five manufacturers or suppliers and then ask the CEO this: What is your prognosis for the short term (one year or less), midterm (open) and long term (the future). And if you happen to find yourself at industry events where Stanley Oppenheim is in attendance, give him a shout out, let him know that you read his advice and that you’re still here, and still happy.
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About the Author
Ron Davis, SSI Contributor
Ron Davis is Security Sales & Integration's "What's the Big Idea?" columnist and contributing market analyst. He is president of Davis Marketing Group (DMG), a full-service consulting firm serving the security industry, which also includes GraybeardsRus. He has 35 years of industry experience, including founding Security Associates Int’l in the 1980s.
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