Deal Flow: Security Cameras/Access Control Business

Tap into the Booming Security Market with this Turnkey Business

For entrepreneurs through acquisition eyeing the video security and surveillance industry, a compelling opportunity has emerged in San Francisco. This turnkey Security Cameras/Access Control SaaS Reseller business is a highly attractive prospect, with a blend of recurring revenue, robust cash flow, and scalable growth potential.

Generating $800,000 in annual cash flow, the business benefits from a strong and strategic partnership with Verkada, a leader in security solutions. The company’s established subscription-based revenue model provides consistent profitability, while its lean overhead structure and SBA pre-approval lower the barriers for potential ETAs.

But, as always, the business does come with a few considerations. The reliance on Verkada as a primary partner underscores the importance of understanding the ecosystem’s competitive dynamics. Additionally, the owner’s role in maintaining customer relationships may require careful transition planning to mitigate key man risk.

Looking forward, the business offers significant avenues for growth. Enhanced marketing efforts, expansion into untapped verticals, and a strategic push to widen the customer base could potentially grow the business to new heights. If you already have expertise in SaaS or security technology, this venture is not only a revenue-generating asset, but also a platform for innovation that you could build from..

Business Overview

• Asking Price: $1,800,000
• Cash Flow: $800,000
• Gross Revenue: $5,963,855
• EBITDA: N/A
• FF&E (Furniture, Fixtures, and Equipment): $200 (included in the asking price)
• Inventory: Included in asking price
• Real Estate: N/A (home-based business with no physical office)
• Employees: 1 (owner-operated with a network of installers)
• Established: 2020
• Location: San Francisco, CA
• Reason for Selling: Owner is starting another company in the AI space and wants to focus on that.

Key Metrics & Valuation

• Cash Flow to Asking Price Ratio: The business generates $800,000 in cash flow on an asking price of $1,800,000, which results in a cash flow multiple of 2.25x. This is an attractive multiple, particularly for a business with strong cash flow relative to its revenue. A multiple of 2.25x suggests the business could be priced for a quick sale.
• Revenue and Profitability: The business generates $5,963,855 in gross revenue, which indicates that it is a mid-sized operation in the security camera and access control industry. The $800,000 cash flow suggests a relatively high-margin business, but additional details on expenses and EBITDA would be needed for a complete understanding of profitability. Based on the available data from the listing, the business is clearly profitable and generating strong returns.
• FF&E: The $200 in FF&E is modest, as the business primarily operates home-based and is focused on software reselling and partnerships rather than owning substantial physical assets. Most of the business value comes from its client relationships and partnerships.

Business Model and Operations

• Service Offering: The business resells Verkada products, which include video security cameras, access control systems, and environmental sensors. Verkada’s products are known for being cloud-based, plug-and-play, and requiring no on-site hardware, making them more scalable and easier to install than traditional on-premise solutions. The company also offers a demo environment for customer demonstrations and provides sales, marketing, and training materials to assist with sales efforts.
• Client Base: The business serves a diverse client base including local and state government agencies, schools, municipalities, manufacturing companies, and hospitality providers. The business’s ability to secure long-term contracts with government entities, such as those under NASBO, PEPPM, and CMAS, is a significant strength as these contracts provide recurring, reliable revenue.
• Sales Channels: The company relies heavily on its partnership with Verkada, which is a channel-only software company. As a Verkada reseller, the company benefits from a strong, established brand and the ongoing support from Verkada itself, which helps generate business. Additionally, the business runs a web store where customers can purchase accessories, further enhancing revenue streams.
• Home-Based Operations: The business is home-based, which reduces overhead costs and provides flexibility in terms of location. The business operates with no physical office, relying instead on a network of installers and remote operations. This structure could be ideal for a buyer looking for a scalable, low-overhead business.
• Growth and Expansion: There is substantial potential for growth within this business. The 3D printing market, cloud-based technology, and increased demand for security and access control systems provide ample opportunity to expand. A buyer could increase sales by investing in marketing, building stronger relationships with existing clients, and targeting new verticals like healthcare, retail, or commercial real estate. Additionally, the SaaS model for Verkada products offers recurring revenue, which is attractive for long-term growth.

Strengths

1. Strong Client Relationships: The business has cultivated long-term, established relationships with key clients, including government agencies and municipalities, which provides steady revenue streams. The business’s track record in securing long-term contracts with public institutions adds stability to its revenue base.
2. Partnership with Verkada: As a Verkada reseller, the business has a significant advantage, given Verkada’s status as a leader in the cloud-based security market. Verkada’s plug-and-play, cloud-based systems are increasingly popular, particularly with institutions that value the ease of installation and scalability.
3. Recurring Revenue Model: Verkada’s cloud-based SaaS model ensures recurring revenue, which provides long-term stability for the business. The ability to generate ongoing sales and support subscriptions is an attractive feature for potential buyers.
4. Low Overhead Structure: The business operates as a home-based business, significantly reducing overhead costs. This is especially advantageous for a buyer looking for a business that does not require substantial investments in physical assets or real estate.
5. SBA Pre-Approval: The business is SBA pre-approved, which facilitates financing for a potential buyer. T
6. Growth Potential: There is significant growth potential by expanding into additional verticals, increasing marketing efforts, or even expanding to other regions. The demand for security systems and access control, especially in government and educational sectors, continues to rise.

Risks and Considerations

1. Dependence on Verkada: The business is highly dependent on its partnership with Verkada. Any changes in this relationship or shifts in Verkada’s pricing, policies, or distribution strategies could impact the business. You should assess the risks associated with being a single-vendor reseller.
2. Competition: While Verkada is a leader in the space, there is competition from other security and access control providers, such as Axis Communications and others. You will need to assess how the company can maintain its competitive edge and continue to attract clients in a crowded market.
3. Owner Dependency: The business is operated by a single person, and the current owner’s departure may result in the loss of customer relationships or knowledge. The training and transition period will be paramount to making sure you can maintain client relationships and operate the business smoothly.
4. Scaling Challenges: While the business model is scalable, there may be challenges in scaling, such as increasing staffing levels to handle more clients, expanding marketing efforts, and managing the installation network. You will need to make sure that they can manage and support growth without compromising service quality.

Inventory Management: The business does not carry significant inventory, but you should assess the inventory management process for accessories and related products. Proper inventory management and relationships with suppliers will be key to maintaining product availability and fulfillment timelines.

MARKET OUTLOOK

The security cameras and access control market in the United States is experiencing significant growth, driven by technological advancements and increasing security concerns.

Security Cameras Market:

• Market Size and Growth Rate: In 2023, the U.S. security cameras market was valued at approximately USD 11.5 billion. It is projected to grow at a compound annual growth rate (CAGR) of over 18.2% between 2024 and 2032, reaching an estimated USD 51.5 billion by 2032. (Source: GM Insights)
• Smart Security Cameras Segment: Focusing on smart security cameras, the U.S. market is expected to grow from USD 4.5 billion in 2024 to USD 6.4 billion by 2029, with a CAGR of 7.54% during this period. (Source: Statista)

Access Control Market:

• Market Size and Growth Rate: The U.S. access control market was valued at USD 3.5 billion in 2024 and is anticipated to reach USD 5.3 billion by 2033, exhibiting a CAGR of 4.2% from 2025 to 2033. (Source: Imarc Group)
• Global Perspective: On a global scale, the access control market was valued at USD 11.17 billion in 2020 and is projected to grow to USD 20.02 billion by 2027, with a CAGR of 8.7% during the forecast period. (Source: Fortune Business Insights)

Key Drivers of Growth:

• Technological Advancements: The integration of artificial intelligence (AI), Internet of Things (IoT), and cloud-based solutions has enhanced the capabilities of security systems, making them more efficient and user-friendly.
• Increased Security Concerns: Rising crime rates and the need for enhanced surveillance in both residential and commercial sectors have led to higher adoption rates of security cameras and access control systems.
• Smart Home Adoption: The growing trend of smart homes has increased the demand for integrated security solutions, including smart cameras and access control systems.

The U.S. security cameras and access control market is on a robust growth trajectory, fueled by technological innovations and a heightened focus on security across various sectors.

What do you think? Check it out and let me know in the comments.