This week's episode of Automation Unplugged is an interview with Ryan Cohen, President of Westco Security & Technology Systems.

About Ryan Cohen:

Ryan Cohen graduated from the University of Missouri in 2009 with a degree in Finance and Economics and a minor in Real Estate. He received his MBA from Lindenwood University in 2014 with an emphasis in Entrepreneurship. He joined Westco in 2013, a full-service home and business security and automation company established in 1983, where he has spent the past 11 years. Westco specializes in providing comprehensive security and home automation services, with a strong focus on the residential market. Under his leadership, Westco has continued to innovate and grow, offering cutting-edge technology to meet the evolving needs of its clients.

During this Q&A, we’ll cover:

• HRyan’s experience navigating multiple business acquisitions in 2024, including the unique challenges of acquiring a family business.
• His perspective on recurring revenue to provide stability and growth in his automation and security business.
• The strategy and Ryan’s experience behind launching WestCo’s new website with One Firefly.

SEE ALSO: Show #280: Mastering Reputation: The Power of Reviews for Business Growth with Katie Frogge

Transcript

Ron:

HHello hello, Ron Callis here with another episode of Automation Unplugged. Although I know this episode's going to land in early December, I believe that's the team's plan, this is being recorded pre election. So some of the conversation we're going to have here is about the upcoming election, but just FYI, regarding the timing. So today, we have a great guest, actually a client here at one Firefly, a great business, great operator. We have Ryan Cohen, and he is the president and now owner - and we're gonna talk about that - of Westco Security and Technology Systems, based in Chesterfield, Missouri. So let's go ahead and bring in Ryan and let's get the conversation started. Ryan, how are you, sir?

Ryan:

Hey, Ron. I'm great. How are you today?

Ron:

HI am well, now I was just mentioning that Westco Security and Technology Systems is based in Chesterfield, Missouri. They're in Chesterfield. Is that where you're coming to us from?

Ryan:

Yes, I am. We are a suburb just right outside of St. Louis. So we serve St. Louis and the surrounding areas.

Ron:

HOkay. Awesome. Are you from that part of the country?

Ryan:

Born and raised, tried to leave and got sucked right back in back here. Seems like it happens to a lot of people from here.

Ron:

HThat's great. You went to school in that same area.

Ryan:

Yeah, high school here, college at University of Missouri and never left. Tried to, and just got sucked right back in.

Ron:

HYou say that as if that's a bad thing. Do you, do you feel that?

Ryan:

No, it's a great place. So I've been to that

Ron:

HSo I've been to that part of the country. It's great. Lovely people.

Ryan:

There's something to be said about living somewhere else, I think when you're younger for a little while, to feel something else out. And I look back and wish I got the opportunity to do that. And I didn't.

Ron:

HI'm actually from a part of the country and I did leave. So I'm from Southeast Virginia. I have nothing against Southeast Virginia. I love Southeast Virginia. It's my roots. But when I went to college, I ended up going out at Virginia Tech and then, with some corporate jobs, I got bounced around the country and then ultimately landed here in Florida and I did leave. So I'm in Fort Lauderdale. Such as it is. So help us understand what type of work, Ryan, does Westco - I mean, I see “security and technology systems” in the name. What is a typical type of project you guys do?

Ryan:

Yeah, we're a full service integrator. We do anything from a small burglar alarm to a full scale home automation system, in both residential and commercial businesses. So, we will do a minimal burglar alarm where that is all we are doing, or we'll do an access control system, for….thinking of a project here recently, we did an access control system for a country club. It was almost, I think, consisted of about 15 doors of access for about 3000 members. We'll do fire alarms. We'll do burglar alarms. We do just full scale automation. We're a Control4 and Lutron dealer, so we fall, we cover the whole gamut of an integrator, I would say.

Ron:

HWhat, do you mind sharing, I'll just say 2024, what split of revenue was residential versus commercial?

Ryan:

Yeah, we are probably about 60 percent residential, about 40 percent commercial, and the commercial side of the business is a side that we're definitely shooting for growth in 2025.

Ron:

HOkay. Interesting. And is, are those projects almost entirely there in St. Louis?

Ryan:

Yeah. Most of these projects are in St. Louis. We will get out to the Lake of the Ozarks, which is where a lot of people in St. Louis have vacation homes, and do some projects down there every once in a while. Right now, in fact, next week, we're going to Chicago for a small project, but it's not that often that we do that.

Ron:

HGeographically, for those of us that aren't so geographically inclined. So for you to head to the Ozarks, how much of a commute is that for say, your techs to go from your office?

Ryan:

Two and a half to three hour drive from our office down to the Ozarks. So, you can go down and back in a day, but there's a lot of wasted time. So if we're going down there, we're usually staying for a day or two or three, depending on the project. We don't just go down there for a small system. It's something that has to make sense for us to really want to go down there and do it.

Ron:

HDo you guys go and pursue and market to get jobs in the Ozarks or is it really you're following your clients down there?

Ryan:

We’re following our clients. We don't, no. We're just truly following our clients down there. If they ask, we will, we'll entertain the idea of it. So, and it happens more often than you think. We've been down a few times this past year.

Ron:

HOkay. And just so that our audience gets a little more familiar with your business, what are, I'll just say, the low hanging fruit here on the automation side of the business? What are you guys generally doing for control or lighting? What are some of the big brands that you guys are behind?

Ryan:

We use Control4 for our automation systems and we're using Lutron for our lighting systems, almost exclusively. On smaller systems, we will do Control4 for lighting, but usually if we're doing a larger system, and we don't get into many small systems, we pretty much do whenever we're doing an automation system, it usually ends up being a whole house, so we're almost always exclusively using Lutron for that.

Ron:

HOkay. That makes sense. And then on the security side, does it work similarly? Do you get around like one or two big brands for that side of the business? Or is it more disparate?

Ryan:

Yeah, we have a few different products that we use for security? We typically try and utilize alarm.com's platform when we're doing security. Brands, as far as security goes, I don't think people really care about, but it's the user interface that they're using is what we really want to give them. We want to give them a good user interface and alarm.com has done a great job of doing that, and they work with a variety of different partners so we can use a variety of different panels to basically give each end user the same interface for that.

Ron:

HI think, at our office at one Firefly in Coral Springs, I think we use alarm.com.

Ryan:

They're a huge player in the industry. They probably, from what I think, have the best end user app available out there right now. They're easy to work with and they can also do automation as well. So if you have a small system that the customer doesn't necessarily have the budget for Control4 or some sort of platform out there, alarm.com can handle a lot of what they do cloud based. So we can create a smaller system. We can give them garage door control. We can integrate Lutron to it. We can do a lot of things that we would do with Control4 on a much smaller scale. And then it's a much more customer friendly budget.

Ron:

HGiven that you're, you have one foot in the automation space and one foot in security. What are the big shows that you go to annually? Like where do you go if either you or your techs are trying to get exposed to what's latest?

Ryan:

So for security, every year we go to ISE West. That's out in Las Vegas. It's usually every April. So we visit that show every year. And that is really just a security based trade show. And alternatively, we'd go to CEDIA every September.

Ron:

HYeah. But this, this CEDIA, there was a wrinkle in the matrix.

Ryan:

It's a little bit of a wrinkle, had COVID, had to cancel my flight the morning of. So my team went, I stayed back and basically felt pretty terrible for a few days and I'm glad I didn't go.

Ron:

HWas that your first time getting COVID?

Ryan:

Ah, no. Had it. I'm a routine offender.

Ron:

HYeah, we've had it multiple times in this household, but it seems like the latest times, like it's, it's more of like a cold versus something severe.

Ryan:

Yeah, it wasn't bad. And I felt bad for about two days and then you move on. So the days of isolation, luckily you're past us.

Ron:

HOkay. So you recently, and I want to say it was this year, beginning of this year, is that when you acquired Westco, correct?

Ryan:

Yeah. January 1st, I purchased the company.

Ron:

HAnd you said, why stop at one when I could purchase two? So you actually then purchased another business. We're going to get into that. So for those that are eager to learn about Ryan's experiences completing that acquisition and some of his lessons, stay tuned, but Ryan, I’d love you to start with, just take us back in time. Help us understand your background. Like, where'd you come from?

Ryan:

Well, I grew up in St. Louis. I've always been passionate about technology. It's always been something I've been interested in. When I was in high school, I was working at Circuit City for a long time. And over college breaks, I would come back and continue to work at Circuit City. I always joked with people and said I was the one that put them out of business because that was right around when I quit.

Ron:

HThat’s funny. Were you a fire dog or were you on the floor or what were you doing?

Ryan:

I was on the floor selling computers, cameras, and handheld cameras and just standard digital cameras back in the day and selling TVs.

Ron:

HThat's great. Circuit City's, I want to say it was a Richmond, Virginia based company. And so, I mean, being from Southeast Virginia, I was born and raised in visiting Circuit Cities and it was a sad day to see them go away.

Ryan:

It was, I loved that job. As a high school kid, I couldn't have asked honestly for a better job. I was probably working 30 hours a week. And then after, I'd leave there and I'd go play sports for a few hours. And then I'd go back and basically repeat. But I was always passionate about technology. So I started out there and then I went to college and I was like, well, I'm not sure what I want to do. So I got a finance degree and I went to the University of Missouri. So I'm a zoom. Got a finance degree with basically a double major, an economics degree and a finance degree with an emphasis in real estate. Graduated college and decided to go into corporate America. I landed a job, it was 2008, 2009. The economy was not great.

Ron:

HPerfect time to leave college and go get a job.

Ryan:

Exactly. Which is why I didn't get away from St. Louis. I was looking outside of St. Louis to try and move. Couldn't find a job. I was lucky to land a job with the commercial real estate company here in St. Louis, and they have branches all across the country. Did that for a few years in corporate America, learned that I did not love corporate America. It just was not for me. When I grew up, my dad worked for himself. He had his own business and it was something that I think I always saw and something I think I always knew I wanted was to run my own business and not work for, climb my way up the big corporate ladder. Towards the end of that, I was getting my MBA, and I was getting married, and my father in law had a business, and he owned his own business, and happened to be Westco Security. We had always joked for many years about me coming to work for him. Well, it just so happens, he had a position open up and we sat down and we said, do we want to do this? We went over the risks. We went over the benefits. We said, this could go south. This could not be great, or it could be the best thing that happens to both of us. And we decided to do it. And 11 years later, 12 years later, here I am, running the show over here. So that's how we got to this point.

Ron:

HWhen you joined Westco, you joined the father in law's business. What were some of the roles or functions you had in the business? And approximately what time was that?

Ryan:

Well, yeah, so this was 2013. I joined the company and it took me about probably four or five years to fully feel comfortable. Like I knew what I was actually doing because it was such a different place. I love technology, but this was so different from what I was used to. I had to learn from the ground up about burglar alarms. So I would go out on calls with technicians, basically jump in the field, get my hands dirty because I wanted to understand how it was installed. And I wanted to understand how it was programmed. I wanted to understand how you could sell it. I basically wanted to learn everything about it so that I could talk intelligently and really feel comfortable, like I knew what I was doing. So I was out in the field. I was bringing equipment home at night, setting up a test bench in my house, playing with things, programming things, breaking them, fixing it, repairing it, watching a lot of webinars, doing a lot of online trainings, and basically just absorbing as much as I could to ensure that, just to make sure I was, so I didn't feel so dumb, honestly, because it was completely different. I always joke that if you want to get a good job, just marry someone who owns a business and go to work for him. Well, it's not exactly that easy because there's a lot of work involved with it.

Ron:

HOh, I've said for many years for certain, anyone that spent any time with me, that I think running and owning a business is, it's equally thrilling and equally terrifyingly hard. It's one of the harder things to be successful at that people could imagine to do. It's really hard.

Ryan:

It's not easy to do. And the past probably five, six years, I really truly have been running Westco for the most part. So the title transition at the beginning of this year wasn't such a dramatic change. However, when that title changes, it's all on you. It's not on, there's no one else to fall back on.

Ron:

HWell, let's bring that then to the present. So you, well, this year, 2024, you did purchase the business. So how did that opportunity present itself, or take us through some of those processes and I'll just preface that with, you know, our industry, I'd say the automation and security space has been maturing for a number of years. There's been a lot of M&A activity with security businesses for many years, right? You have monitored accounts. They're generally worth a multiple of MRR. And there's a lot of precedent out there, but there's been more and more M&A activity just in the integration space, which is, I would say a newer industry, maybe when compared to security. Sort of some people listening like, Oh, Ron, that's not correct. I think that's approximately correct. You disagree, Ryan, please, let me know, but that activity is happening. And you are now part of that story because you've now acquired, you worked within the business and you've acquired that business. So how did that go down?

Ryan:

So, it was interesting. The plan, I don't think was, I don't think my….I'll call my boss, but my father in law, was fully inclined to really release the whole company to me, but there's a few things that happen when you go to buy a business and you have to look at. There's a lot of cash exchange in the sale of a business. And, we wanted to make sure we benefited each other, from a tax advantage and how can we not hose each other essentially with taxes and it turned out I had to acquire the entire business really for that to be. For it to make the most sense for him to sell it. And for me to acquire it, it was both tax advantage. It was basically advantageous for both of us to do it that way.

Ron:

HCould you give a little bit more color there? A little bit more, I don't want any private or proprietary information, but just generalities of what you mean by that.

Ryan:

Because you’re a corporation, you have shares of stock and essentially when he goes to sell the business, there's a lot of capital gains that it can be, if you didn't give up the entire business, he'll be paying income tax on the business and capital gain taxes the way I understood it. And we talked to CPAs, attorneys and the best people to decide how to do this. And by selling the business outright, you're basically paying capital gains tax, which is a lower tax bracket than if he was not going to do it that way. So it was advantageous to him to do that.

Ron:

HI see.

Ryan:

It's all, honestly, a lot of that is over my head, which is why you rely on CPAs, attorneys, financial planners, you have to get all the parties involved to make this happen. And you also have to tread lightly a little when you're dealing with family business too, because he's not trying to make my life worse and I'm not trying to make his life worse either.

Ron:

HWell, in a normal sale, you want - he, the person selling, wants to get the most for the thing they're selling. And if you're the buyer, you want to get the thing for the best. I don't want to say the cheapest, but for the best deal, but when that buyer and seller is inside of the same household, and you have to see them at Thanksgiving dinner, then that changes that dynamic. I mean, I would imagine pretty considerably.

Ryan:

Yeah, you have to, I think we both didn't want to, we'd had a good run of 11 years doing this. There was no conflict, everything had worked out. Perfectly. And we've heard horror stories of people when it went to the table to try and acquire the business or change ownership, that is just when things went south. And we both were cognizant of the fact that we didn't want that to happen. So I think we both found a fair deal. What we thought would be good for me and good for him, and I wouldn't say that I got any special deal. That's by no means the case, but, it just, I don't think a traditional bank would have given you a type of loan that you're looking for. So the nice thing is, is when you're dealing with family businesses, a lot of times when they do, this person that previously owned it can assist with financing the business, let's say so that, you don't have to go to a bank and get a loan and you can pay them back over a specified amount of time.

Ron:

HAs long as the business is generating profit and cash flow.

Ryan:

As long as business is generating cash and you can afford that payment, there's, there's ways to do it where you don't have to go to a bank and get a traditional loan to make it more affordable. So if people are out there, looking around like, how am I going to afford it? Well, you can look at the SBA loans, like we looked at that, looked at commercial business or traditional banking loans, but getting a loan is, it's hard, especially for a large amount of money. And then you have to pay a very, very high interest rate on it.

Ron:

HI had a business partner here at One Firefly. I think many watching or listening know that. And I bought him out of the business. I bought his shares in 2021. We negotiated a deal in 2020 and consummated the deal by getting him paid in 2021. And that was an SBA loan. And that was, that let's just say getting a government SBA loan is one heck of a process.

Ryan:

Yeah. I looked into it and it was, it looked like a lot of paper, not that paperwork, but it was, it's not easy.

Ron:

HSix months of paper. I think we re-sent the same paperwork at least five times. Maybe more.

Ryan:

Yeah. They don't give them out easily. That's for sure. But in an ideal world, if you don't have to do that, and I think a lot of small businesses, as long as the owner doesn't need the cash today, it's completely feasible to do exactly what we did. I think most businesses, when we were talking to this structure, did a deal similar because it's hard.

Ron:

HI'm curious, just in terms of leadership or roles and responsibilities, you finished the deal, you finished it in January, correct, of this year, 2024, finished it.

Ryan:

Well, the deal was closed on January 1st. We finished the deal in December of 2023.

Ron:

HOkay. What was your process of thinking through roles and responsibilities? Or had you already been assuming more and more leadership responsibilities in the business over the preceding years?

Ryan:

I have already been running the business basically for the past five or six years, essentially.

Ron:

HSo that was easier.

Ryan:

So it wasn't like I was all of a sudden assuming a new role. My title may be changed, but my daily job responsibilities honestly did not change that much. I pumped the brakes. I used to go out in the field a lot more and actually do more hands-on programming because I'm also certified to program Lutron and Control4.

Ron:

HOkay.

Ryan:

And I wanted to have my hands in it to make sure it was done the way we wanted it. I've relinquished some of that control and given it more to my technicians and project managers who are also certified in Control4 and in Lutron for that, just to, and use more of a watchful eye, but not necessarily be the guy in the field. Because I don't think that's where I need to be now. I need to be here running the business, helping the office staff, answering questions, drumming up more business, pushing the company to where we're going next, type of things.

Ron:

HExciting. Well, so you also completed a separate acquisition in that same quarter. So Q1 of 2024, I mean, how was one not enough? Did you say, let's complicate life and try to get two done here?

Ryan:

Buying two businesses or acquiring another company or two companies in about 35 days was not on the radar when I took over Westco, but we had been talking with another company and they were, their name was Custom Design and Installation, for a few years. And in December they reached out. And said, let's revisit some of these conversations. And CDI Custom Design Installations, they were an audio video company and automation company. That was all they did. They installed alarms, but they sold off the accounts. So they never monitored. They were truly an automation and audio video company. And we begin conversations again. And I said, well, guys, hold on. Let's wait a second here because things have changed because the relationship between myself and CDI was actually with my father in law. He knew the previous owners. And I said, the thing has changed. The game has changed a little here. Cause I am assuming ownership on January 1st, documents are signed. We're just waiting for basically the time clock to tick. So we sat down, we continued to talk. We came to terms on a deal and we closed that deal right in the beginning of February. And they rolled into our office. So now not only do we have Wesco, we brought on two of their technicians and one of the owners, and they were a small business, so they now are employees here, so they've been helping bring in a lot of automation with them. They brought a lot more home builders who we work with, they brought in a whole skill set of audio, video and automation systems. They were an AMX dealer for the longest time. And so with that, they brought the skill set of knowing how to program an AMX system, which is something we do not, and it's not something that we're looking to continue to support. We're trying to move those customers out of AMX into Control4, but that's the level that they were getting into was high, high end homes, high, high end automation.

Ron:

HWere there any lessons that you learned, or that you feel, practices that you've implemented that helped you integrate those people into your business?

Ryan:

Yeah, there definitely were some headaches I think in the beginning. And I think a lot of the, I think the key when you're integrating two businesses together is communication, because initially, when we first started, we were very well, we were in a way running two separate businesses, all the cash may have been running through Westco, but the way we were handling the customers, we were doing it a CDI way and we were doing it Westco way and the communication wasn't working because all the phones were rolling into Wesco. So, something might've happened in one business and we may not have been aware of it on the other side. So we learned, very quickly, that we have to come up with a way to communicate across both companies and make sure that if something is going on, if you took, they were used to just calling the previous owners, the previous technicians’ cell phones, which is great, call everyone all day long, but that information, if they talk to someone, needs to be relayed here to the office, because when they call in here at our office, we need to know what's going on as well. And there were some headaches there because they would call in. We wouldn't know what's going on. We'd call them back. We'd reach back out. And so we just had to make sure everyone was essentially on the same page. And once you get that, I think once you can open up the communication lines and create a process and show how work is going to flow. It makes everyone's life a lot easier.

Ron:

HNo, that makes sense. So, switching gears, we are just prior to this election, 2024 presidential election. And I know here in Florida, there's obviously all sorts of amendments and everything else is going to be on the ballot. I have not yet voted, but I'll be early voting this week with my wife. What impact, when this comes out, when people are tuning in, listening to us or watching us, this thing will, the election will already be behind us. What are you forecasting? Just, practicing your prediction skills as a business leader and owner. What do you think is going to happen this fall and maybe into next year as a result of now, right now we don't know who wins. So is there an A and a B option in terms of your, your prediction?

Ryan:

I think no, regardless who wins, I think everyone, I think we're going to be set up fine. But I do think a lot of our customers that we deal with are higher wealth clients. Granted, we are in Missouri. A lot of them probably lean a little bit more towards Republican policies than they do Democratic policies and they like the tax advantage policies that Republican policies have to offer a lot of times. And I'm not a political person really by any means, but I've talked to a number of clients here to say, depending on the election and who wins, they may or may not move forward with some projects based on the tax policies that are going to be in place. So it'll be interesting to see. That if a Republican president is nominated, I think from my business alone, I actually think it might help my business just because I know some certain projects that are coming down the pipeline that they'll move forward with, and there's a few clients I know that have said this to me. I think if a Democratic president is elected, I don't know if I'll necessarily move forward with some of these projects. They might wait a year or two to see if they will and see how the tax policy lays out. So I think it very well could, it could have a major effect on what we're looking for in 2025…..I don’t think 2025 so much, but probably 2026.

Ron:

HA new president, which would, which would go in, in January. If they change tax policy, that would affect 2026, right?

Ryan:

It would affect 2026. It wouldn't affect so much 2025 because the policy that's in place in 2025, I think is in place through the end of 2025. And I don’t think they'll change policy mid year, but I am by no means an expert on policies.

Ron:

HI’m sure we have people listening to us or watching us go, oh my God, Ryan and Ron don't know what they're talking about.

Ryan:

And it's probably fair.

Ron:

HThat might be true, but we have opinions and that's all we're sharing.

Ryan:

I do know from their perspective that depending on who's elected, it very well could affect some of the projects that we have going into our pipe. And it's just, and a lot of, I think it has to do with just a lot of that net wealth or the net worth of a lot of the individuals that we deal with.

Ron:

HYeah, that makes sense. Well, I'm optimistic that once a decision is made, and at some point in the coming weeks or months, our country will settle down and they'll accept the new normal and God willing, and that our economy should go up into the right. So I don't want to be, I don't want to ignore a lot of the stresses and anxiety that happen in society, particularly in America right now due to elections. But at the end of the day, the American economy is strong. It's still the best place on planet earth to be doing business. And anyone listening to this that is in America should feel very blessed that they're in America and able to do business in America. And that's regardless of who your president or who your governor is.

Ryan:

Sorry.

Ron:

HGo ahead.

Ryan:

I feel the economy has honestly been quite strong, even though, there's, you just really don't know. I mean, we're having a, from our business perspective, we're having a great year this year. And I think a lot of it has been related to just the strength of the economy that we're seeing here. People are spending. People are either traveling or spending. They are wanting to put improvements into their home. Our new construction site is definitely down, which is, but our remodeling side has been way up. People are pouring money into their current homes and it's been really good for us here in St. Louis.

Ron:

HYeah. The data that I am aware of, I'm in some of the buying groups and I'd say that the groups are anywhere from a little bit up to a little bit down. So I'm going to just, I'm going to split the difference and call it flat. And so if, if 2024 is flat so far for our industry, it's still pretty good because if you look back at 2021, 2022, 2023, I mean, these were gangbuster years of business volume and growth for our industry. And so if our industry needed to take a little bit of a breather this year before they go and take that next leg up, which is what I think's happening. I think it's normal. It's just normal business cycle stuff. But then I hear you, Ryan, like your elements of your business are very busy. And, and I'm hearing that from different folks. Like there, some folks are just gangbusters.

Ryan:

Yeah, it's been an interesting year. I wasn't sure how it was going to play out. I was at a conference in January and they brought an economist to talk to us. And basically everything that the economist thought was going to happen throughout this year has not happened. And he was a very bright guy and it just goes to show that, I mean, you can look at the metrics, you can look at the statistics. It doesn't, at the end of the day, the economy was strong. I mean, it's just people have been buying, at least in our part of town.

Ron:

HSo I agree. I want to switch gears. Ryan, you just completed and it just, I want to say, correct me, launched in the last day, in the last week or so, your brand new website,

Ryan:

Our website launched last night at like 10 PM central time.

Ron:

HAwesome. Well, the folks that are listening, what I'm sharing on the screen is the brand new Westco Security website, but maybe Ryan, if you'll describe a little bit on in terms of what are your first impressions of what you've put on the internet and this is a little bit self serving when One Firefly did build it, but like, what do you like? What do you not like? How's it been so far?

Ryan:

Well, I don't think there's anything that I really don't like about the website. I wanted to make sure that we were doing those sites because there was such, and it's not One Firefly’s fault, but One Firefly does a lot. You guys play so well in the automation and integration space. I wanted to make sure that we didn't lose sight of the security side of my business, because that is a huge, huge, huge portion of my business. So when, as we were laying the site out, I wanted to make sure that we had a really good, both residential and security focused on there. So that no matter who came on there, they would see if they're coming for an automation side, or if they're coming for, I didn't want him to land on a website that only showed automation. I wanted him to land on a site that showed automation in addition to video surveillance, access control, burglar alarms, that's more on a, on a commercial side, but all the services that we offer. And I think you guys really accomplished that, you and your team accomplished all of what I was really looking for so that we can show and showcase everything that it is that we do.

Ron:

HI love here on your about page that the legacy and the history of the brand that is Westco, that you're telling that story in this timeline. I think that, in marketing or business, it's really important to describe to the visitor or the prospect how you're different. Like you never want to disparage anybody else, but you certainly want to shine a light on what makes you different and special. And for a business that's been in business for so many years, like you guys have, I think that's really cool. I think that that's, certainly to certain types of customers that are going to appreciate the family owned, the generational business that you guys have built telling that story on the website.

Ryan:

And we want to keep that family owned feel on there as well. We want to make it seem like when someone calls in, we want to separate ourselves out from the big alarm companies. Let's say that when you call in, when you call our office here, you get a person in a lot of people that you get the same person every time. Cause we're small. We didn't want to lose that. Be out of touch with our customer base. I want the customers to know that, hey, not I'm the owner, but I also care if you need me to come out to your home, I'll come out to your home. You're not going to get that with some of the larger dealers. And I think that's what helps us acquire some of the clientele that we get because they have my cell phone number, they can call me whenever they want. They know that, and they can call our office. They know that too. They know we have technicians on call 24 seven that are willing to help and answer the phone for both AV and security systems.

Ron:

HWhat was the process like to get this website designed and built? What was your, maybe a synopsis of your experience?

Ryan:

Well, we were already a One Firefly customer. We were using you guys for our social media, creating some blogs, creating some monthly newsletters for us. So I talked to my account manager, Keith, who has been awesome. It's been something on my radar that I've wanted to do for some time. It wasn't until I bought the business that I really decided to push towards this because I thought of the website or just creating the website was a big undertaking and you guys honestly made it easy. You guys had the process in place. Once we started, I had a, basically a fact finding call with Stephen and we basically laid out the whole site, discussed the budget, thought about the pages that were important to me and he laid out the whole site and we basically created what I would call a spreadsheet of the pages that were important to us. And then that spreadsheet was turned into what you see now, and it was quite easy

Ron:

HFrom the time where you did that meeting, spec’ing it out to being able to see something that was presented to you for your approval or your critique. How long did that take?

Ryan:

They said it would take about 60 to 90 days, and I'm trying to think, I think we were closer to the 60ish day mark, maybe a little longer, but it was right in where you guys promised. We did not, if I would have had a lot of changes, I think it would have dragged on longer, but honestly, the guy that, what you guys presented, there were some changes that we had to tweak and do things that make it to my liking, but overall, your team really just knocked it out of the park and it made it a quick turnaround, which is great because I really wanted to have the site launched by the beginning of 2025 and we're there as of yesterday.

Ron:

HYeah, that's exciting. I'm so excited. I'm assuming our team, I don't know this, Keith, we'll probably get him an early version of this video. So Keith, I know he's going to be eager to watch this interview, but I would imagine we're planning to get this announced out to your customer base, like via some email communication or announcements.

Ryan:

100 percent in conjunction with the website, we're doing an SEO package with your team to help boost our online presence, or just increase traffic more than what we already have. So I am sure I will work with your team, we are meeting on that I think later this week, actually. To talk about that and how can we get this out to the public? How can people see visibility into our site? What's the best way to use this as a marketing tool to not only grow our existing customer base, but really as a tool to create new customers? Because those are the hardest customers to acquire. Once you have a customer, it's easy to get them and do another sale, but it's really hard to acquire new customers. And I want to use this site, hopefully to generate customer traffic online. People coming to our site that aren't a referral, that's really what I'm hoping. Or if people are a referral, use the site as a way to reassure them that like, this is a, we are something professional that they land on, that this looks like we do high quality work. And I think the site reflects that.

Ron:

HI have a basic, very simple belief that it's a good idea for your business to be easy to find if someone is trying to conduct research on your business or your solutions or your brands in your marketplace, like it doesn't help you, Ryan, if someone in Princeton, New Jersey is doing a search and they land on your business in St. Louis, like that doesn't help you. But if someone in St. Louis or someone in the Ozarks, that's maybe going to do a project. And if they find you, that's probably a very interesting person that you would want navigating your website. Now, will they buy? Will they convert? That's where we're talking about dropping them down the funnel to where ultimately at least you, you or your team get to have a conversation with them, but in this very competitive world of the internet and all the changes that are happening because of AI and all this other stuff that I'm sure my team has talked to you about, Ryan, it is becoming increasingly hard to get your business to stand out. If you are not being proactive in that regard, like you are in the driver's seat for the visibility of your business, or you're in the passenger seat. And I believe that you need to be in the driver's seat. We have a fiduciary responsibility to our people, our team, our clients, our business, our success to be in the driver's seat. So you've been in that driver's seat for years now, and I commend you. And I'm so excited for your beautiful new website.

Ryan:

I'm really excited to see about where this is going to take us for 2025, 2026 and beyond, because I think that it is going to be a huge, huge asset to our business. I think it gives us the credibility that people are looking for when they find us on the internet. And I'm really proud of it and I'm really proud of the work that your guys and your team did on it as well.

Ron:

HThere's a team effort in order for projects, whether, just as you mentioned, when you were acquiring businesses, plural, you were interacting with CPAs and financial planners and legal counsel. Like you have to have a good team in order for something complicated like that to happen. And everybody has to carry their weight on that team. And if there's a weak leg of that stool, that thing doesn't hold the weight. It doesn't get done in a timely manner.

Ryan:

I would say the weakest leg of the side was probably me, because your team was on top of it all and they're waiting on me. To have the time to review, make the changes, go through everything, and that's the hardest part as you're trying to run a business and do all these other undertakings, I was, I wanted to be the final say, obviously on the website. And it's, when you're trying to do everything else, I was probably the weakest link that was slowing everything down.

Ron:

HYou don't need to carry any burden for that, Ryan, I can tell you we've now worked with many businesses for many years, we know our clients are very busy, there's no secret. You're very busy. You all are wearing many hats in your businesses with lots of responsibilities and demands on your time and our team and any team that you work with as a small business should be mindful of the demands on your time as a small business leader. And when you have a good partner, I would say our team understands that then you make accommodations or you work around peoples’ schedules or you try to communicate in an accelerated fashion or high performance way so that each other knows what's going on and where things are at.

Ryan:

Well, and I think us being a small business and you guys being a relatively small business too, I think it helps everyone understand our business and where we're coming from and it makes the two parties work well together. And it, the whole, the whole from the discussions initially to the design, to the build out, to the review, it was easy. I mean, it wasn't, it wasn't an overly time consuming process on my end because your guy's team was right on their A game the whole time.

Ron:

HWell, I appreciate that. Speaking of A Game, that's my transition statement. I want to transition to your A Game, which is recurring revenue. And you guys are doing a successful job and have for years at getting obviously security projects, old security, recurring contracts sold there. I'd love to know how you think about that. And I'm also curious, as you said at the intro, alarm.com allows for automation, and I'm curious if you've built in some of those automation bells and whistle add-ons into the recurring package or how you think about that. And you've also been focused on your service contracts. And so tell us, I guess, tell me big picture, what do you think about recurring and how do you engineer that or manage that in the business?

Ryan:

So us being, 40 years ago when we started, we were only doing burglar alarms, and when you're doing burglar alarms, recurring revenue is a huge, huge, huge aspect of the business. It's how your business is valued. They value it on a multiple round. You touched on this earlier, but your business is valued on a multiple for your accounts. Now, you can have as many accounts as you want, but if those accounts aren't under contract, they're really not worth anything. So it's not only having accounts that are under contract or having a bunch of recurring accounts, but you wanna make sure these accounts are under contract, because if you ever go to sell your business, you're gonna use that as a multiple or help get the valuation of the company from a purely security aspect. It also helps when times are tough. So recurring revenue is huge. If you ever do go into a decline or a recession, it helps to know that you're going to have this money coming in every month, keeps people employed, it keeps the lights on. It's just a great asset to have, which is why we'll do anything, from a $500 alarm to a few hundred thousand dollar automation system, because we want that recurring revenue. We generate in a few ways. We do charge different tiers. So Ron, you touched on alarm.com, we offer standard alarm monitoring, which is just your alarm goes off, you're going to get a call, and we can dispatch the police. We offer alarm monitoring with an app, which means you can just remotely arm and disarm the system, maybe manage your user codes. And then we have another tier where we offer it with automation. So we're charging levels based on the tier of service that you're getting, cause not everyone wants automation and we won't, we don't want to steer those customers. We have different rates for residential versus commercial clients. We have different rates for fire alarm monitoring versus anything else. We are not doing any monitoring or recurring revenue now off of phone lines. Everything is cellular and IP based. Everything's been that way for about 10 years for us. We haven't put a new account on a phone line in about 10 years.

Ron:

HAll cell repeaters, I'm assuming.

Ryan:

All cellular, all internet based, but we've taken what we know in the alarm business and it's helped us create efficient service plans for our audio video business. Now we still have some tweaking to do on this. I don't think we found the golden ticket to service plans for AV yet. But we're working towards it. We have a number of clients on recurring service plans. We have a number of clients on after our support plans. We offer service plans for both video surveillance and burglar alarms. So that was and we've been doing that. So it was easy for us to come up with ways to offer a service plan for AV and we have the software behind it that allows us to easily track and bill out these service plans and recurring revenue and generate recurring work orders, if we need to.

Ron:

HTell me about the software side, I know you and I both have had conversations with people in the industry and they are on occasion struggling with using QuickBooks for recurring billings or whatever their software stack is for accounting. Security businesses do it differently, I think. What do you recommend or what? What do you recommend people consider?

Ryan:

So our accounting software at the end of the day is still QuickBooks. We use QuickBooks for our daily accounting because that's what our CPA uses. That's what our bookkeeper uses. QuickBooks is our accounting software. However, we have a CRM software, and the one we use currently is called Alarm Biller, and Alarm Biller is able to manage our customers, Alarm Biller are integrated. This was designed for the security industry. A lot of the software that's out there for the AV industry doesn't fit well in the security industry, because in the security industry you need to track certain things like zone lists. You need to be able to build recurring efficiently. You need to be able to set up recurring work orders or generate new work orders very, very easily. You need to manage a calendar that has a lot of, and not that AV companies don't, but we have a lot of open tickets on a daily basis. We need to be able to easily track and manage those service calls, and we want that software to, in a way, hopefully integrate with our central station software and the central station software is where an alarm comes in and that's what the operators use to dispatch out an alarm. Now, Alarm Biller that we're using doesn't currently integrate with our central station software, but alarm.com does, and we'll be able to pull a lot of the information in from alarm.com, enter it in there. And it automatically flows over towards our other software. But the biggest piece about this is to be able to invoice out recurring and do it easily. And I think that's where a lot of companies might struggle, it's great, but how am I going to invoice this out? And if you have the right software in place, it makes it a lot easier. There's another software that we've been looking at using. I'm not using them currently, but I'll throw their name out there. Cause they have a really great product. It's called Workhorse and Workhorse has a wonderful software suite out there. It's a guy, small business, and they integrate and play really, really well in the burglar alarm space. They do recurring really, really well. They do work order generation really, really well, and they also understand the AV space too. So it's worth a look if people are out there looking for software

Ron:

HAnd restate for me, what is the software you are using?

Ryan:

We're using a software called Alarm Biller.

Ron:

HAlarm Biller. Do you use that for your service and maintenance contracts on the AV side as well?

Ryan:

We do. Yeah. So we've basically tweaked it to work for both sides of our business and it can, it's not that it's not designed to work for that side, it's flexible enough to where it does work well for us, but I think we're open to looking at new software solutions as well. But what Alarm Biller does well is it does billing, it's in the name. It handles invoicing really, really, really well and really, really, really easy for us. So it's easy for us to see who's past due. It's easy for us to create new recurring revenue. It's automatic. It just does it, and it can email out the invoices. It can mail them out. We can have a third party service mail them for us if we want to.

Ron:

HFor a customer, I think I know the answer, but I don't want to make an assumption. So I'll ask you the first question here. And that is of a customer that gets a security or surveillance system. What percentage of those customers end up signing up for some recurring billing?

Ryan:

So if it's monthly monitoring, almost, I would say 98 percent of our customers that are getting a service. So let me rephrase this. We're also charging recurring monitoring for surveillance systems as well. If a customer wants remote access on their surveillance system, we're charging for that. So I would say any customer that gets surveillance, about 98 percent of our customers, they get a security system or a surveillance system, are getting a monitoring contract on it, but we also cut our prices. If they are, if they want a, and if they sign up for a monitoring contract, we give them a break on the price of the equipment upfront to get them in there. If they don't want the price of our product inherently goes up because otherwise it's, otherwise it may not necessarily be worth it for us to really do the job.

Ron:

HSo it's very high conversion rate for both security and surveillance installations, is that correct?

Ryan:

And even access control. A lot of these access control systems are becoming cloud based. It's a cloud based access control system. There's recurring revenue to be generated.

Ron:

HIs that more commercially or residentially?

Ryan:

That's commercially. But video surveillance and burglar alarms are both residential and commercial.

Ron:

HOkay.

Ryan:

But access control is almost exclusively in a commercial setting.

Ron:

HSo now I want to look at the service and maintenance plans. Approximately of all the installations you do, what would you say? What percentage sign up for some plan or do you even have a $0 plan?

Ryan:

No, we don't have a $0 plan, but I actually liked that strategy too. I might steal that now that you mentioned it.

Ron:

HIt sets the benchmark for service hours, phone calls, weekend rates, like it helps you define. The customer's acknowledging they know what they're going to incur if they have that Saturday night emergency.

Ryan:

It helps set your expectations up front, which is nice for you. And that might save a few headaches, honestly, if we did something like that.

Ron:

HYou can say it happened here on Automation Unplugged.

Ryan:

But our conversion rate, a lot of them I'd say on it's maybe 15 percent of our customers. That's a rough number that actually sign up for a service plan. Now we have different level service plans that they can sign up for. For instance, on our surveillance plans, we have quarterly, quarterly maintenance and annual maintenance on those plans. So depending on what they want, and we charge a different rate, we charge by the camera. So, if they have a 10 camera job, it's more expensive than if they have a five camera job. On our burglar alarm plans, we have three different levels that we tier out depending on what the customer is actually looking for. We have a gold, a silver and a platinum plan, silver, gold, and platinum, and they all include different features. They all include annual cleaning. So if, smoke detectors, motion detectors, cleaning those things out, and they include testing of the systems. Some of them include discounts on parts. Some of them include what we call our cellular communicator upgrades, because I don't know if a lot of people listening to this are familiar with the 2G and 3G sunsets, but in the burglar alarm industry that gets hit really hard. And so on our plan and level plans, we include cellular communicators in that plan. So when the LTE network goes away, they're covered. So there's different levels that we have on it. And then, on the AV side, we have different level plans as well. That gives maybe discounted hourly rates. If they subscribe to a monthly plan, it gives them the ability to call us or message our team after hours. We love what Control4, what Parasol, are doing. But for our business, we really want to keep it in house and that's what separates us out, I think, from a lot of people is that when someone has an issue after hours, they can ping me, they can ping our project manager, they can ping our technicians. That is what they're paying for and that's the type of service we want to provide. Now, I might change my tone to that if we all of a sudden grow. Tremendously. And we might not be able to handle that, but right now, that is the level of service that we want to provide. And that's what we think separates us out from a lot of our competition in St. Louis is that we do give them the ability to do that and that we're not looking to move towards one of those other platforms.

Ron:

HI'll close on this topic regarding recurring. I heard recently at a conference, as recently in the last 30 days, I was at a conference. That integrators, and I'm speaking of purely the AV and automation, and I'll speak more specifically the residential AV and automation integration business, should focus less on recurring because they're actually not going to build enough pipeline of recurring contracts for it to ultimately matter as it relates to the value of their business. I think your previous point stands that recurring revenue is great to have, particularly in adding stability to a business. I think no one could argue that that's just true. But in terms of valuations, I mean, how do you think about what your business is worth? Do you grow recurring through that lens? Because one day that that would matter.

Ryan:

I think it's important because if you have a customer under contract, I think that's the key word is they have to be under contract that adds value. I think if you have customers that aren't under contract, I don't know if there's much value there because they could cancel at any point. So on the AV side to grow recurring, I think it is great for a rainy day. I think it's great to add to your bottom line, to increase your revenue for not doing a whole lot. I don't know if that necessarily adds any value to your business. Now, what it does add is it adds customer satisfaction. It adds happy customers, when people have service contracts, they seem to be happier because they know if there's an issue, they're covered. So it's always the people that are frustrated if something goes wrong, and I never tell anyone that something's going to be perfect because it just, we all know technology, something might need to be rebooted or, or whatever it is. It might be an easy fix, but it's the person who doesn't have a contract that has to pay to have someone out is always more frustrated than someone who does have a service contract. So I think it helps with customer attrition because it keeps people happy. It helps with referrals. It lets them know that they have an issue, they're going to be handled. And I think that's all people want. So when they're spending a lot of money, they know that they have some sort of service plan in place to help them when times are, to help them when they have an issue.

Ron:

HBrilliant. I want to close on that, Ryan. Ryan, it's been awesome having you on Automation Unplugged. For those that are listening or watching, and they want to get in touch with you directly?

Ryan:

Yeah, I'd say they can just shoot me an email, my email address, it's R Cohen, R C O H E N. Well, there you go. It's at the bottom of the screen.

Ron:

HAllison already had it loaded in here for me. So I just put it up on the screen.

Ryan:

It's R Cohen at westcosecurity.com, and they can also call my office, the number for that right there. That's 636 519 0022. And just ask for me and I'm happy to discuss. And, I always think it's great to talk to people in the industry to learn more about their business and see how we can help each other.

Ron:

HAwesome. And then I'll, I'll just put up on, for those that are also watching, why don't you take them through your website URL, if they want to come check out that cool website, we were just at.

Ryan:

Westcosecurity.com, and you guys can look at the wonderful website that we just had redone. Launched again yesterday by the One Firefly team. Awesome.

Ron:

HRyan, it's been a blast having you on Automation Unplugged and I appreciate you, you coming on and sharing all your thoughts and wisdom with our audience.

Ryan:

Well, thank you for having me. It was a pleasure and I really enjoyed being on here.

Ron Callis is the CEO of One Firefly, LLC, a digital marketing agency based out of South Florida and creator of Automation Unplugged. Founded in 2007, One Firefly has quickly became the leading marketing firm specializing in the integrated technology and security space. The One Firefly team work hard to create innovative solutions to help Integrators boost their online presence, such as the elite website solution, Mercury Pro.

Resources and links from the interview:

• Westco Security & Technology Systems' LinkedIn Profile page
• Ryan Cohen LinkedIn Profile page
li>Westco Security & Technology Systems webpage