Last Updated on June 5, 2020
If you’ve ever worked as a security guard, you already have the foundation for a business you can build. Starting a security guard business can help you to launch a career that you’re in charge of, and it can put you in the position to employ many others, too. While the security guard industry isn’t without risk, it can be financially rewarding and is often a source of stable, recurring jobs.
Security guard businesses contract with clients in need of their services. There are plenty of different needs for security guards, and these businesses may choose to specialize in one or more areas like site security, retail security, loss prevention, event security, gate guarding, and bodyguarding.
A security guard business offers a client convenience and peace of mind. By providing guards who are already trained, experienced, and knowledgeable, these businesses take some responsibility off of the client. Security guards may be armed or unarmed, depending on the security guard business and the client’s requirements, and services can generally be tailored to the client’s specific needs. Some security contracts are ongoing, while others may be short-term contracts designed to accommodate an event or change that needs additional coverage.
According to IBIS World, the security services industry experienced 2.7% growth from 2014 to 2019. That growth was partially due to the increased popularity of security services in both corporate and government settings. That growth is predicted to continue from 2019 to 2024, driven by increased corporate profits and increased construction in the residential, public, and commercial industries. More security will be needed to guard these projects, and increased industrial and manufacturing activity will also require more security.
As of 2019, the security services industry was a $39 billion industry. A total of 15,280 businesses employed 853,682 people. Certain companies, including G4S PLC, Allied Universal, Securitas AB, and The Brink’s Company, hold significant shares of the market, but there are still plenty of opportunities for smaller, privately-owned security guard businesses.
The security guard industry is evolving as new trends and technology emerge. According to Trackforce Valiant, evolving technology gives security guard businesses many ways to advance and enhance their services. While smaller businesses can’t adopt all of the cutting-edge technology that’s available, drones, facial recognition, and apps that support tasks like incident reporting are all potential considerations.
High turnover rates and low degrees of employee retention were an issue for security guard businesses in 2019, and it’s likely that they’ll continue to be an issue in 2020 and beyond. Low unemployment rates and guards being able to get competitive wages at employers like Home Depot and Walmart has made it difficult for smaller businesses to attract and retain quality talent. To address this issue, businesses can focus on improving their profit margins so that they’re able to offer higher wages. Focusing on benefits like health savings accounts, raises, and promotions can also help to improve employee retention.
Clients have also begun to expect more from the security guard businesses that they work with. Clients are increasingly requiring that guards are trained and certified, and that they’re also aware of the client’s conduct expectations. This means that security guard businesses need to stay on top of certification and training requirements, carefully tracking certification expiration dates and ensuring that all guards keep their training and certifications up-to-date.
The market for a security guard business will depend on the business’ specialization. Some businesses focus on specific industries, like construction and renovation, and will market to builders and property owners who are planning construction projects. Other businesses may focus on providing security to retail spaces, and they’ll market to the business owners of retail operations.
Skills, experience, and education useful in running a security guard business
Starting a security guard business doesn’t require a business degree, but certain skills and experiences are valuable in both starting and running this business.
Security guard experience. A business owner who has previously worked as a security guard will have an understanding of the challenges of the industry. This experience may also result in connections and a network that can be helpful when starting a new business.
Physical fitness. Working as a security guard requires spending plenty of time on your feet. This can be a demanding job, so physical fitness is an advantage.
Attention to detail and awareness. A business owner will need to take care of details, like assignments and invoicing, daily. When on the job, attention to detail and awareness are important qualities for any security guard.
Security guard training and license. Some states require security guards to receive formal training and be licensed. Colleges, career centers, and state-approved programs generally offer this training. Most programs require that applicants have a clean criminal record.
Firearms training and license. If a security guard will be armed, then they will need to take a firearms training course and become licensed. Requirements vary from state to state.
Ability to stay calm under pressure. Security guards may encounter tense situations and will need to be able to stay calm and think clearly under pressure.
Management experience. Previous experience in hiring, training, and managing staff will be helpful when building a security guard business and expanding with new employees.
Costs to Start a Security Guard Business
It will cost a minimum of $10,000 to start a small security guard business, assuming that the business doesn’t need to purchase patrol vehicles. If vehicles are needed, plan to have much larger startup costs.
Common startup costs for a security guard business:
- Equipment like radios and flashlights
- Uniforms and gear
- Office furniture and supplies
- Website development
- Patrol vehicles
Steps to Starting a Security Guard Business
Step 1. Write your Business Plan
After coming up with the idea, the next step in starting your business should be to write a clothing line business plan. Not only will a bank require you to have a business plan, but multiple studies have shown that a business plan helps increase the odds of starting a successful business.
Step 2. Form a Business Entity
A business entity refers to how a business is legally organized to operate. There are four primary business entities to choose from which include the sole proprietorship, partnership, corporation and LLC. Each type of entity has its own pros and cons such as liability exposure, costs and administrative requirements.
Related: Comparison of Business Entities
Step 3. Select your Location
While not required to start, an office space can serve as the business’ central hub and helps to create a professional impression. Rental costs will depend on the size and location of the space, as well as what amenities are available.
Related: Choosing a business location
Step 4. Apply for Business Licenses and Permits
Private Security Companies are heavily regulated and will require licensing, typically at both the state and local level. At a minimum, most security businesses will need to complete certification, fingerprinting and some proof of training. For companies offering armed guards, further requirements may apply.
In addition to the licenses and certificates required of the guards themselves, a security guard business will need to obtain certain business licenses and permits. These permits and licenses can vary based on the state and town where the business is located.
Step 5. Find Financing
Coming up with a good business idea and having the skills to run it are one thing, but getting the funding to start a security guard business is another. In order to get a loan, the borrower(s) will need to have good credit and be able invest 15-25% of their money towards the total start-up costs.
Step 6. Get your Marketing Plan in Place
A security business will need to market to not only build up an initial base of clients, but to also bring in new clients and expand the business. Common marketing activities include online advertising, social media marketing, direct mail marketing, and even approaching potential clients directly. Marketing costs will depend on the type and volume of the activity that’s performed.
Step 7. Get Insurance
A security guard business will need several types of insurance for full coverage:
- General liability insurance helps to protect the business if anyone is ever injured as a result of the business’ work.
- Commercial property insurance helps to cover expenses if the business’ equipment is ever lost or damaged in an event like a fire.
- Commercial auto insurance can help to cover expenses that may result if a business vehicle is ever involved in an accident.
- Surety bonding is required by some states to ensure that the business will comply with all state rules and regulations and cover any financial damages caused by the company.
- Worker’s compensation insurance can help to cover expenses like lost wages and medical bills that may result if an employee is ever hurt while working.
The cost of insurance policies will vary and can depend on factors like the value of a business’ equipment and supplies, as well as whether guards are armed or not. To get the most accurate idea of what insurance will cost, request quotes from multiple providers. When comparing the quotes, look beyond how the premiums compare and consider all of the valuables, like coverage limits, exclusions, and deductibles.
Step 8. Hiring Employees
A security guard business will need to hire employees from the start. According to ZipRecruiter, security guards earn an average of $13 per hour, though that pay rate can range from $8.41 to $18.99.
In addition to including employee salaries in the budget, a business will need to account for other expenses, like overtime, paid time off, health insurance contributions, and worker’s comp insurance.
Related: Hiring your first employee
Amazon has several good books for starting a security guard business such as:
- Private Security Business Startup: How to Start, Setup and Run Your Own Private Security Company (Free on Amazon Kindle Unlimited)
- How to Get Clients for Your Private Security Agency
- How to Start a Security Guard Company: Creative Strategies for Getting Your Private Security Agency Up and Running
- How to Manage a Security Guard Company: A Deep Dive into the Strategies of Managing a First-Class Private Security Firm
How much can you potentially make owning a security guard business?
A security guard business’ profits will depend on many factors like the number of years the business has been operating, the number of guards on staff, the business’ rates, and the business’ expenses. According to Thumbtack, security guard rates range from $15 to $25 per hour, with armed guards costing $3 to $5 more per hour. Event security can cost from $15 to $100 per hour. With a full schedule and multiple employees, a business can earn an annual profit of $50,000 and up.
Things to consider before starting a security guard business
Before starting a security guard business, consider the type of security that you want to provide. This is an ideal time to do some market research and identify any unmet need in the local area that your business could fill. It might be tempting to offer many different services to appeal to many different clients, but this strategy can backfire if you’re not truly equipped to fulfill each service type. Instead, focus on one main service and consider expanding into another area once your business is successful.
The nature of a security guard business means that you’ll be dealing with lots of paperwork, permits, and licenses. Be prepared to perform thorough research into your local requirements before starting your business. This industry can be risky, and your business could potentially be sued for damages if an incident involving one of your guards occurs. Be prepared to thoroughly research and evaluate your insurance policies to make sure that you’re fully covered and protected.