Security Business Overview
A security business provides professional protective services through trained personnel who prevent theft, vandalism, and other criminal activities. These businesses serve a wide range of clients, from retail stores and office complexes to residential communities and special events.
These businesses employ trained security personnel who monitor premises, prevent criminal activity, and respond to security incidents. Successful businesses maintain detailed operations protocols, thorough employee screening processes, and proper licensing and insurance coverage to meet client requirements and minimize liability risks.
Related: Checklist To Start A Business
How Do Security Businesses Make Money?
Security guard companies generate revenue by providing various protective services to businesses, organizations, and individuals. Their income comes from billing clients for the hours their security personnel work.
These are the main ways security businesses can generate income:
- Unarmed Guard Services: This represents the largest source of revenue for most security companies because many locations need basic security presence without weapons. Retail stores, office buildings, and schools typically contract unarmed guards for general security and access control.
- Armed Guard Services: Guards with firearms provide heightened security for banks, government facilities, and high-value locations. These services command higher rates due to additional training and licensing requirements.
- Event Security: Companies staff temporary security teams for concerts, sporting events, conventions, and private gatherings. Billing includes setup time, event duration, and breakdown periods.
- Mobile Patrol: Security personnel in marked vehicles conduct scheduled property checks throughout their shifts. Companies charge flat rates or hourly fees for regular drive-by surveillance of multiple properties.
- Investigation Services: Security firms conduct background checks, surveillance, and loss prevention investigations. They bill hourly rates or fixed project fees for these specialized services.
- Armored Transport: Companies transport cash, valuables, and sensitive items in specially equipped vehicles. Revenue comes from per-trip charges based on distance and value of items transported.
- Security Consulting: Firms assess client security needs and recommend appropriate staffing levels and protection measures.
Industry Statistics
Security businesses fall under NAICS code 561612 – Security Guards and Patrol Services. Here are statistics that highlight different aspects of the industry.
Security Business Industry Size & Growth: The security services industry generated $47.7 billion in revenue last year. Over the past five years, revenue declined at an average rate of 1.0% annually. Growth projections show an upward trend, supported by businesses returning to office spaces and increased demand for security personnel. (IBISWorld)
Number of Security Businesses: There are 11,317 security businesses operating in the market. The top companies include Allied Universal Security Services LLC, with about 13.9% market share and revenues of $6.6 billion; Securitas AB, with an 11.3% market share and revenues of $5.4 billion; and Contemporary Services Corporation, with a 6.8% market share and revenues of $3.2 billion. (IBISWorld)
Security Business Profit Margin: Security companies, on average, maintain net profit margins of 6.4%.
Startup Stories
Also See: Ideas for Naming a Security Business
Costs To Start a Security Business
Starting a security business typically costs between $10,000 and $100,000. These costs vary based on the size of the operation and the types of services offered.
There are many expenses when starting a security business. Here are some of the main costs to plan for:
Insurance and Bonding: Security businesses need several types of insurance coverage, including general liability, professional liability, and workers’ compensation. Guard companies also require surety bonds. These combined costs often range from $5,000 to $15,000 annually.
Training and Licensing: Security guard training programs, firearms certifications (if offering armed services), and business licensing must be obtained before operations can begin. The cost for training and certifying an initial team of guards ranges from $2,000 to $8,000.
Equipment and Uniforms: Security companies need to outfit their guards with uniforms, radios, flashlights, and other basic equipment. For armed services, weapons and holsters are required. Initial equipment costs for a small team typically run between $3,000 and $12,000.
Vehicles: If offering mobile patrol services, companies need marked security vehicles equipped with emergency lights and communication systems. Each patrol vehicle costs between $25,000 and $45,000 when properly outfitted.
Office Setup: A security business needs a base of operations with dispatch equipment, scheduling software, and basic office furnishings. Setting up an office space typically costs between $5,000 and $15,000.
These estimates provide a general idea of startup costs, but actual expenses will vary.
Resources:
International Foundation for Protection Officers
United Federation of Special Police and Security Officers, Inc.
United Government Security Officers of America