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You might consider targeting a niche market by specializing in a certain aspect of your industry, such as public protection security services or private patrol officers for office buildings.
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Written by: Carolyn Young
Carolyn Young has over 25 years of experience in business in various roles, including bank management, marketing management, and business education.
Published on June 3, 2022
Updated on December 25, 2022
Investment range
$13,050 - $25,600
Revenue potential
$208,000 - $624,000 p.a.
Time to build
3-6 months
Profit potential
$42,000 - $125,000 p.a.
Industry trend
Growing
Commitment
Full-time
Strong security is absolutely crucial to the success of countless businesses and the safety of family homes. The US security services industry expanded more than 40% in the past decade and that growth is expected to continue, which means now is a great time to get in on the action with your own security guard business.
You’d be protecting property — and potentially people’s lives — while making a good living. But before you start, there’s much to learn about starting a business. Luckily, this step-by-step guide has you covered with all the information you need to launch a successful security guard business.
Starting a security guard business has pros and cons to consider before deciding if it’s right for you.
Trends in the security guard industry include:
Challenges in the security guard industry include:
Startup costs for a security guard business range from $13,000 to $25,000. Costs include a website, uniforms and firearms if necessary, and a labor and operating budget. The higher-end also includes office space, as some states require security guard companies to have offices.
If you need security guard training or firearms training, you should be able to find a training school near you. Licensing is required for security guard companies per each state’s private security services act and each state has its own education and experience requirements. Check with your state to see what is needed.
You’ll need a handful of items to successfully launch your security guard business, including:
Start-up Costs | Ballpark Range | Average |
---|---|---|
Setting up a business name and corporation | $150 - $200 | $175 |
Business licenses and permits | $100 - $300 | $200 |
Insurance | $100-$300 | $200 |
Business cards and brochures | $200 - $300 | $250 |
Website setup | $1,000 - $3,000 | $2,000 |
Office space | $0 - $2,500 | $1,250 |
Uniforms and firearms | $1,000 - $3,000 | $2,000 |
Security guard licensing | $500 - $1,000 | $750 |
Labor and operating budget | $10,000 - $15,000 | $12,500 |
Total | $13,050 - $25,600 | $19,325 |
The average rate for a security guard company is $40 per hour per guard. You’ll pay your employees about $15 to $20 per hour, and you’ll also have the costs of rent, overhead, and insurance, so your profit margin should be about 20%.
In your first year or two, you might get 100 guard hours of work per week, bringing in $208,000 in annual revenue. This would mean $42,000 in profit, assuming that 20% margin. As your business gains traction you might triple those numbers. With annual revenue of $624,000, you’d make an outstanding profit of $125,000.
There are a few barriers to entry for a security guard business. Your biggest challenges will be:
Now that you know what’s involved in starting a security guard business, it’s a good idea to hone your concept in preparation to enter a competitive market.
Research security guard businesses in your area and online to examine their services, price points, and customer reviews. You’re looking for a market gap to fill. For instance, maybe the local market is missing a security agency that offers personal security guard services, aka bodyguards, or armed security guards.
You might consider targeting a niche market by specializing in a certain aspect of your industry, such as public protection security services or private patrol officers for office buildings.
This could jumpstart your word-of-mouth marketing and attract clients right away.
You can decide whether you want to have armed or unarmed security services, and if you want to specialize in business security or personal security. Many security guard businesses also have private investigators to offer additional services.
Instead of charging hourly, you might instead want to enter into security contracts with your clients and have them pay a set monthly fee.
The average rate charged by security guard companies is $40 per hour. Your profit margin after labor, rent, and overhead should be about 20%.
Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.
Your target market will most likely be businesses. You can connect with business owners on LinkedIn or find them on Google or Yelp and call them directly.
In the early stages, you may want to run your business from home to keep costs low. But as your business grows, you’ll likely need to hire workers for various roles and may need to rent out an office, or you may be required by your state to have one. You can find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.
When choosing a commercial space, you may want to follow these rules of thumb:
Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.
Here are some ideas for brainstorming your business name:
Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these.
Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that sets your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.
Every business needs a plan. This will function as a guidebook to take your startup through the launch process and maintain focus on your key goals. A business plan also enables potential partners and investors to better understand your company and its vision:
If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist at Fiverr to create a top-notch business plan for you.
Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.
Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business!
Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you’re planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to security guard businesses.
If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state.
Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your security guard business will shape your taxes, personal liability, and business registration requirements, so choose wisely.
Here are the main options:
We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using ZenBusiness’s online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have.
The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN.
Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.
The IRS website also offers a tax-payers checklist, and taxes can be filed online.
It is important to consult an accountant or other professional to help you with your taxes to ensure you’re completing them correctly.
Securing financing is your next step and there are plenty of ways to raise capital:
Bank and SBA loans are probably the best option, other than friends and family, for funding a security guard business.
Starting a security guard business requires obtaining a number of licenses and permits from local, state, and federal governments.
Each state has their own private security services act that sets out the licensing rules for both security guards and security guard businesses. Check with your state for requirements.
Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits.
You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more.
You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.
This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties.
If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.
Before you start making money, you’ll need a place to keep it, and that requires opening a bank account.
Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your security guard business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.
Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account.
Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.
Here are some types of insurance to consider:
As opening day nears, prepare for launch by reviewing and improving some key elements of your business.
Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.
You may want to use industry-specific software, such as Guards Pro, GuardMetrics, or Officer Reports, to manage your reporting, schedule, timesheets, and billing.
Some of your business will come from the casual online visitors, but you should still invest in digital marketing! Getting the word out is especially important for new businesses, as it’ll boost customer and brand awareness.
Once your website is up and running, link it to your social media accounts and vice versa. Social media is a great tool for promoting your business because you can create engaging posts that advertise your products:
Take advantage of your website, social media presence and real-life activities to increase awareness of your offerings and build your brand. Some suggestions include:
Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism. They are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google.
You can create your own website using services like WordPress, Wix, or Squarespace. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.
Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your security guard business meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire.
Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your security guard business could be:
You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a security guard business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in security guard businesses for years and can offer invaluable insight and industry connections.
The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in security guards. You’ll probably generate new customers or find companies with which you could establish a partnership.
If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a security guard business include:
At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need.
Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent.
Our need for security may be unfortunate, but it’s a fact of modern life — and a legitimate business opportunity. The industry is seeing steady growth, so if you have a passion for protection, you could start a security guard business and make a good living while providing an essential service.
You’ve learned what you need to know about the business now, so it’s time to get out there and start protecting people and businesses — and securing your future.
You can start a security guard business from home for about $13,000 if your state doesn’t require that you have an office. Costs include uniforms, firearms if necessary, and a labor and operating budget.
Security guard services can be very profitable. The key is to provide reliable security services and great customer service, and you can be successful.
Each state has its own private security services act that sets out the licensing rules for both security guards and security guard businesses. You may also need other business licenses and permits at the state and local levels. Check with your local governments for requirements or visit MyCorporation’s Business License Compliance page.
The average rate for a security guard company is $40 per hour per guard. You’ll pay your security guard employees about $15 to $20 per hour, and you’ll also have the costs of rent, overhead, and insurance, so your profit margin should be about 20%.
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