The Silvertrac Extra
The Essentials of a Security Company Business Plan
Starting a security business requires a well-thought-out business plan. Without a proper plan, it is impossible to build and stabilize an organization, let alone create room for growth and expansion. If you are passionate about private security and thinking about building a successful organization, here are a few key areas that are essential when creating a security company business plan.
How to Start a Security Company?
The answer to how to start a private security company begins with understanding what a business plan is and why it’s necessary. Your business plan is often the same reason you started your security company. You want to provide security to a certain scale and vendors. Once you hone in on who and why that is, you will have the first steps of your plan.
Having a plan is necessary in today’s security industry where the economy fluctuates, and business seems to come and go daily. By making a private security business plan, you can get ahead of the game when it comes to the goals of your company and what pitfalls you may experience. Start by asking yourself these questions.
What is your focus?
- There are many different types of security companies. Whether you want to supply security for events, corporations, or some other type of business, you’ll have to know what that focus entails when it comes to planning everything from cost, training, structure, and even scheduling.
What security services will you provide?
- There are a handful of distinct types of security. Armed or unarmed, event or corporate, global, or local, and what connections they have with the police and the business they serve.
What is your geographical reach?
- You can choose to focus on one business type, one city or state, or go global and market yourself as a security company that goes beyond borders.
What types of properties/organizations will you provide security for?
- There’s plenty of different markets for security companies. Corporations, government agencies, hospitals, churches, schools, retail stores, banks, and so many more.
What is the ideal size of contract for your business?
- It is all too important to find the right amount of business for your business. You must find enough contracts to make sure you’re making a profit but also make sure you aren’t over-extending our business. It is a skill to find the right bid for security contracts for your company without underfunding yourself. The more strain you put on your company by overextending or underfunding yourself the more of a chance the quality of security you provide will go down.
Without properly defining these factors, it is difficult for a security company to gain momentum and build a reputation. You will be targeting every business in every sector, failing to provide quality services. A well-defined private security business plan offers a more focused approach that will help you provide top-quality services in your area of expertise.
Remember, you can always start a business in the security industry, but you can’t always save it.
Developing a Security Company Business Plan
A solid business plan is a great idea no matter what type of business you operate. In the world of security, it is doubly important. It allows you to understand how contracts will affect you and your company from the ground up and prepare for issues that could cause other businesses severe trouble. Something that should be avoided in this time of economic fluctuation. No matter if it’s strategy, finances, scale, or any other aspect; each of them will uncover valuable details on what you want your business to be.
Executive Summaries are key for getting to the minute details of your business without having to skim over a large document. Any Executive Summary should have the key points of a report and the findings not only in an easy-to-read fashion, but also stripped of any flowery language. The whole goal of this is to get the most notable information of a document or report across in the shortest amount of time.
This is who your company is. Ownership, management, history, goals, any aspects that differentiate you from other companies, and anything else that could be interesting to investors or customers. This is an elongated elevator pitch, or in a way a resume for your business. If it is a selling point of your company, then put it here.
Licensing & General Liability
Before much can happen with your security company, you will need to obtain a Private Patrol Operators (PPO) License, which is regulated by state-run agencies like the Bureau of Security & Investigative Services (BSIS) in California. A PPO license grants the license holder the ability to hire employees that function as security personnel. But to be approved for a PPO security business license, you must secure general liability insurance.
Getting a PPO license can take some time. When planning out your business’s roadmap, make sure to take these time constraints into consideration, as it will be a key factor for when you can officially launch your security business.
Note: Each state has different rules and regulations pertaining to operating a security company. We are using California policy as an example since they continue to have the strictest employer laws, but and are often responsible for progressing industry standards around the country.
Industry, Customer and Competitive Analysis
One big way to understand the challenges your company may face is to learn from your competitors. Seeing the needs of the area in which you want to do business and see how your top competitors are approaching those needs is a terrific way to see if there are any niches you can fit your company in. This makes any sort of industry analysis incredibly valuable. You don’t wait to find yourself in a market full of competitors without your company having any sort of edge on them.
Looking at the customers in your area is good for the same reason. Find what consumers need and are willing to pay to solve that need. By finding out what the market looks like and what the consumers of that market are like you can find out what your company can specialize in and where it is best to focus your marketing on.
This is where you develop a deeper understanding of your company's goals and strategy. Consider it as what your company is looking to do. This should be easy to complete once you have the information from the steps above
As well as your goals, there should be a brief outline of the timeframe in which you would want those goals to be achieved and a basic strategy in which your company will approach them. This is an important document for your investors and any potential business contributors, as they will get a sense of the ideals and future your company has in mind.
Employee Structure & Management Plan
Building a sound security team structure within your business will help maintain internal order and high customer service standards. Not to mention, it will be much easier to grow your team and business if you already have a strong structure in place when you are ready to expand.
The first step is building a strong security guard management team. As the owner of a small, new security company, it can be challenging to wear the different hats needed to run your business. Even starting out with just one supervisor, it will alleviate many of the managerial duties, freeing you to focus on other parts of the business.
A good supervisor should have a strong background in 3 different areas:
- Organizing, directing, and managing security officers
- Motivate, train, and coach security officers
- Time management
With these areas covered, a supervisor can lead the charge on building and training a security force that is disciplined, motivated and continually improving.
As the team grows, the company will be comprised of like-minded employees who hold the same values and ethics that will be reflected in their work. It will increase employee retention and satisfaction and continually improve the quality of service the company provides.
Knowing what your finances will look like is a fantastic way to prepare for expansion and potential costs. Having a plan financially will allow for out-of-the-blue costs to not be as overwhelming on you or the company.
Consider having a five-year plan, and a realistic one at that. Also, make a spreadsheet for your cash flow, balances, and income down to a monthly increment. This will all allow you to see how your business can grow and perform.
Sales & Marketing Strategies
Implementing a sales and marketing plan upfront will give your security business the initial jump-start it needs, rather than figuring it out as you go. It is important to make these strategies scalable, so you aren’t losing valuable resources like time and money.
As mentioned earlier, when building out your security company business plan, you must determine the scope and geographical reach of your services. Once this is completed, you can begin to strategize the best sales and marketing tactics to answer questions like:
- What are the marketing strengths and weaknesses of your top competitors in the region?
- Where do you find leads in the region you are targeting?
- Do you have a strong referral base?
- How do your sales representatives play to the needs of your target audience and the weaknesses of your competitors?
- What is the most effective outreach strategy for your target audience?
- What online platforms should we be using to generate awareness of your services?
Once you can start to identify the answers to these questions, you can start to build a security marketing strategy that will complement the efforts of the sales team and drive brand awareness and lead generation. Again, building a repeatable & scalable plan is important so that you aren’t wasting resources upfront and can grow your efforts as the business allows for it.