Start a Security Company? Read This!
To start a security company could sometimes be exciting, and starting your own security business could also be challenging!
Note; the term ‘security guard’ in this blog does not only mean a ‘ security officer’ it also includes bodyguard/personnel protection, mobile patrol, etc.
The purpose of this blog today is to help you with an ‘insider information’ that I have gained; as someone who has worked as a security guard, progressed into a leadership role in the security industry, wrote an award-nominated security book (Security Adventure Service) and now running my own security guard company.
I hope the information I will share will help shed some light into an industry that you are thinking of joining. This content is to help you make a better-informed decision; whether to start a security company or do something else.
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Types Of Business Owner
There are quite a lot of reasons why people start a security company. There are also a few categories of “ security guards business owners”, and below are 3 I will focus on:
- Frustrated Folks; these individuals decided to start a security hire business out of frustrations; here are some sub-category of frustrations that might have pushed them;
- tired of working for other people
- tired of being bossed around as an employee, now they want to be their own boss/employer
- they think there is a lot of money to be made once you start a security company
- they think their employer is earning bigger money and they are only earning peanut so, why not own the boat and the river instead of just being a fisherman
- Promised folks; these individuals may have little or no experience in the field of security, but they are sure to succeed in it, and here are some of the reasons why thy join the security guard hire industry and why they will excel;
- they have inside knowledge of soon to be security tender/contract so they are 100% sure of getting the contract if they start their own security guard business
- they say ‘ it is who you know and not what you know,’ that’s true. Some people only start their own security guard business because a friend or relative is working in another organization has promised to give them a contract
- they have a community or social network that are willing to give them security contracts, the moment they start their business
- The Business folks; these individuals may or may not necessarily have a security guard or security business experience, but they have done proper research and have also got vast sums of money to invest into the security business:
- This particular group often succeed because not only have they planned before entering the security industry, they are willing to start big and delve into a certain niche that will fetch them money
- They often have the best professionals to steer their company to succeed because of their deep cash/capital reserve
Who Not To Be?
As I said earlier, my focus will only be on the above 3x categories of security business owners. Permit me to say 85% of people who own security guard companies fall into the above 3x categories.
From the above 3x categories, the one that is most likely to fail within the first 18 months is; number (1). The reason why, a good number of them join out of emotional-impulse or desperation. They often don’t use their minds/head to think critically if this business is the right one for them, though there are people in category 1 that succeed; only after they have learned how to be RESILIENT, and it is likely to take them much longer to succeed then folks in category 2 & 3.
Why Do Security Guard Businesses Fail?
It is very easy for any individual to start a security company, though there are quite a few hurdles to go through before you secure a security business, master or agent license from various state regulatory bodies in Australia. Such as, whether they have been bankrupt in the past or any recent criminal history.
Some important point to note, why new security businesses fail :
- lack of understanding and sufficient groundwork by the owner of the business, before venturing into the business
- very few opening for new security companies to thrive, due to over-saturated market
- competing with other security business owners, who don’t operate by the rules or within the confines of the law. So, they are charging clients way below their employee’s wage
- sharp practices by the owner of the business; wanting to get rich by all means. If it means stealing their employee wages until they get caught and kicked out of Business
Are You Ready?
If you have read a lot of my security industry content, I am someone who always encourages people to go for what they believe in and try to be there best.
But recently in Dec 2019, a client contacted me through our Security Consultancy Service. He wanted us to assist him set-up a new security business as we have done with other clients. My task is to deliver on all our client’s request. But this particular client; I will call him ‘Jake’ (not real name).
He asked me this important question before I book a face to face appointment with him. The question was, ‘ please can you tell me, if I can make money when I start a security business, and how soon. Or is it a saturated market where you only have to succeed by feeding on the bottom of the barrel?’
I said to him ‘ none of my clients has asked me this honest question, and I have never bothered to answer such a question that was never asked, even though I know the answer.’
So I told him the truth:
- ‘ The security Industry is oversaturated, and your likelihood of success without knowing anyone is; just operate in a dodgy way, undercharging clients which I don’t do or encourage.’
- I also told him his other options are ‘ be patient and remain in the industry and within 3-5 years you are likely to succeed.
- Or have sufficient money to invest into your new security business, for SEO/Marketing, Google adds and to pay Tender writers and go for as many tenders as possible within a calendar year (you are looking at investing a minimum of around $45-85,000 a year)
Even though revealing the truth to my client cost us the job; I felt pleased that someone wise, asked this important question. The client never went ahead to start a security business, I lost money for my honesty, but my client saved his money, time and possibly will focus on other profitable stuff.
So, as you read this piece, my aim is not to discourage you; but to suggest to you that Security Guards Hire Business may not be what you think it is. A lot of people in the industry may not tell you the truth because, they are afraid to hurt your feelings, or you might assume they don’t want you to be a competitor!
1 Example of Our Client Security Company We Helped Setup
|Business Name||Set Up Process|
|Calm Safe Security||Set Up Business, SEO/Content, Security Business License Application, Uniforms|
Over Regulated Industry With Little Oversight
Here are some reasons why; before you decide to deep-in or flight:
Over Regulated Industry: You may think to have so many governing and regulatory bodies is good for the Industry (such as Fair Works, Labour Hire, Portable Long Service Leave Authority, ATO, Police), in a way they are good. They are mainly good to keep law-abiding security company operators in check and raise revenue for Government. But the sad reality is; they hardly do enough to check the excesses of so many dodgy security guard companies who are rotting the system.
- In other words, if you are an honest and transparent person; your chances of succeeding in the Security Guard Hire Business are less than 25%.
- You will also be dealing with clients (including local and state Government) who will only go for the lowest price/bid even if it means the prices are illegal, or below their Employee wage.
- You will be dealing with a lot of individuals, who don’t have the Security Business, Master, Agent License; but they are sub-contractors to Major Security Companies, and they are supplying over 50 guards a month.
- You will be dealing with so many individuals that the ATO, Licensing department have banned from running a business, still owning a business through someone’s name and repeating the same illegal practice that got them banned earlier.
- Cash in hand, you will be dealing with so many companies receiving cash-payment from clients and then the employer underpays his guard’s also, using cash-payments. They can charge the client less because they don’t pay GST, Superannuation or Employee tax, so it is impossible to compete with such individuals/businesses.
Some may say it happens in other industries too, but don’t forget this is a whole different industry “Security Industry”. Don’t forget some of these illegal operators often have the opportunities to provide security guards in sensitive sites and infrastructure both Government and Private sector.
So, if the dodgy security company is tasked with securing sensitive sites or security contracts. And these same companies are operating illegally, or operating outside the law; that implies, the possibility of deploying unqualified guards are higher, and the chances of them compromising the security of that site/infrastructure to a third party to penetrate are even greater. Where There is no Integrity, There is no Real Security!
Please See Other Articles:
- Standard Operating Procedures For Security Companies
- Improve Your Security Business
- Tender Writing Service For Security Companies
NOTE: If you are in Victoria and you have got a Security Contract/Retainer that has bee made available to you and you don’t have a security company/license. Send us an email and will be willing to take on the Contract/Retainer, and we will split the Margin 50/50 throughout the Contract/Retainer. Take note we pay all our guard’s award Wage. We may consider Interstate opportunities and every agreement will be on paper and signed by both parties.
Contact us : email@example.com or 1300 044 989
Written by: Job Moses