Starting a Security Company? Read This!

 

Starting a security company can sometimes be exciting, but 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 article is to help you gain ‘insider information’ that I have attained in my experience. As someone who has worked as a security guard, has progressed into a leadership role in the security industry, has written an award-nominated security book (Security Adventure Service), and is now running his own security guard company.

I hope the information I will share will shed some light on 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 to do something else entirely.

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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 guard business owners’, and below are three of which I will focus on:

  1. Frustrated Folks: These individuals decide to start a security hire business out of frustration. Here are some sub-categories of frustrations that might have pushed them;
  • tired of working for other people
  • tired of being bossed around as an employee and 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 peanuts so why not own the boat and the river instead of just being a fisherman
  1. 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 they join the security guard hire industry and why they will excel;
  • they have insider 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,’ and that’s true. Some people only start their own security guard business because a friend or relative who 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
  1. 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 cash 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 niche market that will fetch them big and quick 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 three categories of security business owners. Permit me to say 85% of people who own security guard companies fall into the above three categories.

From the above three categories, the one that is most likely to fail within the first 18 months is number (1). The reason is a good number of them join out of emotional-impulse or desperation. They often don’t use their heads to think critically about if this business is the right one for them, though there are people in category (1) that will succeed only after they have learned how to be RESILIENT. It is likely to take them much longer to succeed then folks in categories (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 points to note about why new security businesses fail:

  1. Lack of understanding and sufficient groundwork by the owner of the business before venturing into the business
  2. Very few opening for new security companies to thrive, due to the over-saturated market
  3. 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
  4. 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 their best.

However, recently in December 2019, a client contacted me through our Security Consultancy Service. He wanted us to assist him in setting up a new security business as we have done with other clients. My task is to deliver on all our client’s requests, until this particular client; I will call him ‘Jake’ (not real name).

He asked me this important question before I booked a face-to-face appointment with him. The question was, ‘Can you please tell me if I can make money when I start a security business and how soon can I make it. Or is it a saturated market where you can only succeed by feeding on the bottom of the barrel?’

I said to him, ‘None of my clients have 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:

  1. The security industry is oversaturated, and your success, without operating in a dodgy way, will be difficult. And is something that I do not encourage.
  2. I also told him his options are to be patient, remain in the industry, and that within 3-5 years he would be likely to succeed.
  3. Lastly, to have sufficient money to invest into your new security business for SEO/Marketing and Google Ads, 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 per year).

Even though revealing the truth to my client cost us the job, I felt pleased that someone wise had asked this important question. The client never went ahead to start a security business and I lost money for my honesty, but my client saved his money, time and will potentially focus on other more profitable stuff.

So, as you read this piece, my aim is not to discourage you, but to suggest to you that a 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 could assume they don’t want you to be a competitor!

Cheap Security Patrol Software, Australia cheap GPS GEOFENCING software

 

1. Example of a Client Security Company that we Helped to Setup

Business Name Set-Up Process
Calm Safe Security

www.calmsafesecurity.com.au

Set-Up Business, SEO/Content, Security Business License Application, Uniforms

 

Over Regulated Industry With Little Oversight

Read this before you decide to go ahead!

Over Regulated Industry: You may think to have so many governing and regulatory bodies is good for the industry (such as Fair Work, Labour Hire, Portable Long Service Leave Authority, ATO, Police) and yes, in a way they are good. They are mainly good to keep law-abiding security company operators in check and raise revenue for the 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 a Security Business, Master, Agent License, but they are still 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 and Licensing department has banned from running a business who still own a business through someone else’s name and who  repeat 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 goes on to underpay his guard 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.
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Other Industries

Some may say it happens in other industries too but don’t forget this is a whole different industry. Don’t forget some of these illegal operators often have the opportunities to provide security guards in sensitive sites and infrastructure within both Government and private sectors.

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 is 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!

 

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Security Business For Sale!!!
Security Concepts Services Pty Ltd is currently in the Market for Sale.

Please email us if you are interested in buying the security, cleaning the side of the business, with 1x contract and multiple ongoing clients.

info@securityconcepts.com.au

 Contact us at info@securityconcepts.com.au or on 1300 044 989

Written by Job Moses