Security Companies, Is It Worth Starting Your Own Business

There are thousands of security companies across the UK. Some turning over under £100k a year, and some of the bigger security companies turning over upwards of £10bn. Some security companies run a tight ship from a compliance perspective, and others are operating illegally.

For many security operators, they will have considered the potential of becoming one of those thousands of security companies, and starting their own business. That might be because they’ve always wanted their own business. Or they believe that they can do better than some of the operational security companies that they have worked for. Or maybe they just want more freedom to work the hours that they want. Whatever the reason, it’s not a step to be taken lightly into security company ownership.

In this article we will look at some of the requirements that security companies have to consider.

Security Companies Client Base

Ultimately you don’t have a business unless you have clients. This is probably the hardest area of running a security company. To establish consistent and repeat service clients who will provide you with ongoing revenue.

For a new security company owner, this will be daunting. Security companies staring from zero clients have a tough ride ahead if they don’t know where their next invoice will be getting sent to. For most new business owners, they tend to have a small number of potential clients that they know that if they should start their own security company, they should be able to drive some business with these potential clients. So it’s not quite as daunting as starting with no clients at all.

Website

But what if you don’t have any potential clients. Then for most security companies, you will need a website. There are three real types of website.

A shop window website is a basic one page website that you can build yourself or would cost up to £1000 to have professionally developed. This is a basic website with only one page that you can use to send to new clients, or refer people to if you want to highlight some of the services that you provide. The shop window website will look something like this - www.gensecrecruit.com

Then there are multi-page websites without SEO. This is a website with multiple pages where on each page you might showcase a different service that the security company provides. These can cost anywhere between £1000 and £5000. You can build them yourself, but it’s advisable to get them built by a professional. However, as this website does not have SEO on it, it will not get picked up by Google effectively when people are searching the internet for security companies to provide them with a service. But they do look better than a shop window website when you refer a client to them.

Then there are multi-page websites with SEO. These are the highest standard of security company website. With the ultimate aim of being ranked on Page 1 of Google so that when people are searching Google for security companies, you have a chance of gaining organic (no cost) customers through your website. The website must be professionally made, and will cost the security company anywhere between £5000 and £15000. Plus you will have monthly SEO costs from anywhere between £500 and £1500. The website will look something like this - www.securityandsafetysolutions.co.uk

Advertising

New security companies might have a few clients to start the business off, or you might be starting with no clients at all. Either way, you will need to advertise to try and establish new business. 

Pay Per Click

There are a number of ways to do this. But the most effective one is through Google. If you can do this organically at no cost with your multi-page SEO website, that’s going to be the most cost effective option. But if you don’t have SEO on your website or your SEO isn’t particularly effective, you will need to use Google pay per click (PPC) advertising. This is where your website ranks at the top of Google page 1 and you pay every time someone clicks on your advert. It should be noted, a click does not mean a sale. It’s just someone clicking through to your website to potentially make contact with your security company. You will need a budget of at least £1000 per month to be effective using Google PPC, and you shouldn’t do this with a basic shop front website.

Word of Mouth for Security Companies

Word of mouth advertising is great. As it’s usually because you’ve done a great job with a client. Or that you have a reputation that people you know are willing to promote you as a business owner and your services. The best thing is, it’s absolutely free. Although a crate of champagne to the person who referred your business, or a profit share, is always a nice touch.

Social Media  

Social media can be a great way to gain clients. But you’ve got to be active and posting at least weekly, if not more. If you’re not posting regularly, when people do click through to your LinkedIn or Facebook business pages, it just doesn’t look very professional. This can be hard work, to write an article or post every week, on top of trying to run a developing new security company. You could pay people to do this for you, but in the early stages of running a business, this is a cost you can do without. Once you have established a solid social media presence, you can also advertise through these platforms. Such as boosting a post on Facebook. This will cost you at least £50 per post boost. Your social media presence should look like this - https://www.facebook.com/thescurityadvisor/

Security Operators

Security companies will only ever be as good as the security operators that they deploy. So you must establish a core group of security operators that you know as a security company, you can rely on to turn up on time for a task, and conduct a service at a standard where you are pitching your business. You can’t have a 5* business, unless you have 5* security operators. Equally you might not be pitching your business at a 5* level, so you need to find a balance with the standard of security operator that you deploy. A poor security operator or performance can be enough to make your client look for another security company service provider. Equally, a quality security operator can be enough for your business to keep a client for years.

Building a trusted database of security operators is a task in itself, and generally takes a few years to get right. Where you know you can pick up the phone and have a quality security operator or team available to support your clients.

If you have to advertise a security job, this comes with considerable administrative burden that can take a lot of your time as a new business owner. So once you are able to avoid doing this, it’s better to do so.

Capital Investment 

Security companies that start with no capital money investment are going to struggle. 

There are business set up costs that should really be done through an accountant so that you know the business is set up correctly. You’ve got your website to pay for. Then potentially you’ll need some advertising revenue to build your client base. 

But a security companies biggest overhead is going to be your security operator wage bill. So new security companies might get their first client, a nice corporate business that wants some security for an event. Corporate clients can be great as they are more likely to pay than private clients. But often their payment terms can be anywhere between 30 and 90 days from invoice. But if you want to build a solid team of reliable security operators, you will need to pay those security operators in under 30 days as a maximum. So as a new security company, you will have a wage bill to pay before you’ve received payment for your first completed job. Your wage bill can be significant, anywhere up to 75% of the amount you’ve invoiced your client for. So you must have money in the bank to pay your security operators before you receive payment from your client.

Equally, it should be noted that not all clients are going to pay. Some clients will engage your services with no intent on paying for the service that they receive. So as a security company, you’ll need to absorb this cost and still pay the security operators that you deployed. Just because you have a solid contract with clients in place, it still doesn’t guarantee you payment.

Insurance 

To operate legally, you will need to be insured. This is public liability and employers liability insurance. With potentially, professional indemnity insurance also. For a business of around £250k in turnover, this will cost you around £350 per month. This figures rises incrementally as the size of the business grows.

Health and Safety Management

Any business, including security companies, must have reasonably practicable health and safety management in place. 

This means a health and safety policy, health and safety risk assessments, plus access to health and safety competent advice. This competent advice can be in-house within your business. So you’d need an employee with at least the NEBOSH Certificate or equivalent. Or you can outsource it to an external health and safety consultancy.

This is where the majority of even established security companies fail to be legally compliant. Plus not managing health and safety competently can invalidate your insurance. Think of it like your car insurance. This would be invalidated if you were drink driving for example. Your business insurance can be fully or partly invalidated if it is proved that you are not managing health and safety risk competently.

There’s no point working hard and building your new security company, only to have a workplace accident which wipes out the business and your reputation.

Access to competent health and safety external advice will cost you around £100 per month.

What Else Do Security Companies Need To Consider

There are other specialists that you will need access to such as accountants, legal advisors, and a mentor to guide on areas such as customer service and client management. Plus you might need an office, or workspace at home. You’ll need IT equipment, a phone, a desk, administrative platforms and templates for items such as contracts or NDAs. A business email and bank account. Then a whole lot of luck!

Are security companies worth setting up then

You can see from this article that it’s not just as easy as saying I want to start my own security company if you want to do it legally. To take that leap from security operator to security company owner, you’ll need some capital investment to get you started. You’ll need to make some big initial decisions like what sort of website can you afford to start with. You’ll need to work out how you are going to consistently build your client base. You’ll need to build a solid security operator team around you to support you to build your business. Then you need to have a basic understanding of specialist areas such as accountancy, insurance, and health and safety.

But is it worth it, absolutely. It’s not for everyone, but for those that take a leap into the unknown, their efforts can be rewarding.

If this article has raised questions about your own security, find out more about our security consultancy or our event security services - or get in touch to discuss your requirements directly.