How much does it cost to open a security company? In this article, we’ll be dealing with the several expenses involved in setting up a security firm.
One of the first things that come to mind when starting a business is the cost involved. The cost implications cover all areas of operation including the purchase of equipment, registrations, licensing, running costs, among so many others.
We will be focusing on the average cost of starting up a security company.
Low Cost of Entry
One of the great things with starting your own security company is that the cost of starting is typically lower. This is especially true if you’ve been involved in this industry for a considerable amount of time.
As a result, it is one industry with endless possibilities for growth. This takes us to the next point;
How Big Is The Security Industry?
To give you an idea of the potentials for new security companies, the industry is massive and still growing. The industry within the United States is estimated at a whopping $31 billion and still growing.
An increasing number of businesses, companies, and private individuals are seeing the need for security services.
Filling up this demand is one way to tap into this growing industry. However, to become a successful industry player, you’ll need to know what it takes especially as it has to do with the startup costs.
We’ll be getting into the details on cost shortly to enable you to get a clearer picture.
Average Startup Costs For A Security Company
There are different aspects of the cost when it comes to starting a security company. Although this is a low-cost business, a greater part of the cost will be taken up by insurance.
This section will cover the different costs involved in starting your company. It includes the following;
Insurance Premiums (First Year)
Again, insurance takes up a greater part of your overall costs. A year’s worth of premiums will cost you an average of $5,700. So, what does it consist of? It includes vehicle insurance for your patrol car which costs about $1,200, one year of general liability insurance premium at $3,500, and a worker’s compensation insurance of $1,000.
A year’s worth of insurance premium allows for adequate time to attract paying clients who enable you to renew your insurance upon expiration.
So, are these costs fixed, and are there ways to cut down on insurance costs? The fact is, there are no fixed or uniform insurance costs.
It varies by location, plus, you can also find ways to cut down on such costs.
One of the ways is by taking advantage of your state’s insurance laws allowing you to waive off compensation insurance as it applies to your work hours.
However, you’ll still need to pay compensation premiums for hours or work done by your employees.
Business Filing And Licensing Costs
Another cost component when starting a security company is the business filing and licensing costs.
These are incurred from registering your business’ legal status. That is, either an LLC or a corporation. The business filing and licensing costs will amount to about $1,000. This cost can be reduced significantly by opting for a DBA.
However, this comes with certain limitations.
Equipment and Uniforms Cost
When getting the uniforms for your security company, it is important to find out what regulations apply to your state. The average cost for uniforms and equipment should take up about $300. This applies to a new company.
As your security outfit grows, your expenses on equipment will increase.
Marketing is critical to the growth of your security company. It includes effective tools that help you easily reach your target market with the right message while cutting down on costs. Marketing for your new security company will cost about $700.
Printed marketing materials make up a significant portion of your tools. You can take advantage of online printing services such as VistaPrint and UPrinting among others. These significantly cut down on your overall costs.
A security company will hardly function effectively without an online presence. The online space has greatly transformed the way business is being transacted by providing a directory as well as ready information on all that needs to be known about your security company. All of these are available with just a few clicks.
The cost of having a website starts at $50. The drop in cost is due to tremendous improvements made by hosting companies. This allows new businesses to easily create their website with little to no difficulties.
As the security company expands, you can take it a step further by adding more features and capabilities to the website.
In starting your security company, you are likely to incur costs as it relates to an office space. However, this isn’t mandatory.
In other words, you can function without an office space for the time being because clients will hardly want to meet in your office. This takes off a huge cost burden from your overall startup costs.
Nevertheless, some states require that you maintain office space. One of the ways to minimize such costs is by using a shared-workspace. Office space costs about $600. An even better alternative is to trade an office space for security services.
A lot of property managers will be more than willing to offer you an office space in exchange for security services for such properties.
A contingency fund safeguards your business operations in times of uncertainty.
In other words, it acts as a safety net that prevents negative situations from grounding your business activities. It’s best to have a contingency fund starting from $1,300 or 10% of expenses. This should increase with growth.
Getting a patrol car for your security company enhances the image of your business. Your company looks more professional and is taken much seriously.
However, this isn’t a required expense. You should be able to get a good patrol car for $3,000. Fuel and maintenance should gulp about $500.Your total cost for starting a security company will cost about $13,150.
The information provided here has attempted to answer the question of how much it will cost to start a security company. The different aspects of these costs have been highlighted too.