LAST EDIT May 9, 2023
Question: How Much Do Security Guard Companies Charge?
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As the author of How to Start a Security Agency I often communicate with readers who are planning to start their own agency. One of the most challenging questions I have to answer is: "How do I find out how much security companies are charging for their services so that I can underbid them?"
Today, we're going to uncover this closely guarded secret using a hard-to-find resource.
Known as "The Most Elusive Metric in the Industry: Security Contract Bill Rates," this figure is a critical part of a security company's competitive strategy and a closely guarded piece of intellectual property. So essential is this information that professional security companies won't even disclose it to their own officers.
If a competitor uncovers this rate, they could potentially underbid the original company and steal the contract. This puts new security entrepreneurs in quite a predicament: how much are the established players charging? How does one know if their bid for a security post is competitive or if they're leaving money on the table?
Security entrepreneurs caught a big break thanks to Trackforce Valiant, operators of security workforce management software used by leading security providers. They released a hard-to-find report in 2020.
In preparing the report, they analyzed over 83,000 security officers on shift from over 200 security guard firms during December 2019. The report's key finding revealed that officer pay constituted 50 to 60 percent of the security companies' bill rates. Thus, if a security officer was making $15 per hour, the security company was likely charging around $20 per hour.
This simple formula allows the security entrepreneur to quickly estimate how much opposing companies are likely bidding. They simply find the median wage for security officers in their state and multiply that wage by 1.33. A list of each state's median wage, according to the 2022 US Bureau of Labor report, is in the description below this video.
Of course, this is the most basic method for estimating bill rates. There's additional nuance that's important, and interested security entrepreneurs should read the entire Trackforce report.
For example, Trackforce found that the margin on armed security work appears to be tighter than unarmed. They also noted that government contracts offer higher bill rates than non-government contracts. So, take some time and read the 19-page report for yourself; it's full of insights that all security entrepreneurs will greatly benefit from.
For some reason, this report has been mostly taken offline. It's no longer available at its original link. One can speculate that perhaps the big security providers weren't happy about this data getting out into the public, but who knows? I'm always on the lookout for new conspiracy theories, as all of my old ones have come true.
With this information, you can design your security service pricing model with guidance on how much your competition might charge.
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How to Lower the Cost of the Securty Guard Company's Insurance Premiums - Methods for cutting the cost of insurance and undercutting the price model of the big security companies. Click to Read
How Much Should a Company Charge for Security Patrol? - Methods for charging for patrol route services. Click to Read
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