How much does it cost to start a security company?

A security company costs $10,000 to $100,000 to start. A small unarmed guard service starts at $10,000 to $25,000 for licensing, insurance, uniforms, and marketing. An armed security company with patrol vehicles and multiple guards requires $50,000 to $100,000. Insurance and licensing are the largest fixed costs since security companies face strict state regulations.

How much do security companies charge?

Security companies charge $15 to $35 per hour for unarmed guards and $25 to $60+ per hour for armed guards. Event security runs $25 to $50 per guard per hour with minimums. Mobile patrol services charge $15 to $30 per patrol check. Annual contracts with commercial properties provide the most stable revenue at $3,000 to $15,000 per month per site.

Is a security company profitable?

Security companies operate on margins of 10 to 25 percent on guard services. The key to profitability is billing rate versus pay rate since a guard paid $15/hour and billed at $25/hour generates $10/hour gross margin. Companies managing 20+ guards on long-term contracts can generate $500,000 to $2 million+ in annual revenue. Recurring contracts make revenue highly predictable.

Security Company Startup Cost Comparison

Racine, WI vs Los Angeles, CA

Racine, WI

$16,000 - $103,000

COL Index: 89.5

Los Angeles, CA

$21,000 - $130,000

COL Index: 166.5

Detailed Cost Comparison

Expense	Racine, WI	Los Angeles, CA	Difference
Licensing & Registration	$2,000 - $10,000	$4,000 - $14,400	-35%
Uniforms & Equipment	$2,000 - $15,000	$2,000 - $15,000	Same
Patrol Vehicle	$2,000 - $20,000	$2,000 - $20,000	Same
Insurance & Bonding	$3,000 - $15,000	$3,000 - $15,000	Same
Guard Training Program	$1,000 - $8,000	$1,000 - $8,000	Same
Marketing & Contract Bidding	$1,000 - $8,000	$1,000 - $8,000	Same
Working Capital (2 Months)	$4,500 - $26,900	$8,300 - $50,000	-46%
Total Estimated Cost	$16,000 - $103,000	$21,000 - $130,000	-21%

Local Market Factors

Factor	Racine	Los Angeles
Cost of Living Index	89.5	166.5
Commercial Rent ($/sqft/yr)	$9 - $22	$30 - $85
Labor Rate Index	0.83	1.35
Sales Tax	5.5%	9.5%
Minimum Wage	$7.25/hr	$16.78/hr
LLC Filing Fee	$130	$70

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