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

Sioux Falls, SD vs Houston, TX

Sioux Falls, SD

$16,000 - $104,000

COL Index: 92.5

Houston, TX

$16,000 - $105,000

COL Index: 96.5

Detailed Cost Comparison

Expense	Sioux Falls, SD	Houston, TX	Difference
Licensing & Registration	$2,000 - $10,000	$2,000 - $10,000	Same
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)	$4,600 - $27,800	$4,800 - $29,000	-4%
Total Estimated Cost	$16,000 - $104,000	$16,000 - $105,000	-1%

Local Market Factors

Factor	Sioux Falls	Houston
Cost of Living Index	92.5	96.5
Commercial Rent ($/sqft/yr)	$12 - $24	$18 - $45
Labor Rate Index	0.9	0.92
Sales Tax	6.5%	8.25%
Minimum Wage	$11.20/hr	$7.25/hr
LLC Filing Fee	$150	$300

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