How to Start a Security Company: A 10-Step Guide With Real Costs

By the Start a Security Company team · Updated October 2026

The templates in this guide come from the company Mike Evans built from scratch into a multimillion-dollar international security firm.

1. Choose your niche and services

Decide what you will sell before you spend money. Your services drive your license class, insurance price, training, and hiring.

Most new companies start with one of these:

• Unarmed standing posts. Office lobbies, construction sites, apartment complexes, retail. Lowest barrier to entry.
• Mobile patrol. One officer in a marked vehicle checks several sites per shift. Adds vehicle and auto insurance costs.
• Event security. Short, intense jobs. Good for building a bench of part-time officers.
• Armed security. Banks, cannabis, high-risk retail. Higher bill rates, but armed coverage costs more. One broker puts the armed premium increase at 40% to 60%.

Start narrow. One service, one region, one type of client. A company that does "unarmed guards for construction sites in two counties" is easier to sell, staff, and insure than one that does everything.

Write down three things now: who your first ten target clients are, what a typical post looks like (hours per week, armed or unarmed, day or night), and what your competitors charge. You will reuse all three in your business plan and your pricing.

2. Check your state's licensing rules

Licensing is the step that most often delays a launch. Most states require security guards to be licensed by the state where they work. Armed guards face stricter background checks and separate firearm licensing (BLS).

Many states license two things separately:

1. The company. Texas calls it a Class B guard company license. Florida calls it a Class B security agency license.
2. Each officer. Texas registers non-commissioned (unarmed) officers and commissions armed officers. Florida issues Class D (security officer) and Class G (statewide firearm) licenses.

Some states also require a licensed manager or qualifying agent with set experience. That person may need to pass an exam. If you lack the experience, you may need to hire or partner with someone who has it.

Fees are modest. Time is the real cost. Fingerprint processing, background checks, and exam scheduling take weeks. Start the application as soon as you pick your entity name.

Look up your state on our licensing hub. Each state page lists the agency, license types, and links to the official forms. Texas readers can go straight to the Texas page.

Do not sign a client or schedule a shift until the company license is issued. Working unlicensed can cost you the license you applied for.

3. Form your business entity and get an EIN

Most security companies form an LLC or a corporation. Either one separates business debts from personal assets. Talk to an accountant about tax treatment before you choose.

1. Pick a name. Check that it is free with your secretary of state. Some licensing agencies must approve the company name too, so check both.
2. File formation papers. In Texas, a certificate of formation for an LLC or a for-profit corporation costs $300 (Texas Secretary of State).
3. Name a registered agent. You can serve as your own agent, or pay a service — see our tools pagefor an option.
4. Get an EIN. Apply free with the IRS. The IRS says you "never have to pay a fee for an EIN" and warns against sites that charge for one. Form the LLC or corporation with your state first.
5. Open a business bank account. Keep every dollar of company money in it.
6. Register as an employer with your state for unemployment tax and withholding.

Your licensing application will usually ask for the entity documents and EIN. Do this step early so it does not hold up step 2.

4. Get insured

You cannot get most contracts without insurance. Many clients will ask for a certificate of insurance before your first shift. Some will ask to be named as an additional insured.

The core policies:

• General liability. Covers third-party injury and property damage claims. One broker calls $1 million limits standard for security firms.
• Workers' compensation. Covers employee injuries on the job. State rules on who must carry it vary, so check yours. Priced per $100 of payroll, so it grows as you add hours.
• Professional liability (errors and omissions). Covers claims that your officers failed to do the job. Some carriers fold this into general liability.
• Commercial auto. Needed if you run patrol vehicles.
• Umbrella. Adds limits on top of your other policies. Large clients may require it.

Get quotes from an agency that writes security accounts. Ask each carrier directly whether it covers guard work. Bring your services list, projected payroll, and post locations to the quote. Armed work, bars, and nightclubs price higher.

Insurance is also a pricing input. Your bill rate must carry workers' comp on every hour. See the cost tables below for published ranges.

5. Write your business plan and line up funding

A security company is a labor business. Your plan must show how many billable hours you will sell, at what rate, and what each hour costs you. Lenders will look at that math first.

The SBA lists the parts of a traditional plan: executive summary, company description, market analysis, organization and management, services, marketing and sales, funding request, financial projections, and appendix. For the funding request, the SBA says to "clearly explain how much funding you'll need over the next five years."

For a guard company, focus on three numbers:

1. Bill rate vs. burdened wage. This sets your gross margin per hour.
2. Break-even hours. How many billable hours per week cover your fixed costs.
3. Payroll float. You pay officers every week or two. Clients may pay 30 days or more after invoice. You must fund that gap.

Payroll float is where new companies run out of cash. If you staff 200 hours a week at a $20 wage and your client pays 30 days after month-end, you can carry five or more weeks of payroll before the first check clears. At $4,000 a week, that is about $20,000 in wages alone.

Our security company business plan page walks through a full 11-page plan with financial statements. The Professional package includes that plan, with a worked Year 1 you can edit.

6. Set up contracts and company policies

Write your paperwork before you need it. A client who is ready to sign will not wait two weeks while you draft a contract.

Client-facing documents:

• Security services agreement. Scope, post orders, hours, rates, billing terms, insurance requirements, termination, and limits of liability. Start with our sample contract for security services.
• Proposal. What you will do, how, and for how much. See theproposal template.
• Post orders. Site-specific duties for each post.

Internal documents:

• Employee handbook. Conduct, uniforms, attendance, use of force, social media, discipline. See the employee handbook page.
• Standard operating procedures. Patrols, incident response, reporting, shift change, emergency calls. See the SOP page.
• Hiring forms. Application, background check authorization, offer letter, training sign-offs.

The Starter package includes 53 templates covering these areas. Professional adds done-for-you branding with your company name and logo on every document.

Professionally prepared templates, not legal advice. Requirements vary by state — have an attorney review before use.

7. Price your services: bill rates

Your bill rate is the hourly price the client pays. It must cover the officer's wage, the employer costs on top of that wage, and your margin. Price below that and every hour you sell loses money.

Start with the wage you need to pay to hire and keep officers in your market. BLS reports a median annual wage of $38,020 for security guards (May 2025). Local rates vary widely.

Then add the burden. Burden is what you owe on every payroll dollar beyond the wage: employer Social Security and Medicare, federal and state unemployment tax, and workers' comp. See the worked example below.

Last, add margin. Gross margin pays for supervision, insurance beyond workers' comp, uniforms, software, sales, office costs, and profit.

Price by post, not by guess. A 24/7 post is 168 hours a week. Holidays and overtime change the math. Ask early whether the client expects holiday rates and who pays for overtime caused by client requests.

Use our free bill rate calculator to test wage, burden, and margin for your state.

8. Hire and train your officers

Your officers are your product. The client sees them, not you.

Hiring basics:

• Most states require guards to be at least 18, pass a background check, and complete training (BLS).
• Run your own background check through a consumer reporting agency on top of the state check. Get written authorization first.
• Verify each officer's state license or registration before the first shift. Keep a copy on file with its expiration date.
• Build a bench. Hire more part-time officers than you think you need. Call-offs are constant.

Training:

BLS notes that many states recommend about 8 hours of pre-assignment training, 8 to 16 hours of on-the-job training, and 8 hours of annual training. Armed officers get firearms training and may be tested periodically. Check your state's exact hours on your state licensing page.

Add your own site training. Walk each officer through post orders, emergency contacts, and reporting before they work alone.

Document every hour of training. Keep signed acknowledgments of the handbook and post orders in each personnel file. The Business in a Box package includes the handbook, training records, and hiring forms.

9. Set up operations: scheduling, reporting, and uniforms

Clients judge you on two things: the officer shows up, and the report shows up. Build systems for both before your first post.

Scheduling. Use a scheduling app with a mobile time clock from day one. Spreadsheets break the first time an officer calls off at 2 a.m. Some apps are free for very small teams.

Reporting. Every shift needs a daily activity report. Every incident needs an incident report the same day. Use one format across all posts. Some clients will ask for patrol proof, such as checkpoint scans.

Supervision. Plan who checks on posts and how often. Spot checks catch sleeping officers before the client does.

Uniforms and equipment. Decide what officers wear and what the company provides. Common items: shirts, jackets, badges or patches, radios or phones, flashlights. Track what you issue and get it back at separation.

Payroll. Use a payroll service that files payroll taxes for you. Late payroll taxes are expensive.

Billing. Invoice from the same time records you use for payroll. If the hours do not match, you will lose money or credibility.

Our tools page lists guard management, scheduling, background check, and payroll options. Our SOP templates cover report formats and post procedures.

10. Win your first clients

Your first contract is the hardest. You have no references yet. Make it easy for a buyer to say yes.

Where first clients come from:

• Your own network. Property managers, contractors, church leaders, and event organizers you already know.
• Construction sites. New projects need night and weekend coverage. Look at building permits and job-site signs.
• Property management companies. One manager can control many properties.
• Event organizers. Short jobs let you prove reliability fast.
• Subcontracting. Larger guard companies sometimes subcontract overflow work. Lower margin, but real hours and references.

How to close:

1. Meet the decision-maker on site. Walk the property.
2. Send a written proposal within 48 hours. Include scope, hours, rate, and your insurance limits.
3. Follow up once a week until you get a yes or a no.
4. Send the contract the day they say yes.

Start small. One reliable post that renews is worth more than three you cannot staff. Ask every happy client for a reference letter after 90 days.

The Professional package includes a PowerPoint proposal deck and a bonus marketing set, both branded with your company name and logo.

Startup costs for a small unarmed company

Example: 5 officers. Figures are fees and published prices from the sources listed. The Low and High columns use the lowest and highest published figure we found for each line. Typical is a 5-officer unarmed company in Texas.

Not included: payroll float (see step 5), uniforms, equipment, vehicles, marketing, office space, and professional fees. Budget for these separately. Third-party court fees on background checks are passed through at cost and are extra. Prices are as published in October 2026 and change.

Sources: Texas Secretary of State Form 806 fee schedule; IRS EIN page; Northwest Registered Agent pricing; Texas DPS Private Security fee schedule; Florida FDACS Chapter 493 license fee schedule; Checkr pricing; ALKEME, "Security Company Insurance" (May 2026); Gusto pricing; Connecteam.

Insurance costs for security companies

Published ranges from insurance agencies that write security accounts. Your quote depends on state, services, payroll, claims history, and limits.

Sources: ALKEME, "Security Company Insurance: Essential Coverage for Guard Firms" (May 8, 2026); El Dorado Insurance Agency, Security Guard Insurance page. El Dorado Insurance is a sponsor of this site.

Your first 90 days

Days 1–30: Set up. Pick your niche. Form the entity. Get the EIN. Open the bank account. Submit the company license application and start fingerprints. Request insurance quotes. Draft the business plan.

Days 31–60: Build. Finish the business plan and secure funding. Bind insurance once the license is close. Finalize your contract, proposal, handbook, and SOPs. Set up payroll, scheduling, and reporting. Start recruiting officers and building a client list.

Days 61–90: Launch. Once the company license is issued, register or license your officers. Train them. Meet prospects on site. Send proposals. Staff your first post. Review every report for the first two weeks.

State processing times vary. Your licensing agency's timeline, not this calendar, sets your real launch date.

Worked example: from a $20 wage to a bill rate

This example uses a $20 hourly wage, a full-time officer at 2,080 hours a year, and a new Texas employer. Your state's rates will differ.

At a 30% gross margin, the bill rate is about 1.6 times the wage. The $9.72 per hour must pay for supervision, liability insurance, uniforms, software, sales, office costs, and profit. Paid time off, overtime, and holiday premiums raise your cost per billed hour. Add them if you offer them.

Run your own numbers in the bill rate calculator.

Sources: IRS Topic 751 (employer Social Security 6.2%, Medicare 1.45%); IRS Topic 759 (FUTA 6.0%, 0.6% after maximum 5.4% credit, $7,000 wage base); Texas Workforce Commission 2026 tax rates (2.70% new employer rate, $9,000 wage base); ALKEME (workers' comp $5–$10 per $100 of payroll).

Frequently asked questions

Professionally prepared templates, not legal advice. Requirements vary by state — have an attorney review before use.