What is the profit margin of a private security company?

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The Dojo Business Team

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How much revenue does one guard, one contract, and one client generate (by day/week/month/year)?

Per full-time guard, a private security company typically bills about $32/hour, which equals $256/day, $1,280/week, ~$5,530/month, and $66,560/year.

Small contracts average ~$500/month (~$115/week; ~$16/day; $6,000/year), mid-tier corporate contracts average ~$2,500/month (~$577/week; ~$82/day; $30,000/year), and top-tier/national contracts often exceed $10,000/month (~$2,308/week; ~$329/day; $120,000+/year).

Average client contract value clusters around ~$6,600 over its term; for a 12-month engagement that’s roughly $550/month (~$127/week; ~$18/day).

Calibrate these figures to your market, shift mix, and utilization rate to avoid overpromising margins.

You’ll find detailed market insights in our private security company business plan, updated every quarter.

What is the typical pricing structure for private security services?

Private security pricing centers on hourly guard rates, monthly retainers, and premium rates for specialized services.

Standard unarmed guards run ~$25–$35/hr; armed guards often range $35–$60/hr (and higher for high-risk). Event security, executive protection, and remote monitoring use custom pricing or blended day/block rates to reflect risk and staffing intensity.

Monthly contracts commonly span $1,500–$10,000+ depending on hours and specialization; executive protection frequently uses higher hourly or daily minimums.

Always align contract terms to overtime rules, holidays, and post orders to keep margins intact.

What are direct labor costs per security guard (wages, benefits, overtime) by timeframe?

Direct labor for a guard averages $18–$19/hour in wages plus roughly 20–30% for benefits.

This brings a typical fully loaded hourly cost to ~$23–$25 before overtime; annualized, many guards cost ~$46,000–$60,000 excluding occasional surges.

Overtime and holiday premiums can materially increase weekly and monthly totals, so scheduling discipline is essential.

Track actual effective hourly cost by post to avoid margin surprises.

What fixed overhead should a private security company expect, and how is it allocated?

Typical fixed overhead includes licensing/insurance ($5k–$15k/yr), office/admin ($24k–$96k/yr), and management salaries ($60k–$150k+).

Many firms allocate overhead into pricing at ~$2–$6 per billed guard hour to ensure each site contributes fairly. Formal allocations improve transparency and reduce underpricing risk.

Revisit the allocation quarterly as staffing mix and technology spend change.

Use a simple overhead-per-hour add-on in your rate card to lock in coverage.

This is one of the strategies explained in our private security company business plan.

What variable operating expenses hit each security contract?

Variable expenses tied to each private security contract include uniforms, radios/body-worn equipment, vehicles/fuel, software, and training.

Budgets often plan $250–$500 per guard per year for uniforms, $2,000–$6,000 per month for technology/monitoring programs, and a proportional share of fleet costs on mobile patrols.

Training typically runs $1,000–$5,000 per new hire plus $500–$2,500 annually for refreshers.

Track these at the site level to catch scope creep early.

What is the average gross margin for standard guard services (and in dollars)?

Gross margin for standard guard services typically sits around 12–18%, with many operators targeting 15–20% when utilization is strong.

For example, at $32/hr bill and ~$23/hr loaded labor, gross profit is ~$9/hr (about 28%), or ~$360/week, ~$1,560/month, and ~$18,720/year per full-time guard.

Margin tightens if overtime rises or if you discount rates without lowering cost.

Guard-hour mix and shift design are the fastest levers to protect gross margin.

How do margins differ by service type (regular guards vs. event, executive protection, mobile patrols, remote monitoring)?

Margin profiles vary widely across private security services.

Standard guarding usually lands low-teens; event security can be higher-rate but also higher-cost; executive protection tends to carry premium margins; mobile patrols are constrained by vehicle costs; and remote monitoring is capital-light with strong margins once deployed.

Blend your portfolio toward specialized and tech-enabled lines to lift blended margins.

Use rate cards that reflect true cost drivers by service.

What does a percentage margin mean in practice (10%, 20%, 30%) across timeframes?

Margin percentage is the share of revenue left after direct costs; 10% means you keep $0.10 of every $1.00 billed before overhead.

On $100,000 annual revenue, 10% yields $10,000 profit; 20% yields $20,000; 30% yields $30,000. Translating per guard at $32/hr full-time: 10% ≈ $3.20/hr, 20% ≈ $6.40/hr, 30% ≈ $9.60/hr.

Across weekly/monthly periods, multiply the hourly profit by billed hours to see true cash generation.

Use this table to link rate decisions to dollars.

What is the typical net profit margin range, and how does it change with company size?

Net profit margin for private security companies generally ranges from ~5–10% for small firms, ~10–15% for mid-sized operators, and up to ~20% for large multinationals.

Scale enables centralized scheduling, better utilization, and technology leverage, all of which lift margin. Smaller firms can still hit double-digits by tightly controlling overtime and pricing for true cost.

Track profit by service line to see which units fund growth.

Reinvest gains into tech and supervisor capacity to sustain margin as you scale.

What benchmarks and scale effects matter most to profitability?

Benchmarks to watch are bill rate vs. fully loaded labor, overtime percent of hours, and supervisor-to-guard ratios.

Economies of scale reduce equipment cost per post, unlock better software pricing, and improve labor efficiency through centralized dispatching. Diseconomies appear when management layers grow faster than revenue.

Standardize post orders and reporting to keep efficiency gains locked in.

Benchmark monthly and reprice lagging sites promptly.

We cover this exact topic in the private security company business plan.

Which strategies reliably improve profitability in a private security company?

• Build a rigorous scheduling discipline to minimize overtime and idle time.
• Reduce turnover with faster hiring, better onboarding, and supervisor support.
• Upsell higher-margin services (executive protection, remote monitoring, hybrid guard-tech).
• Adopt guard management software for reporting, geofencing, and payroll accuracy.
• Bundle multi-site or multi-service contracts to improve utilization of relief staff.

Get expert guidance and actionable steps inside our private security company business plan.

What financial risks can erode margins, and how do we mitigate them?

• Unplanned overtime and holiday premiums — mitigate with forecasting and shift caps.
• Poorly scoped contracts — use detailed post orders and change-order clauses.
• Slow client payments — enforce deposits, milestones, and automated invoicing.
• Compliance failures and insurance claims — invest in training and audits.
• High churn — stabilize teams to cut training/replacement costs and improve service.

This is one of the many elements we break down in the private security company business plan.

What is the “average” gross margin in dollars per guard or per contract?

Converting percentages to dollars clarifies targets quickly.

At $32/hr bill and ~$23/hr cost, you retain ~$9/hr (~28%) per guard, which is ~$360 per week and ~$1,560 per month per full-time post. For a $2,500/month contract, a 15% gross margin equals ~$375/month.

Use these dollar targets to guide discounts and staffing changes.

Never cut rates without a corresponding cost reduction.

How should I allocate overhead per unit of service?

Translate annual overhead into a per-hour add-on to keep pricing consistent across sites.

For example, $120,000 annual overhead divided by ~80,000 billed hours ≈ $1.50/hr overhead to add before target margin. Many firms sit closer to $2–$6/hr depending on structure.

Review quarterly and reset when your billed hours or technology stack shifts.

Publish the add-on inside your internal pricing model to enforce discipline.

How do event, executive protection, and remote monitoring rates affect real profit?

Premium services usually produce higher dollars of profit per hour even if the percentage margin looks similar.

Executive protection at $100/hr with a 25% gross margin yields $25/hr profit; remote monitoring programs can scale to high monthly profit once hardware is amortized. Event work must absorb surge recruiting, training, and coordination costs.

Price based on the total effort to deliver, not just guard hours.

Model each line separately so cross-subsidies are intentional.

Conclusion

This article is for informational purposes only and should not be considered financial advice. Readers are encouraged to consult with a qualified professional before making any investment decisions. We accept no liability for any actions taken based on the information provided.

Sources

1. Belfry Software — How much does a security company make per guard?
2. Private Security Leaders — Profit potential of operating a security agency
3. Sirix Monitoring — Cost of a security guard
4. Novagems — Pricing strategies for guard rates
5. BOS Security — Real security guard costs (2025)
6. ZipRecruiter — Security guard salaries
7. Businessplan-templates — Security services running costs
8. Belfry Software — Are security companies profitable?
9. GetSIRV — Security guard profit margin
10. DojoBusiness — Private security company business plan