How much does it cost to start a security company?

This article was written by our expert who is surveying the industry and constantly updating the business plan for a private security company.

Who wrote this content?

The Dojo Business Team

A team of financial experts, consultants, and writers

We're a team of finance experts, consultants, market analysts, and specialized writers dedicated to helping new entrepreneurs launch their businesses. We help you avoid costly mistakes by providing detailed business plans, accurate market studies, and reliable financial forecasts to maximize your chances of success from day one—especially in the private security market.

What is the minimum and average startup budget required to launch a security company?

The minimum startup budget for a private security company ranges from $15,000 to $30,000 for lean operations, while the average budget spans $50,000 to $150,000 for standard operations.

Lean operations typically involve working from home, using freelance security personnel, and leasing equipment rather than purchasing. This approach minimizes overhead costs but limits your operational capacity and growth potential in the initial phases.

Standard operations require a physical office space, hiring full-time licensed security personnel, and purchasing essential equipment. This investment provides better operational control and professional credibility but demands significantly higher upfront capital.

Large-scale security operations can require $250,000 to $500,000 or more, especially when incorporating advanced technology, specialized services, or maintaining a fleet of vehicles. These investments are typically justified when targeting high-value commercial contracts or specialized security sectors.

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

What are the specific licensing and registration fees at the local, state, and federal levels?

Licensing and registration fees for private security companies vary significantly by jurisdiction, with total costs ranging from $650 to $2,750 for initial setup.

Local and state application fees typically range from $100 to $500, while license fees can cost between $500 and $1,750 depending on the state. For example, Georgia charges approximately $600 for security company licensing, while Connecticut requires $1,450 for similar permits.

Federal registration involves general business incorporation costs rather than specific security licenses, typically ranging from $50 to $500. This includes federal tax ID registration and basic business entity formation with the appropriate state authorities.

Additional costs may include background check fees for key personnel, fingerprinting requirements, and annual renewal fees that can range from $200 to $800 depending on your state's regulations. Some states also require surety bonds, which can add $500 to $2,000 to your initial costs.

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

How much does liability insurance typically cost for a security company starting out?

Liability insurance for a startup security company typically costs between $2,500 and $6,000 annually, depending on coverage levels and services offered.

General liability insurance with $1 million coverage usually costs $1,000 to $2,500 annually for basic security services. This coverage protects against third-party injury claims and property damage incidents that may occur during security operations.

Armed guard insurance adds an additional $500 to $2,000 annually to your premium, reflecting the increased risk associated with armed security personnel. This specialized coverage is mandatory in most states when providing armed security services.

Workers' compensation insurance represents 1-3% of your total payroll and is required in most jurisdictions. For a small security company with $200,000 in annual payroll, this translates to approximately $2,000 to $6,000 per year. Professional liability insurance may add another $800 to $1,500 annually for comprehensive protection.

What are the average costs for uniforms, badges, and protective equipment per security officer?

How much should be budgeted for company vehicles, including leasing, insurance, and maintenance?

Company vehicle costs for a security business typically range from $5,000 to $12,000 annually per vehicle, including leasing, insurance, and maintenance expenses.

Vehicle leasing costs range from $200 to $500 per month depending on the type of vehicle and lease terms. Security companies often choose reliable, fuel-efficient vehicles that project a professional image while maintaining reasonable operational costs.

Commercial vehicle insurance adds $1,200 to $2,400 annually per vehicle, depending on coverage levels and driving records of assigned personnel. This insurance must cover both company liability and potential damages during security operations.

Annual maintenance and fuel costs typically range from $2,000 to $4,000 per vehicle, including regular servicing, repairs, and fuel expenses. Security vehicles often accumulate higher mileage due to patrol routes and emergency responses, requiring more frequent maintenance than typical business vehicles.

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

What is the estimated monthly cost of salaries and benefits for a small team of licensed security personnel?

Monthly salary and benefit costs for a small team of five licensed security personnel typically range from $12,500 to $20,800, translating to $150,000 to $250,000 annually.

Security guard salaries vary significantly by region and experience level, ranging from $12,000 to $65,000 annually per guard. Entry-level positions in smaller markets may start around $25,000 annually, while experienced guards in major metropolitan areas can earn $45,000 to $65,000 per year.

Benefits typically add 20-30% to base salary costs, including health insurance, workers' compensation, payroll taxes, and potential retirement contributions. For a team earning $180,000 in combined base salaries, benefits could add an additional $36,000 to $54,000 annually.

Supervisory positions and specialized skills command premium wages, with shift supervisors earning 15-25% more than standard guards. Armed security personnel also typically receive 10-20% salary premiums due to additional licensing requirements and responsibilities.

What are the upfront and recurring costs of purchasing or leasing office space and utilities?

Office space and utility costs for a security company typically require $2,500 to $5,000 for initial setup and $600 to $2,000 monthly for ongoing expenses.

Shared office spaces can be leased for $100 to $1,000 monthly, providing a professional address and basic amenities without the commitment of traditional commercial leases. This option works well for startup security companies focusing on field operations rather than extensive administrative functions.

Dedicated office space typically costs $8 to $25 per square foot annually, depending on location and amenities. A modest 500-square-foot office might cost $350 to $1,000 monthly, while larger operations requiring 1,500 square feet could pay $1,000 to $3,000 monthly.

Utility costs including electricity, internet, phone systems, and basic office services typically range from $500 to $1,000 monthly. Initial office setup costs for furniture, equipment, and technology infrastructure typically require $2,000 to $5,000 in upfront investment.

How much do industry-standard security systems, radios, and surveillance equipment typically cost?

Industry-standard security systems, radios, and surveillance equipment typically require an initial investment of $3,000 to $20,000, depending on the scale and sophistication of your operations.

Professional two-way radios cost between $17 and $86 each, with most security companies opting for mid-range models around $40 to $60 per unit. A team of ten guards would require approximately $400 to $600 in radio equipment, plus charging stations and accessories.

Commercial-grade surveillance cameras range from $1,000 to $5,000 for a basic system, while comprehensive monitoring setups can cost $10,000 to $25,000. These systems often include multiple cameras, recording equipment, and remote monitoring capabilities essential for professional security operations.

Monitoring software and cloud storage services typically cost $200 to $500 monthly, providing real-time communication, incident reporting, and client management capabilities. Additional equipment such as security lighting, alarm systems, and access control devices can add $2,000 to $8,000 to your initial technology investment.

What are the typical expenses for training programs and certifications required for staff?

Training programs and certifications for security personnel typically cost $500 to $1,000 per employee for basic training, with specialized certifications ranging from $2,000 to $15,000 or more.

Basic security guard training and licensing typically costs $500 to $1,000 per employee, covering fundamental security procedures, legal requirements, and state-mandated certification programs. This training is mandatory in most jurisdictions and must be completed before personnel can begin work.

Specialized certifications such as armed guard training, cybersecurity qualifications, or executive protection courses can cost $2,000 to $15,000 per employee. These premium certifications often justify higher billing rates and enable access to lucrative specialized contracts.

Ongoing training requirements typically cost $200 to $500 per employee annually for refresher courses, continuing education, and skills updates. Many states require annual recertification, and clients often demand ongoing professional development to maintain service contracts.

It's a key part of what we outline in the private security company business plan.

What are the costs involved in setting up and maintaining a dispatch and monitoring system?

Setting up and maintaining a dispatch and monitoring system typically requires $2,000 to $5,000 for initial setup and $200 to $500 monthly for ongoing operations.

Initial system setup costs include computer hardware, specialized software licensing, communication equipment, and installation services. Professional dispatch software can cost $1,000 to $3,000 in licensing fees, while necessary hardware and setup services add another $1,000 to $2,000.

Monthly operational costs include cloud storage, software maintenance, communication services, and technical support. These recurring expenses typically range from $200 to $500 monthly, depending on the number of active guards and volume of communications.

Advanced monitoring capabilities such as GPS tracking, real-time reporting, and client portal access may add $100 to $200 monthly to your operational costs. However, these features often justify premium pricing and improve client satisfaction, making them worthwhile investments for growing security companies.

How much should be allocated for marketing, branding, website, and client acquisition strategies?

Marketing, branding, and client acquisition typically require 10-15% of your startup budget, translating to $5,000 to $15,000 for most security companies.

Professional website development costs $1,000 to $3,000 for a basic business website with essential features such as service descriptions, contact forms, and client testimonials. E-commerce functionality and advanced features can increase costs to $5,000 to $8,000.

Digital marketing campaigns including search engine optimization, online advertising, and social media management typically cost $2,000 to $5,000 initially, with ongoing monthly expenses of $500 to $2,000. These investments are crucial for establishing online visibility and generating leads.

Traditional marketing materials such as business cards, brochures, vehicle graphics, and uniforms with company branding typically cost $1,500 to $4,000. Professional logo design and brand identity development may add another $500 to $2,000 to your initial marketing investment.

What are the legal, accounting, and administrative costs associated with running the business in its first year?

Conclusion

Starting a private security company requires careful financial planning and substantial upfront investment, with total startup costs ranging from $15,000 for lean operations to over $500,000 for comprehensive services. The key to success lies in accurately estimating all cost categories and maintaining adequate cash flow during the critical first year of operations.

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

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. Business Plan Templates - Security Firm Startup Costs
2. Belfry Software - How Much Does It Cost to Start a Security Company
3. Dojo Business - Private Security Company Startup Costs
4. Georgia Secretary of State - Security Company Licensing Guide
5. Lendza - How Much Does It Cost to Start Security Company
6. Connecticut Department of Emergency Services - Security Companies FAQ
7. Southern States Insurance - Security Guard Insurance Costs
8. Safe and Sound - Armed Security Guard Insurance Cost
9. Business Plan Templates - Security Company Running Costs
10. FinModelsLab - Security Company Operating Costs