Security Guard Company
Contracted guard hours that turn into sticky, recurring revenue
Bottom line
Worth studying, but do not buy without strong local proof.
Security guard companies provide on-site guarding, patrol, and event security for commercial properties, construction sites, multifamily, retail, and institutions. Revenue is typically billed per guard-hour with monthly contracts. While the model is labor-heavy and margins are thinner than many home services, well-run firms win on scheduling discipline, client retention, and upselling higher-margin services like mobile patrols and monitoring.
How It Works
Sell contracts to property managers and businesses, then staff shifts with licensed guards. Track time and attendance, generate incident reports, invoice weekly or monthly, and manage recruiting and training. Cash flow management matters because payroll is weekly/biweekly while clients may pay net-30+. Scale comes from adding accounts, supervisors, and tighter scheduling systems.
BizBite verdict
Watch / verify
Security Guard Company maps to the Security Guard Company model. The category can work for acquisition buyers, but the right answer depends on source freshness, verified economics, and the specific red flags below.
Why it may work
- +SBA dataset shows 8 recent comparable loans
- +5 clear operating upside levers identified
Be careful
- !Source link status has not been verified yet
- !No last-checked date yet
- !Thin margin profile
Category operating model
Security Guard Company
Revenue drivers
- • Billable guard hours under recurring customer contracts
- • Hourly markup over wage, payroll tax, workers' comp, and benefits burden
- • Contract durability and renewal cadence by site or portfolio
- • Supervisor span of control and scheduling discipline
- • Mix of lower-margin static posts versus patrol, event, executive, or technology-assisted services
Key risks
- • Payroll runs before clients pay, so growth can consume cash even when P&L looks profitable
- • One underpriced contract with overtime can erase the profit from several good posts
- • Workers' comp experience modifiers and liability claims travel with the underwriting story
- • Guard licensing, armed-service rules, and supervision requirements vary materially by jurisdiction
- • Large consolidators can underbid commodity contracts while still paying premiums for clean regional platforms
What you need to believe
- The revenue is contract-backed and will transfer when the seller leaves.
- A buyer can replace the owner without creating overtime chaos or client churn.
- The current bill-rate stack leaves real margin after wages, payroll burden, and insurance.
- Compliance files and loss history are clean enough for financing and insurance renewal.
Unit economics
How one unit makes money
Modeled per one $2M local/regional guard company with ~55-70 full-time-equivalent guard posts. Every line shows its arithmetic — rebuild any number yourself.
Revenue build-up
| Line | Low | Base | High |
|---|---|---|---|
| Recurring static guard contracts~25-250 weekly posts x 40 billable hours x $28-$45 billed hourly x 50-52 weeks; renewal and cancellation language decide whether this is durable revenue or leased labor | $350K | $1.5M | $6.5M |
| Mobile patrol and alarm-response routes5-40 patrol stops per night x $250-$900 monthly account value plus alarm-response call-outs; route density and dispatch discipline create the margin spread | $50K | $250K | $1M |
| Events, temporary coverage, and premium assignmentsone-off coverage billed at premium hourly rates, but with higher recruiting/overtime risk unless scheduled from a flexible bench | $25K | $250K | $1.5M |
Where it goes — cost structure
- Guard wages and overtime55–72%
The core pass-through. Underwrite by posted shift, not by company-wide averages; overtime is where deals lie.
- Payroll taxes, benefits, workers' comp, and recruiting10–18%
Can move violently with state rules, armed/unarmed mix, turnover, and the workers' comp experience mod.
- Supervision, dispatch, scheduling, and back office5–10%
A weak scheduler creates overtime; a strong one is a profit center disguised as admin.
- Insurance, licensing, uniforms, vehicles, and equipment4–9%
Armed work, patrol vehicles, prior claims, and municipal licensing all push this higher.
- Sales, customer success, software, and general overhead4–8%
What actually swings the deal
- Bill rate minus loaded wage spread
$1/hour of lost spread across 60 FTE guard posts at 2,080 hours/year is about $125K of annual gross profit before any overhead response
- Overtime leakage
5% of hours slipping into time-and-a-half on a $2M book can cut 2-4 margin points unless contracts pass through overtime billing
- Customer concentration
A top customer at 25% of revenue is not just a churn risk — losing it can strand supervisors, vehicles, and dispatch overhead overnight
- Collections cycle
Moving from net-30 to net-60 on $2M revenue can absorb roughly one extra month of payroll float, often $120K+ of working capital
Benchmarks to memorize
A local guard company can grow very quickly until recruiting, scheduling, insurance, and payroll float become the constraint. Past roughly $3M-$5M revenue, the business either professionalizes into a regional platform or becomes a cash-hungry scheduling problem.
Market analysis
Who owns these & where demand comes from
Fragmented below the national platforms. Allied Universal, Securitas, GardaWorld, and similar consolidators dominate enterprise accounts, but property managers, construction sites, multifamily portfolios, hospitals, schools, and events still buy from local and regional operators when responsiveness matters.
Tailwinds
- ↗ Consolidators keep buying clean regional books with recurring contracts and compliance discipline
- ↗ Remote monitoring, GPS, and guard-tour software make smaller operators more professional than they used to be
- ↗ Labor-heavy complexity discourages casual entrants even though startup capex is low
Headwinds
- ↘ Wage inflation and guard shortages compress fixed-rate contracts
- ↘ Large platforms can underbid commodity posts or win national portfolio RFPs
- ↘ Technology can replace some low-value static posts with cameras, analytics, and remote response
- ↘ Insurance shocks after claims can reset profitability fast
Demand drivers
- Commercial real estate, multifamily, healthcare, retail, logistics, education, and construction site coverage needs
- Theft, vandalism, liability, trespassing, and workplace-safety concerns
- Insurance or lender requirements for on-site security at certain properties
- Events and temporary projects that need surge staffing
- Client desire for incident documentation, patrol reports, and visible deterrence
Regulation
State/provincial licensing, guard registration, armed/unarmed rules, background checks, training, insurance, and workers' comp compliance are central diligence items. Do not assume licenses transfer cleanly in an asset sale.
Who you bid against
Search funds and local operators bid on $500K-$3M revenue books, while strategic acquirers pay up only when contracts are diversified, assignable, compliant, and large enough to bolt into a regional platform.
Competitive advantage
What protects the good ones
- moderateContract-backed recurring posts
Written multi-site contracts with renewal language are valuable; handshake posts are just this month's schedule.
- strongRecruiting and scheduling machine
The operator who fills posts without overtime owns the margin. Buyers should value dispatch discipline as much as sales.
- moderateCompliance and loss-history cleanliness
Clean files, licensing, background checks, and low claims make financing, insurance renewal, and strategic acquisition possible.
Who wins — and who loses
The winner is a regional operator with diversified property-manager contracts, site-level gross-margin reporting, a real scheduling bench, clean guard files, and patrol/monitoring upsells. The loser is the charismatic owner filling shifts by text message, pricing at wage-plus-guess, and calling top customers personally every time a guard no-shows.
How this niche degrades
- ↘ Minimum-wage and overtime rule changes can turn fixed hourly contracts into negative-margin work
- ↘ Client concentration makes revenue look recurring until one property manager rebids a whole portfolio
- ↘ Remote camera monitoring and national-platform bids pressure commodity static posts
- ↘ Claims, guard misconduct, or licensing gaps can destroy insurance renewability and buyer confidence
Active. The top end is consolidating around global security platforms and PE-backed regionals, but sub-$5M revenue companies remain available when owners lack systems, succession, or capital for payroll float.
SBA 7(a) data
Real acquisitions in this category
Change-of-ownership loans · NAICS 561612 · Security Guards and Patrol Services
Deal size distribution
Financing profile
Recent comparable deals
| Closed | State | Loan | Implied deal |
|---|---|---|---|
| Mar 2026 | CA | $1.1M | $1.3M |
| Jan 2026 | MD | $1.2M | $1.4M |
| Jan 2026 | MD | $500K | $588K |
| Aug 2025 | CT | $4.2M | $5.0M |
| Jul 2025 | CA | $2.8M | $3.2M |
| Jul 2025 | IN | $190K | $224K |
| Jun 2025 | CO | $4.1M | $4.8M |
| May 2025 | TX | $2.4M | $2.8M |
| Dec 2023 | NV | $100K | $118K |
| Dec 2023 | NV | $2.1M | $2.5M |
Source: SBA 7(a) FOIA dataset, filtered to acquisitions (loans where business age is "Change of Ownership"). Implied deal size assumes an 85% loan-to-purchase ratio, a common SBA change-of-ownership structure. Charge-off rate shown only when 10+ loans have resolved (paid in full or charged off). Interest rates reflect last 24 months only. Actual deal values vary with equity injections, seller financing, and working capital terms.
Valuation framework
How these actually get priced
Small guard companies are valued on seller discretionary earnings after normalizing owner compensation, payroll burden, overtime, and one-time claims. Larger, systematized firms move toward EBITDA multiples because strategics can underwrite regional platform value.
What moves the multiple
- ▲ PremiumWritten, assignable contracts with low concentration
Multi-year or auto-renewing contracts across many sites can justify the high end of the SDE range.
- ▲ PremiumSite-level margin reporting and scheduling software
Clean job costing proves that reported SDE is not hiding overtime leakage.
- ▼ DiscountOwner-dependent sales, recruiting, or emergency coverage
If the owner is the scheduler of last resort, replace that labor before applying the multiple.
- ▼ DiscountClaims, licensing gaps, or poor workers' comp history
Insurance renewability is existential in this business; unresolved risk should hit both price and structure.
Worked example
At the BizBite midpoint of $2,000,000 revenue and a 10% SDE margin, normalized SDE is about $200,000. Applying the 1.9x midpoint multiple implies roughly $380,000 of enterprise value before working-capital needs. A clean, diversified, software-run book might stretch above that; a top-heavy book with overtime leakage should trade below it or require an earnout tied to contract retention.
Common buyer mistakes
- ✕ Buying revenue hours instead of gross-margin hours.
- ✕ Ignoring payroll float and then running out of cash while the company grows.
- ✕ Treating contracts as transferable before reading cancellation and assignment language.
- ✕ Normalizing away claims or workers' comp problems that will reappear in insurance renewal.
Deal Calculator
Priced off $200K SDE — can this deal service its own debt?
SDE = revenue × margin estimate for this niche; it includes owner compensation, so budget your salary out of cash flow. Excludes working-capital injection, capex reserves, and taxes. Actual SBA terms vary by lender and borrower.
Due diligence checklist
Before you sign anything
- 01
Build a customer-by-site gross-margin schedule for the last 12 months, including overtime and supervisor cost.
Company-wide margin hides bad contracts.
Red flagSeller cannot show profitability by site or the largest sites run below target margin. - 02
Read every material contract for term, renewal, assignment, price escalators, service-level penalties, and cancellation rights.
Recurring revenue only deserves a multiple when it survives a sale.
Red flagMajor accounts are month-to-month or cancellable without cause on short notice. - 03
Audit guard files for active licenses, background checks, training records, armed/unarmed authorization, and disciplinary history.
Compliance failures are both legal and insurance risks.
Red flagExpired licenses or missing files appear in active billed posts. - 04
Pull workers' comp EMR, loss runs, open claims, incident reports, and insurance renewal quotes.
Bad loss history can erase the earnings you thought you bought.
Red flagInsurance is non-renewing, excluded, or repricing sharply after close. - 05
Reconcile billed hours to payroll hours, timekeeping exports, and customer invoices.
This is where phantom revenue, uncompensated overtime, and owner-covered shifts show up.
Red flagManual edits, missing time punches, or billed hours that do not tie to payroll. - 06
Interview top customers and supervisors about why they stay and what would cause them to rebid.
Transferability is qualitative but testable.
Red flagCustomers say they stay because of the seller personally, not the company.
Pros
- +Recurring B2B contracts with clear renewal cycles
- +Scales quickly by adding guards and supervisors
- +Diverse verticals (construction, multifamily, retail, events)
- +Upsell paths into mobile patrols, monitoring, and tech
Cons
- -Thin margins and heavy payroll administration
- -High turnover and constant recruiting pressure
- -High liability and workers' comp exposure
Best For
Operators strong in recruiting, scheduling, compliance, and risk management
Operating Costs
Payroll is typically the dominant cost (often 70-85% of revenue), plus workers' comp, general liability, uniforms, background checks, training, dispatch/timekeeping software, and supervisor overhead. August 22, 2026 recheck: BizBuySell's current industry table shows security businesses at roughly a 2.86x earnings multiple and a $899.5K median sale price. BizBite uses a wider 1.8-3.2x SDE range to recognize that unprofitable contracts, customer concentration, and weak supervisor coverage belong below the benchmark, while clean recurring books can earn a modest premium; the 10% margin remains deliberately conservative for this payroll-heavy model.
Where to Buy
Search security guard, patrol, and private security service businesses for sale
Browse security guard service businesses for sale
Security company listings from a specialist broker
Buyer's Toolkit
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