How Much Does A Security Company Charge Per Hour

How Much Does A Security Company Charge Per Hour

How Much Does A Security Company Charge Per Hour – One of the most asked questions by security guard companies, especially newbies, is “How do I price my services?” Many times, they ask “Is X dollars an hour too much?” I always respond with the same answer which is “it depends”. So here’s how you figure out your billing rate for your security guard service.

As you know, not pricing your services properly is one of the fastest ways to put yourself out of business. Either because 1) you price your services far above the “normal” price range that buyers expect and no one will contract with you; Or 2) you’re not charging enough and you’re losing money on your contract…or what security guard company owners call “paying the customer to work on their site”.

How Much Does A Security Company Charge Per Hour

How Much Does A Security Company Charge Per Hour

The method most companies start with is what I would call simple markup pricing. What companies do with simple markup pricing is take how much they pay their security officers and mark that number up to X percent. So if they are paying their security officers $15 an hour, they can mark that number up to 50% and their billing rate is $22.50. The problem with that pricing method is that you’re doing nothing more than guessing what your price should be. And if you’re using this method, right now you’re probably 20% confident in how you’re pricing your contracts or what your competitors are pricing.

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So let’s talk about the right way to price your contract, and that is to use cost-plus pricing. Cost plus pricing is a pricing method where a fixed percentage is added on top of the cost to produce one unit of the product—the resulting number is the selling price of the product. In your case that product is one hour security guard service. So what does it cost to create 1 hour security service?

To calculate your billing rate you have to take into account everything you put a security officer on site for an hour. Those things include:

Literally, everything that is put on the site to that authority. There are a lot of calculations that go into determining your billing rate, but ultimately, you’re trying to determine what each of those costs is per hour. Once you have those costs, you add them up to get your total direct costs. And once you have your total direct costs, you can tack your profit margin on top of that number to get a meaningful billing rate.

Let’s look at some simple examples to get you started. So let’s start with a wage rate of $15.00. To that wage rate let’s add your FICA tax which is 7.65% at the time of recording.

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7.65% of $15 is $1.15. So your billing rate is now your wage rate of $15 plus Fica tax of $1.15 which is $16.15. Next let’s add your state’s unemployment tax which we’ll say is 2.5%. 2.5% of 15 is $0.38. Now your billing rate is $16.53. That process continues for all your insurance, taxes, etc. If you don’t know what those numbers are, you can contact your CPA and your insurance company to get those numbers. Next you’ll want to do the same for your direct expenses like uniforms, security guard management software, cell phones, etc.

After all those calculations, let’s say $16.66 is your fully loaded price for your billing rate. Once you have those costs, you add your profit margin to that number. Generally speaking, profit margins in the security industry range from mid-single digits to low double digits, although there are some outliers. Once you add up your profit margin, you now have a fully burdened billing rate that you can rely on.

There are many more components that go into determining the cost of your services such as turnover, depreciation, non-billable overtime, etc. We won’t go into it but take care of it for you.

How Much Does A Security Company Charge Per Hour

1) You may price your services too far outside the “normal” price range that buyers expect and no one will contract with you; Or

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Cost plus pricing is a pricing method in which a fixed percentage is added on top of the cost of an hour of security guard service.

Finally, if you have questions or comments, please leave them below as I try to answer all comments and questions that I receive. Happy hunting and stay safe.

Partnered with OfficerReports.com to provide a pricing tool that can be used by national companies as well as startups. We often hear how much cyber security incidents cost an organization. Excellent previous studies on this topic [1][2] have proposed a cost structure for cyber security incidents. The factors that contribute to the cost are often the same: detection, control and response, recovery, notification, disruption of operations, loss of business, etc.

The purpose of this article is not to reinvent the wheel on cost structure, but to present another way to structure costs, and rationalize what the right number is to use. This is important to think about because incident costing is the cornerstone of many (if not all) cyber risk management decisions. This will be explained in more detail in future articles.

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Now back to the topic at hand. The cost of a cyber security incident can be structured as the figure shown below for risk management purposes.

On the left is “Sunk Cost”. The terminology of Arthashastra is borrowed here to mean the cost incurred at the time the event occurs and before the investigation of the event. It cannot be avoided by any decisions taken by the organization thereafter.

It could be something tangible in financial terms, like lost bitcoins, lost funds to a phishing scam, or a shock bill from a cloud provider over CPU/network resource usage. There are also intangible business interruptions such as service becoming unavailable and customers unable to place orders.

How Much Does A Security Company Charge Per Hour

A sunk cost is specific in that the organization can do little to influence its extent after the event occurs. How much data/assets were lost and how much business was disrupted largely depended on the actions taken by the attacker (or pure luck).

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Some may argue that certain security controls can limit the damage. For example a network segmentation scheme or database encryption can reduce the number of affected hosts and data loss. It is important to note that these controls (decisions) were made before the event occurred, so they are not variable during or after the event. E.g. The database cannot be encrypted after the incident to limit the damage.

At the center is the cost of restoring a disrupted business service after that event occurs. These include detection and control, management and integration, parts replacement, rollback/restore, and root cause analysis.

The point to note here is that this service restoration attempt is not to completely restore the previous service

State (as you would expect from a service management perspective). Conversely, the restore service must be restored to functional

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For example, when an ATM in a bank is compromised with rogue software through a USB port opening, an attempt to restore service may not reload the ATM with a clean image and restart the ATM service. Immediate measures will be implemented to prevent similar risk, such as physically disconnecting USB ports, removing/relocating ATMs to remote locations and increasing the frequency of security patrols at ATMs.

It doesn’t make sense to restore a service to a previous working state where the same threat could immediately trigger the incident again. This is why “short term improvement project costs” must also be included in the restore service cost. These short-term fixes provide stop-gap controls to counter the same risks that caused the incident in the first place.

After all the short-term remedial actions have been taken, there are still long-term costs to deal with. One of the most obvious is strategic reforms. These are actions that take months to years to complete and can simultaneously address the root causes of multiple incidents and other risks and operational problems.

How Much Does A Security Company Charge Per Hour

Using the ATM example above, a strategic improvement could be upgrading all ATMs to a more tamper-proof model or implementing application whitelisting on the ATM OS. Actions will address other threats such as intrusion through other ports and hacking from the network and may also help resolve operations issues such as end-of-support software/hardware.

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The cost of long-term remediation varies greatly due to different implementation strategies and their resulting residual risk. Future articles will explore how to make risk decisions on remediation strategies.

Besides remedy, another necessary evil is audit costs. It is important to have an independent opinion on the correctness of the root cause analysis and the effectiveness of the remedy. A fresh pair of eyes can identify loop holes and unstable assumptions that the operations team might miss. These audit costs include auditor costs and internal costs

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