Entrepreneurs can choose one of several business models when interested in developing a business that revolves around security systems. The company can sell and install security systems that are monitored 24/7 by staff employed by the security business. Another option is for the business owner to outsource the monitoring service on a contractual basis. Yet another route is to sell and install security systems that are not monitored. There are also security businesses that only sell alarm systems that the customer self-installs and self-monitors. The business with the greatest sales potential is the one that sells monitored systems because customers pay a monthly or annual amount for the service, meaning the sales process generates repeat business by design. All three types of security systems businesses can grow by offering equipment and software upgrades, adding additional services as the business grows, and expanding into new markets.

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A business plan written specifically for the startup up a security systems business will present the business model chosen, and the choice influences the amount of capital needed. Businesses offering monitored systems require more equipment and more personnel than operations that do not offer monitoring contracts. However, every business needs room for product displays, product and supplies inventories, computers, installation equipment, technician vehicles, and so on. It is likely the startup will need to find investors or lenders because this is a capital intensive business. The business planning process for security systems will include the information investors need for decision-making.

The following topics are just a few that need to be covered in the security systems business plan:

  • Will the company distribute branded products or develop a unique brand?
  • What type of products and services will be offered, and what makes them unique in comparison to the competition? Do products and services include fire alarms, instruction detection, security alarms, TV and video surveillance, and access control for example protocol X.509?
  • Will the company target both commercial and residential customers?
  • How will the business maintain technological currency to ensure systems remain state-of-the-art?
  • Which companies are in direct competition with the proposed or expanding business?
  • What type of customer contracts are offered, i.e. time period, amounts, options, financing, etc.?
  • What are the terms of the warranty and service contracts offered to customers?
  • What type of staffing is required and what is the personnel budget?
  • What licenses are required and what agreements are in place with local emergency, fire, and police departments?
  • How much financing is needed to cover capital equipment expenses including for service technician vans, tools, computer equipment, inventory, and so on?
  • What is the projected year of profitability?
  • What marketing and sales strategies will be utilized?

A business owner will need to purchase adequate business liability insurance, have a plan for providing staff ongoing technical training, and ensure the business is able to meet all legal requirements. The marketing and sales plan is critical to future success and a variety of venues can be used. Most companies today have websites, but security systems businesses frequently advertise on television and in newspapers and magazines. There has to be adequate trained sales people to meet with consumers interested in buying the system or to promote and sell to commercial clients. This particular industry is highly competitive, so successful business development requires laying out a clear and differentiated path to success.

Successful startup or business expansion begins with developing a quality security systems business plan that can provide a path to sustainability and raise appropriate financing. OGS Capital can help small to medium size businesses reach their goals by providing consultative services focused on developing a successful operating plan. Experienced business consultants are easily reached by submitting the online contact form.

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