How can I tell if a security guard company is actually profitable?

A guard company is mostly labour. Revenue comes from hours billed to clients, and most of the cost is the hours paid to guards. That makes the gap between the two the number to study. Total revenue and a bottom line on one page will not show you which sites carry the business and which quietly lose money. Ask for the detail behind them.

Start with the spread on each contract

For every site, ask for the hourly rate billed to the client and the loaded cost of the guard posted there, including payroll costs and benefits. Then look at the difference. Contracts signed years ago at old rates may no longer cover today’s wages. Ask when each rate was last reviewed and whether the contract lets the company pass on cost increases.

Look for hours that leak

• Overtime and holiday cover that is paid but not billed at a matching rate.
• Hours worked for clients that were never invoiced or were credited back.
• Training, orientation and travel time the company absorbs.
• Sick call-outs filled at premium pay.

Count the overhead and the owner

Supervisors, patrol vehicles, uniforms, radios and software sit between the guards and the profit. Ask which are included in the figures you are shown. Then ask whether the owner fills shifts or covers call-outs personally. If so, that labour is unpaid in the books, and a buyer who hires someone to do it will see the real cost. Our page on what to check before buying a security services company covers contracts and staffing in more depth.

Compare the books to the bank

Ask your accountant to match invoices to deposits and payroll records, and to explain any gap. Late-paying clients and disputed invoices matter in a business that pays its guards every period. This is about reading the numbers you are given. It does not tell you what the company is worth or what to pay.