Business Overview

Home security companies install and maintain security systems. Some companies charge an hourly rate only, while others charge hourly and flat-fees based on whether they have to travel to the customer’s location. Most security companies hire a team of electricians to perform installations. Owners are either electricians themselves or have a deep understanding of the trade.

Who is this business right for?

This business is ideal for people who want to work flexible hours but can also work odd hours. You must have a special interest in home and personal security, understand how various security systems can be defeated, and how to install systems so that they resist detection by criminals. This business can only be run by those with high ethical standards, as strict licensing is required, and for the obvious fact that the security business exposes a home or business’s vulnerabilities.

What happens during a typical day at a home security business?

Key day-to-day activities include monitoring customer accounts, installing new systems for clients, handling incoming service calls, and reducing attrition. In the home security business, it’s much cheaper to save a client account than it is to find a new one. So, a lot of time and money is spent on loss retention. A typical day may include several installation and service calls and multiple security-related calls.

What is the target market?

A good client is usually one that has a lot to protect. These are usually upper middle class families with small children. Security companies find it difficult to profit outside of this niche, meaning poorer neighborhoods are not good candidates for services, even though they may benefit from having a security system.

How does a home security business make money?

There are two models for this business: independent and franchised. An independent security company may charge whatever they wish for services (whatever the market will bear) while a franchise operation may dictate minimum and maximum charges for services.

However, average installation costs range between $600 and $1,200. Some companies advertise “free” equipment and then charge a higher monthly service fee to make up for it.

According to A Secure Life, the monthly costs for monitoring range from $10 on the low end to $100 for premium services.

What is the growth potential for a home security business?

According to a recent IBIS World’s Security Alarm Services market research report, average annual growth in this industry is 4.3%. Smaller companies typically focus on installation and outsource the monitoring service. As the business grows, a company may bring the monitoring side of the business in-house.