This past week, we conducted an amazing and informative webinar with Jack Goldsborough of Whitehaven Advisors and Jeff DiDomenico of Valiant Solutions on how to benchmark your growth in the security industry. In the webinar, Jack and Jeff talking about the current market and the impact of technology on Security Workforce Management. Most importantly, Jack introduced the Security Growth Curve and the Maturity Matrix, which companies can use to help grow their business.
We had a lot of great questions, so we thought we’d outline a few of Jack’s responses here:
Q: If you were starting a contract security services firm, what would be the first three investments you would make?
Jack: Great Question. I would have to go first with the right systems. You have got to get the basics down to run operations efficiently, manage your employee’s availability, and have effective Time and Labor management to schedule assignments, and drive accurate payroll and billing. The second thing you need is a basic marketing structure. Once you have streamlined your operations, you want to communicate your capabilities to the marketplace – marketing is essential do to this. The third thing is the right infrastructure. This means the right people at all levels of the business, combined with the right processes and the right tools, these three areas are where the first investments need to be made.
Q: Excellent webinar! How are banks treating financing to the small, medium, and startup security companies?
Jack: They are going to look at it in the traditional ways that the commercial lenders look at it from any other industry. It’s a risk-based decision; just as if you were going to apply for a mortgage, the banks are going to look at your income, profits, or any exposure to risks, etc. You need to look at your company and check to see if your financial reporting is properly in place. The banks will want to know how you’re going to run your business, so they have an assurance that you are going to meet your loan commitments and to be able to pay it back in a timely manner.
Q: How can we measure our company’s individual performance in the form of Return on Investment (ROI) to the organization?
Jack: This is a great question. First, you must have the systems and metrics in place to identify ROI. Simply put, ROI is the profitability measure of how the outflow of expense for the organization compares against the inflow of revenue and cash flow. So as an example. I was asked a short while ago on one company’s decision to purchase a workforce management system and, even at level one style company, they need to look at the payback period for that investment. Any technology, whether it is workforce management systems, payroll management systems, time and labor management system, or HR management systems, need to be considered an investment in your operational future. There are analytical tools we have that showed them a payback ROI in 13-18 months on their workforce management system. Similarly, personnel investments, such as hiring a VP of Operations, an HR Directors, or Marketing resources, should also factor in a payback analysis to see your ROI.
Q: What would you consider the hottest vertical markets for a security guard company?
Jack: Schools yes but that’s a difficult market. One of the hottest vertical markets at the moment is actually the cannabis industry. With schools, there is a heightened level of attention and investment, and unfortunately, it’s sad that we must again have a conversation around this subject – with its renewed national attention. There is a continued debate about arming teachers, and the consulting I’m seeing on this is not so much in arming teachers or hiring security guards, but rather more utilization of off duty officers or recently retired officers who have greater training and experience involving the use of firearms in these situations. So, while attention is still needed on schools, the cannabis industry represents a growing market with a distinct need for security.
Q: Is this growth curve only intended for companies looking to get sold? Or can it be useful for companies just looking to grow (with no exit in mind)?
Jack: The quick answer is no – [the Maturity Growth Curve] is for all companies, especially those such as family businesses with generational succession –to ensure you can plan how your company will grow from one generation to another. Exit is not always the goal – it’s about generating market value for returns on your goals. For anyone investing in your business, the real plan is to generate wealth for yourself, family, employees, and the business.
Q: Recruitment and retention are the arguably the most difficult tasks for a security guard company, so do you plan to address this in a future webinar?
Jeff: We had the same feeling, and it’s a challenging time in the industry. When you have to compete with the big box stores and major brands that are offering competitive wages, and the security guard brand position needs to be elevated, turnover is a real challenge. We actually have a webinar and a paper that touches on this which we did in March. You can access the on-demand version of that webinar here:
Q: What can I do to get more clients, and how do I better position myself against the competition?
Jack: That’s the $64 question, isn’t it? You need to be looking about what you’re offering today and identify what your clients and the marketplace is asking for – where is there a gap. Also, look at who is competing with you in the marketplace and what services they’re offering. Do a little competitive analysis to see how your company matches up. Another approach is conducting a market survey – what are companies looking for in services from a security firm, and how are competitors addressing may be meeting this (or not).
Q: Can a person be in a higher level, with smaller size? So, if we have technical capabilities and streamline operations, but we prefer to keep to a small niche and client base?
Jack: Absolutely! The one thing that we maybe didn’t touch on enough is that technology is the great equalizer for any business. There are many technologies that the bigger firms use that smaller business can also take advantage for their offering. So you can adapt technologies that we covered into a smaller niche markets, such as a gated community Technology solutions like robots, LiveSafe, drones and others like it present opportunities you can leverage those into your business to innovate and grow to higher levels. The important thing is to think outside of the box – as strategies to differentiate yourself will be a key component to growth!