Free calculator for security company owners
How many contracts does a security guard company need to break even?
In a guard business, almost every cost moves with the hours you staff. Each contract leaves a thin slice after wages. Break-even is the number of average contracts that covers the office, insurance and supervisors.
Break-even point
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contracts a month to cover every cost
Profit at today's level
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per month, before owner pay
Cushion above break-even
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how many you could lose and still cover costs
The starting numbers are an example for a security guard company. Replace them with yours.
The worked example
Each contract brings in $14,000 a month and costs $11,200 to serve. That leaves $2,800 toward fixed costs of $18,000 a month. Divide one by the other and you need 7 contracts to break even. Every contract past that adds $2,800 to profit.
Ways to lower break-even in a security guard company
- Cut overtime by keeping a bench of trained part-time guards.
- Raise bill rates when wages rise, with an escalation clause in the contract.
- Drop contracts that need constant overtime to staff.
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