Deal Alert: Security Guard Service Business – $3.18M Revenue

📍 Location: Phoenix Arizona
💰 Asking Price: $750K (2.9x EBITDA)
📊 Revenue: $3.18M | Net Earnings: $252K (7.9% margin)

🌟 Why This Business is Great:

✔ Recurring Revenue & Long-Term Contracts: The business has 3-5 year contracts in place, ensuring stability and predictable cash flow. Government and institutional clients add to its resilience.

✔ Experienced Team in Place: With 70-80 guards and 7 key staff, including a trained COO managing daily ops, this business is not solely reliant on the owner—a big plus in acquisitions.

✔ Proprietary Security Software: Unlike many traditional security firms, this one has an in-house software system that tracks guards, reports analytics, and improves service efficiency—an edge over competitors.

✔ Diverse Client Base: They provide security for schools, real estate, hospitals, hotels, sports venues, and government entities, reducing risk from over-reliance on any one sector.

The Opportunity

The fundamentals are in place, but here’s how a buyer could increase margins and scale revenue:

🚀 Optimize Pricing: Margins are only 7.9%—raising rates and adjusting contracts could significantly improve profitability. Many security firms operate at 10-15% margins.

🚀 Expand into Janitorial/Porter Services: Many clients already need facility services, so adding janitorial contracts could be a high-margin upsell opportunity.

🚀 Leverage AI & Tech-Driven Security: The security industry is evolving with AI-powered monitoring and remote guarding solutions—introducing these could create new revenue streams.

🚀 Hire a Sales Team: Most security firms grow through direct sales and bidding on contracts—with the right sales strategy, this business could scale quickly.

🚀 Improve Digital Presence: Many security firms lack modern marketing. A stronger SEO, PPC, and LinkedIn outreach strategy could drive more inbound leads and direct contracts.

🔍 My Analysis: This security company presents a low-risk entry into a contract-based industry, making it a solid buy for the right investor. The asking price is reasonable at 2.9x EBITDA, and the business has strong operational infrastructure, reducing dependency on the owner.

However, margins are tight, and the owner still works ~28 hours per week managing HR and payroll, meaning a buyer may need either hands-on involvement or a licensed operations manager.

That said, the recurring revenue model, government contracts, and in-house software give this business a strong foundation. With pricing adjustments, service expansions, and tech-driven solutions, this could be a highly profitable and scalable investment.

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The 2024 Stanford Search Fund Study reports a median acquisition time of 20 months. Edgehill Management found and closed their acquisition in just 12 months — 40% faster — using Inven.

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