Security Service Running Costs
Running a Security Service requires high fixed overhead, primarily driven by specialized personnel and infrastructure Expect initial monthly base running costs around $125,000 in 2026, before variable costs like sales commissions and vehicle operating expenses (OpEx) Your total variable costs start high at 260% of revenue, meaning you need significant scale quickly to cover the fixed base The model shows breakeven takes 17 months (May 2027), requiring a minimum cash buffer of $831,000 to survive the ramp-up We break down the seven core recurring expenses, from the Security Operations Center (SOC) lease to direct personnel benefits, giving founders the data needed to manage cash flow effectively
7 Operational Expenses to Run Security Service
| # | Operating Expense | Expense Category | Description | Min Monthly Amount | Max Monthly Amount |
|---|---|---|---|---|---|
| 1 | SOC Lease | Fixed | The Security Operations Center Lease is a fixed cost of $12,000 per month, essential for 24/7 monitoring and dispatch capabilities | $12,000 | $12,000 |
| 2 | Office Rent | Fixed | General administrative office rent adds $5,000 monthly, separate from the specialized SOC facility cost | $5,000 | $5,000 |
| 3 | General Business Insurance | Fixed | Liability and general business insurance are critical for a Security Service, costing a fixed $2,000 per month | $2,000 | $2,000 |
| 4 | Personnel Benefits & Uniforms | Variable | Direct security personnel benefits and uniforms represent a variable cost starting at 50% of revenue in 2026 | $0 | $0 |
| 5 | Sales Commissions | Variable | Sales Commissions and bonuses start at 80% of revenue in 2026, incentivizing client acquisition and growth | $0 | $0 |
| 6 | Digital Marketing Campaigns | Mixed | Digital marketing campaigns are budgeted as a variable cost, supplementing the $150,000 annual fixed budget | $12,500 | $0 |
| 7 | Mobile Patrol Vehicle Operating Costs | Variable | Operational costs for the mobile patrol fleet (fuel, maintenance) are variable, starting at 30% of revenue in 2026 | $0 | $0 |
| Total | All Operating Expenses | All Operating Expenses | $31,500 | $19,000 |
Security Service Financial Model
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What is the total monthly running cost budget needed to operate sustainably in the first year?
You need $125,383 per month just to cover your fixed overhead and payroll before you spend a dime on variable costs like fuel or supplies. Understanding this baseline burn rate is crucial for runway planning; for a deeper dive into initial setup costs, check out How Much Does It Cost To Open And Launch Your Security Service Business?. Honestly, this number is your absolute floor for sustainable operation in year one.
Fixed Overhead Component
- Fixed overhead is set at $26,300 monthly.
- This covers necessary base operating expenses.
- It excludes personnel costs and variable job expenses.
- This cost exists whether you land one client or fifty.
Payroll Burn Rate
- Payroll represents the bulk of your required cash, totaling $99,083.
- This expense drives your minimum monthly requirement significantly.
- You must secure revenue to cover this before variable costs hit.
- If onboarding takes 14+ days, churn risk rises on these high fixed labor costs.
Which recurring cost categories represent the largest percentage of total operating expenses?
For the Security Service business, personnel costs and the Security Operations Center (SOC) infrastructure lease are the two biggest recurring drains on operating expenses right now. If you're looking at the near-term profitability picture, you should defintely check out recent analysis on whether Is The Security Service Business Currently Profitable? These two line items alone set your baseline burn rate before factoring in sales or marketing.
Personnel Costs Drive OpEx
- Personnel costs stand at $99,083 per month.
- This is the largest single operating expense category.
- Focus on guard utilization rates immediately.
- High personnel spend requires high service density.
Fixed Tech Overhead
- The SOC infrastructure lease is $12,000 monthly.
- This represents a significant fixed cost component.
- Ensure technology investment scales with client load.
- Review lease terms closely before renewal dates.
How much working capital or cash buffer is required to reach the projected breakeven point?
The Security Service requires a minimum cash buffer of $831,000, which the model predicts you'll need 17 months before reaching positive EBITDA in April 2027. If you're planning your initial runway, you should defintely review how to structure your launch; Have You Considered The Best Strategies To Launch Your Security Service Business? This required capital covers the cumulative cash burn until the operation generates enough cash flow to sustain itself.
Runway Calculation
- Minimum cash needed is $831,000.
- Positive EBITDA projected for April 2027.
- This requires a 17-month cash runway buffer.
- This covers all cumulative operating losses.
Actionable Focus Areas
- Prioritize subscription sign-ups immediately.
- High fixed costs mean slow growth drains cash fast.
- Monitor customer acquisition costs closely.
- Every delay in reaching scale increases the required buffer.
If revenue targets are missed by 30%, what costs can be immediately reduced without impacting service quality?
If revenue targets are missed by 30%, immediately slash discretionary variable spending, primarily by dialing back the digital marketing budget, and pause hiring for roles not directly supporting current service delivery, as detailed in resources covering security service owner earnings, like How Much Does The Owner Of Security Service Business Typically Make? This protects the core subscription revenue stream and maintains the quality of your integrated security ecosystem while you address the shortfall; defintely don't touch guard scheduling or core monitoring infrastructure.
Slash Discretionary Marketing Spend
- Cut 50% of the digital marketing campaign budget instantly.
- Marketing spend currently consumes 50% of gross revenue.
- Reallocate funds only to proven, low-cost customer acquisition channels.
- Protect variable costs tied directly to service fulfillment, like patrol mileage.
Freeze Non-Essential Headcount
- Delay hiring any additional Sales Managers or administrative support.
- These roles are not critical for maintaining the current Sentry-Stack service quality.
- Require existing sales staff to focus only on upselling current clients.
- Review all technology contracts for immediate downgrades or cancellations.
Security Service Business Plan
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Key Takeaways
- The minimum monthly base operating cost for a security service in 2026 is approximately $125,000, driven primarily by personnel salaries and fixed overhead before variable expenses are factored in.
- Due to high initial fixed costs and substantial variable expenses, the financial model projects a breakeven point requiring 17 months of operation, setting the target date for May 2027.
- Founders must secure a minimum working capital buffer of $831,000 to manage the initial operational burn rate until the business achieves positive EBITDA.
- Personnel costs, totaling nearly $100,000 monthly, represent the largest single recurring expense category, significantly outweighing fixed infrastructure costs like the $12,000 SOC lease.
Running Cost 1 : SOC Lease
SOC Fixed Cost
The Security Operations Center Lease is a non-negotiable fixed cost of $12,000 monthly, critical for maintaining 24/7 monitoring and dispatch services required by your subscription model. This expense underpins your core operational reliability.
Fixed Monitoring Cost
This $12,000 monthly lease covers the specialized facility needed for continuous Security Operations Center (SOC) functions. To budget accurately, you need the signed lease agreement defining the term length and any required upfront capital expenditures for setup. It sits alongside $5,000 for office rent as essential fixed overhead.
- SOC Lease: $12,000/month
- Office Rent: $5,000/month
- Insurance: $2,000/month
Managing SOC Overhead
Since this is a fixed lease, direct monthly savings are difficult unless you renegotiate terms or co-locate services. Avoid the common mistake of underestimating the build-out costs associated with the specialized space. If you can negotiate a longer commitment, you might defintely secure a lower effective monthly rate, maybe saving 5% annually.
- Lock in longer lease terms.
- Scrutinize required tech build-out.
- Check industry benchmark rates.
Break-Even Link
This $12,000 fixed cost must be covered by service gross profit before you cover variable costs like personnel benefits (starting at 50% of revenue) or sales commissions (starting at 80% of revenue). Know your required revenue threshold just to cover this lease alone.
Running Cost 2 : Office Rent
Admin Rent Fixed Cost
General administrative rent is a fixed overhead of $5,000 monthly, distinct from your mission-critical Security Operations Center (SOC) lease.
Separating Facility Costs
This $5,000 covers back-office needs like HR and finance, not the specialized $12,000 SOC lease. To budget accurately, treat this as baseline fixed overhead separate from operational facilities. You need quotes for 12 months to establish the annual fixed commitment of $60,000 right away.
- Separate admin rent from SOC lease.
- Budget $60,000 annually fixed.
- Use quotes for lease term.
Managing Fixed Space
Admin rent is tough to cut once signed, but initial negotiation matters. Since this isn't the SOC, consider smaller, flexible co-working space initially. If staff is mostly remote, avoid signing long leases until headcount defintely justifies the footprint. A common mistake is over-committing space too early.
- Negotiate lease length upfront.
- Favor flexible space options.
- Avoid long commitments early.
Overhead Impact
Every dollar of this $5,000 must be covered by gross profit before you pay for variable costs like personnel benefits or marketing spend. This cost contributes directly to your required monthly sales volume to reach break-even.
Running Cost 3 : General Business Insurance
Insurance Overhead
For your Security Service, budget $2,000 monthly for required liability and general business insurance coverage. This fixed overhead is non-negotiable for operations starting day one.
Cost Calculation
This $2,000 covers general liability, protecting you if personnel cause property damage or injury. Since this is a fixed cost, you need firm quotes before launch to accurately map your initial operating expenses. It sits alongside your $12,000 SOC lease and $5,000 office rent.
- Fixed monthly premium.
- Covers basic operational risks.
- Essential for compliance.
Cost Management
You can’t cut this cost, but you can control its growth. Shop your policy annually, bundling it with vehicle insurance if possible. Avoid common mistakes like underinsuring your asset base or misclassifying personnel, which causes defintely massive premium hikes later. If onboarding takes 14+ days, churn risk rises.
- Shop carriers yearly.
- Bundle policies when possible.
- Verify coverage limits.
Key Distinction
General liability is separate from professional indemnity insurance, which covers errors in service delivery, like failing to spot a threat. You’ll need both to fully protect your firm.
Running Cost 4 : Personnel Benefits & Uniforms
Benefits Hit 50%
Your direct security personnel benefits and uniforms become a major variable drag, starting at 50% of revenue in 2026. You need to watch this cost closely as revenue scales, since it directly eats into your gross margin.
Cost Inputs
This covers mandatory benefits and required uniforms for your security personnel. You estimate this cost by multiplying projected revenue by 50% starting in 2026. It defintely sits within your Cost of Goods Sold (COGS), directly impacting gross profit per contract.
- Estimate based on revenue projections
- Applies only from 2026 onward
- Directly reduces gross margin
Optimization Tactics
Control this cost by negotiating bulk pricing for uniforms and standardizing benefit tiers across all personnel. Don't offer premium benefits until you hit scale, or you’ll lock in a higher variable rate sooner. Keep benefit structures simple to track.
- Negotiate bulk uniform pricing
- Standardize benefit tiers early
- Delay premium package offerings
Pricing Check
If 2026 revenue targets slip, this 50% variable expense immediately strains profitability. Remember, you also face 80% sales commissions and 30% vehicle costs that year, so your subscription pricing must absorb over 160% in variable operating costs.
Running Cost 5 : Sales Commissions
Commission Structure
Sales commissions are set aggressively high at 80% of revenue starting in 2026 to drive rapid client acquisition. This structure heavily favors top-line growth over immediate margin protection, demanding high average revenue per user (ARPU) to cover costs. You need serious pricing power here.
Commission Calculation
This cost covers sales commissions and bonuses tied directly to new subscription revenue starting in 2026. To estimate this, you need projected monthly revenue multiplied by 80%. This is a massive variable expense that will dominate your cost of goods sold (COGS) structure early on, so watch your gross margin closely.
- Inputs: Monthly Revenue × 80%
- Budget Fit: Largest variable cost post-personnel.
- Timing: Starts 2026.
Managing High Payouts
Managing an 80% commission rate means sales must close high-value, long-term contracts immediately. Avoid paying bonuses on revenue that churns within 90 days; tie payouts to realized, recurring revenue. Still, this high rate implies sales focus is purely on volume first, so be ready for rapid scaling.
- Tie bonuses to 12-month revenue realization.
- Ensure AOV supports the 80% payout plus other costs.
- Monitor marketing cost efficiency closely.
Growth Lever Check
With personnel benefits at 50% and marketing at 50% (both in 2026), total sales-related variable costs hit 180% of revenue if every sale requires maximum marketing spend and commission. The business model defintely requires high gross margins on the service delivery itself to absorb this sales friction.
Running Cost 6 : Digital Marketing Campaigns
Marketing Cost Structure
Digital marketing costs shift heavily to variable spend in 2026, set at 50% of revenue, which stacks on top of your existing $150,000 annual fixed budget. This means acquisition spending scales directly with sales volume, not just overhead coverage. Honestly, that's a big lever to pull.
Variable Spend Inputs
This 50% variable bucket covers customer acquisition via digital channels for your subscription services. To budget this accurately, you need a clear 2026 revenue projection. If you project $1 million in revenue that year, expect $500,000 dedicated just to digital marketing campaigns. This is defintely separate from your fixed $150,000 annual marketing allocation.
- Input: Projected 2026 Revenue
- Calculation: Revenue × 0.50
- Context: Scales with subscription growth
Controlling Acquisition
A 50% variable marketing cost is aggressive; focus ruthlessly on Customer Acquisition Cost (CAC). Since this cost is tied to revenue, you must ensure the Lifetime Value (LTV) of a new client significantly exceeds the cost to acquire them. High fixed costs like the $19,000 monthly overhead mean you need immediate, profitable sales to cover those base costs first.
- Benchmark LTV/CAC ratio above 3:1
- Test low-cost channels first
- Optimize conversion rates immediately
Action on Fixed Costs
Your fixed operating costs total $228,000 annually ($19k/month). Before scaling revenue to hit the 50% variable spend target, ensure your subscription model covers these fixed costs quickly. If you hit $500,000 in revenue, your total marketing spend is $400,000 ($150k fixed + $250k variable), which is too high for early stability.
Running Cost 7 : Mobile Patrol Vehicle Operating Costs
Patrol Variable Spend
Your mobile patrol operational costs, covering fuel and maintenance, are inherently variable. Expect these expenses to consume 30% of revenue starting in 2026. This cost scales directly with patrol volume, unlike fixed overhead like your SOC lease. That’s the baseline for modeling fleet efficiency.
Calculating Fleet Burn
This 30% figure covers daily consumables like fuel and necessary upkeep for your patrol vehicles. To budget accurately, you need inputs on projected patrol miles per client contract and the average cost per mile for maintenance. This cost hits immediately after revenue recognition, unlike fixed costs like the $12,000 SOC lease.
- Projected patrol routes.
- Average fuel efficiency (MPG).
- Scheduled maintenance intervals.
Controlling Mileage
To keep this variable cost under control, focus on route density and vehicle efficiency. Poor scheduling means more deadhead miles, driving up fuel spend defintely. Since this is a direct cost tied to service delivery, optimizing dispatch logic is crucial for margin protection.
- Mandate route density checks.
- Negotiate bulk fuel contracts.
- Standardize vehicle maintenance schedules.
Variable Cost Impact
Because fleet operating costs are 30% of revenue, they directly reduce your gross margin before accounting for personnel costs (50% benefits/uniforms). If you can drive that percentage down to 25% through better routing, that 5% drops straight to the bottom line immediately.
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Frequently Asked Questions
Base monthly running costs in 2026 are approximately $125,000, covering $99,083 in salaries and $26,300 in fixed overhead