Looking for a security guard business plan? You're in the right place.
A guard company pays its officers every week and gets paid by its clients six or more weeks later. Before a lender or investor reads a word about your market, they want to know three things. How much cash covers that gap? What can you bill per hour once an officer's wages, insurance and supervision are paid? When does the company stop losing money? A template with empty tables won't show you what a sensible answer looks like.
This article walks through a complete sample plan for a contract security company in Atlanta, Georgia, from the executive summary to the five-year financials, so you can see how the pieces fit before you write your own.
What you can take from it:
- The executive summary: see how to state a $575,000 raise and what it buys on one page, so a reader knows the ask before the second paragraph
- The licensing and insurance section: learn which costs a guard company carries before it bills a dollar, and how to show a reader you've planned for them
- The bill rate against officer cost: find out how much of each billed hour is left after wages, payroll costs and bench time, and why that spread decides everything else
- The staffing and capacity tables: check that the officers on payroll can cover the hours you say you'll sell, and see which months of Year 1 run short
- The monthly view and the sensitivity table: spot the months when payroll runs ahead of collections, and size a reserve that survives clients paying in 60 days
- The five-year profit and loss, cash flow and balance sheet: follow how pay raises, hires and a bigger office change the margin
- The downside case: have an answer ready for "what if clients cut their hours by a fifth?", with the steps the owner takes in response
If you're setting up a guard or patrol company, read this before you build your own model. The company is fictional, so take what fits your market and change the rest.
In this plan
Looking for a security guard business plan template? The Toolkit builds yours with your own numbers.
The Business in Brief
Mill Haven is a contract security company that opens in northwest Atlanta on January 1, 2027. It posts uniformed officers at office towers, shopping centers and apartment communities, adds armed posts from February, sells mobile patrol of parking lots and vacant buildings from May, and staffs events. Founder Darnell Whitfield spent twelve years in Atlanta guarding, the last four as a branch operations manager. He holds 65% of the company.
The company raises $575,000: $125,000 of Darnell's savings, $150,000 from a private investor for 35% of the company, and a $300,000 bank term loan. Of that, $511,500 is a payroll reserve, $36,000 buys uniforms, radios, a patrol vehicle outfit and the office, and $27,500 pays for the Georgia license, legal work and the launch. The reserve takes 89% of the raise because officers are paid every week and clients pay about 45 days after the invoice.
| Year 1 | Year 2 | Year 3 | |
|---|---|---|---|
| Revenue | $1,252,920 | $2,239,000 | $2,696,000 |
| Net income after start-up costs | ($148,581) | $58,668 | $112,386 |
| Closing cash | $243,949 | $168,370 | $209,346 |
Two contracts are signed for the first week, together worth 1,100 post hours a month. By December the company bills 3,380 post hours a month on 11 contracts and patrols 16 sites. It loses money until August, because the fixed base of a dispatcher, a supervisor, insurance and an office has to be paid before enough posts are billing. Net margins before start-up costs run from 2.6% to 6.4% across Years 2 to 5.
A guard company lives on the gap between what it bills for an hour and what that hour costs, so the plan shows that spread for each service. An unarmed officer bills $31.00 and costs $21.57 once payroll costs and bench time are counted, a gap of about 30%. Supervisors, insurance, the office and the owner's pay come out of that gap.
If clients cut 20% of their hours in every year and Darnell holds back hiring, cuts marketing and his own pay, trims officer pay in step with hours and pays no distributions, the company stays cash-positive at every year end, but only just: Year 2 loses $25,212, year-end cash bottoms at $9,269 in Year 3, and the bank would be asked to relax its covenants until Year 3.
Mill Haven at Launch
Legal name: Mill Haven, LLC, a Georgia limited liability company. Owners: Darnell Whitfield, 65%, and one private investor, 35%, who takes no day-to-day role. Office: 1,100 square feet of office-flex space in northwest Atlanta, with a dispatch desk, a training table and a locked uniform and radio cage. Opening date: January 1, 2027. Stage: pre-launch. The company license application has been filed with the Georgia Board, the lease is signed, and two clients have signed contracts for the first week.
What the company sells
Trained, supervised officers on post, billed by the hour, with every shift covered or the company absorbs the penalty.
| Service | How it is billed | Year 1 share of revenue |
|---|---|---|
| Unarmed static posts | $31.00 an hour | 53.7% |
| Armed posts | $43.00 an hour | 23.5% |
| Events and special assignments | $37.00 an hour, four-hour minimum | 15.1% |
| Mobile patrol | $1,150 a month per site | 7.7% |
What the first two years are meant to deliver
- Eleven post contracts and 16 patrol sites live by December 2027.
- Monthly EBITDA positive from August 2027, and a profit after tax in 2028.
- Zero missed shifts attributable to the company in the first year, measured by the supervisor log and shared with every client each month.
- Interest-only on the bank loan for twelve months, then principal repayments from January 2028.
Georgia licensing
Georgia regulates private security through the Georgia Board of Private Detective and Security Agencies, which sits within the Secretary of State's office. The Board's rules provide for company licensure, employee registration and weapon permits, each with a non-refundable application fee, and for Board-approved training programs and instructors. The Board's rules also set firearms training and a pass mark before a weapon is issued; Rule 509-3-.08 does so for shotguns. Darnell is the qualifying individual; the Board's rules decide whether twelve years in Atlanta guarding meets its test. The company schedules armed posts only after each armed officer's registration and permit are issued, which is why armed hours start in February and not on day one. The Board's fees, bond or insurance requirement and training hours are not quoted here. The $7,500 licensing line and the 24 paid hours of pre-assignment training are Mill Haven's own budget figures, to be checked against the Board's current forms.
Atlanta's Guarding Market
What the national data says
The Bureau of Labor Statistics reports a median wage of $38,020 a year for security guards in May 2025 and projects employment growth of 1% from 2025 to 2035, slower than the average for all occupations. Mill Haven reads that as a market where growth comes from taking posts from other providers, or from clients who now rely on cameras or off-duty staff, and not from a rising tide.
What a guard hour costs and sells for
Wage pressure is the constant. Guards earn near the median, so officers can move to other entry-level employers for similar pay, and the plan's $17.00 an hour for an unarmed post is about 7% under the national median. Bill rates have to cover the officer's pay, payroll costs, and the hours an officer is paid but not billed. Unarmed posts are priced at $31.00, which is 1.8 times the wage, and armed posts at $43.00, 1.95 times. These are planning figures for an example company, and large multi-site accounts are usually priced tighter. Atlanta contract rates vary with the post, the schedule, the insurance a client requires and the length of the contract.
Who a client could hire instead
| Alternative | What it offers | Why a client picks it | How Mill Haven differs by design |
|---|---|---|---|
| National contract guarding firms | Large rosters, uniform standards, corporate insurance | One vendor for sites in many states | An owner who answers the phone at 2 a.m., joined by an on-call night supervisor from month 5 |
| Regional guard companies | Local officers at moderate rates | Familiarity and similar prices | A fixed monthly report and a written post order for every site |
| Small owner-run guard firms | Low rates, flexible hours | Price | Insurance limits and background checks that a property manager's counsel will accept |
| In-house staff | Direct control, no markup | Client keeps its own people | No payroll, no workers' compensation claims and no coverage worry for the client |
| Off-duty sworn officers hired directly | Visible authority | Deterrence at some retail sites | A predictable schedule and insurance in place |
| Camera and remote-monitoring services | Lower recurring cost | Cheaper than a 24-hour post | Patrol and posted officers where a person must be present |
The table describes categories and how Mill Haven positions itself, not a ranking. No firm is named because prices, contract terms and service levels change, and each publishes its own.
Where Mill Haven is strong and exposed
| Strengths | Weaknesses |
|---|---|
| Founder who has run an Atlanta guard branch and knows what clients complain about | One senior person: sales, licensing and client escalations all run through Darnell |
| Two contracts signed for the first week | Year 1 loses money and draws on the reserve, and thin margins lean on yearly price rises |
| Armed capability from month 2 and patrol from month 5, so a client can use one vendor | No bid-writing track record for government or institutional contracts |
| Reserve sized to the payroll float and to clients who pay in 60 days | High officer turnover is built into the model, not solved |
| Openings | Threats |
|---|---|
| Property managers who have lost patience with a no-show vendor | A national firm cutting its rate to win a flagship site |
| Armed and patrol add-ons for existing post clients | A single serious incident at a post and the claim that follows |
| Public and institutional bids once a record exists | Wage pressure from retail and logistics employers |
Who Buys Guards and Why
Property managers
The core buyer manages office towers, mixed-use buildings and multifamily communities for owners. One manager may hold 8 to 15 sites. A missed post is a tenant complaint, so reliability and fast replacement of a no-show matter more to this buyer than the last dollar of rate.
Retail centers and tenants
Shopping center owners buy evening and overnight posts and mobile patrol of parking lots. Individual tenants buy a daytime uniformed presence. Retail hours are uneven, so these posts are billed per shift with a minimum.
Event organizers and venues
Festivals, sports weekends, corporate functions and private events need crowd and access staff on short notice. They buy by the event, pay a premium rate and book again if the first one goes well.
The trigger for change
A missed shift, an incident that was reported late, a certificate of insurance that does not meet a lender's or tenant's terms, or an officer who was asleep on a camera. Contracts often change hands after one of these.
What buyers ask for
An officer on post for every scheduled hour, written post orders, a daily activity report, a named supervisor, proof of insurance with the client as additional insured, and a 30-day exit clause.
Winning Post Contracts
From first meeting to first shift
A site walk with the property manager, a written post order drafted from it, a quote within three working days, a contract with a 30-day exit clause and weekly or monthly billing, then mobilization within seven days. Darnell takes every site walk in Year 1. Each officer completes the pre-assignment training, budgeted at 24 paid hours, before the first shift.
The Year 1 funnel
About 120 first visits from the launch campaign lead to about 45 written proposals and nine new post contracts, a close rate of one in five, on top of the two signed before opening. Patrol is sold mostly as an add-on: 16 sites by December, 10 of them for clients who already have a post.
| Source of the nine new post contracts | Contracts | Share |
|---|---|---|
| Referrals from property managers and brokers | 4 | 44% |
| Direct visits and site walks | 3 | 33% |
| Trade association introductions | 1 | 11% |
| Requests for proposals from building owners | 1 | 11% |
Rate card
| Service | Year 1 rate | Notes |
|---|---|---|
| Unarmed post | $31.00 an hour | Holiday hours are billed at 1.5 times and sit inside the blended rate used in the model |
| Armed post | $43.00 an hour | Only after officer registration is issued |
| Event or special assignment | $37.00 an hour | Four-hour minimum per officer |
| Mobile patrol | $1,150 a site per month | Three scheduled visits a night, with a written check log |
Rates rise 4% a year at renewal under an escalator clause in each contract, a little ahead of the 3% pay raises. The model needs that clause: with no yearly rise it loses money from Year 2 (see the sensitivity table). Mill Haven also expects to lose about one post contract in six each year, mostly to a rival's lower rate, and sets new contracts against that.
Client concentration
In January the 24-hour tower post is about 59% of billings, since it is one of only two contracts. The company's rule is that no single client, counting all its sites, exceeds 20% of monthly revenue after month 12, and that a post is not accepted if it would breach that rule without the investor's agreement. By December the same post is about 15% of billings, and the nine new contracts in Year 1 are what bring the share down.
Keeping a post
Each client receives a one-page monthly report with hours billed, incidents, missed-shift count and a note on any officer change. Armed and patrol add-ons are offered at the third monthly review.
Getting in Front of Property Managers
What the money buys
Year 1 marketing is $32,000: $12,000 of launch spend paid from start-up capital and $20,000 of operating spend. That is 2.6% of Year 1 revenue; operating marketing alone falls to 0.7% of revenue by Year 5. Against nine new post contracts and 16 patrol sites, 25 new accounts in all, that is about $1,280 per new post or site, a little over one month of a patrol site's fee. Counting only new client relationships, about 15, it is about $2,100.
| Channel | Year 1 spend | What it is expected to do |
|---|---|---|
| Website, capability statement and uniform branding (launch) | $6,500 | A clear site with a quote request and a one-page capability statement |
| First 120 property-manager visits (launch) | $3,500 | Materials, travel and lunches to book site walks |
| Association launch events (launch) | $2,000 | Introductions through the local commercial real estate and property management chapters |
| Association memberships and events | $5,500 | Regular contact with the people who hire guards |
| Local search and Google Business profile | $4,800 | Quote requests for retail, construction and small buildings |
| Direct mail and email to managers | $3,200 | A quarterly note on patrol and armed posts |
| Proposal and bid preparation | $2,500 | Printing, site-plan drawings and bid-portal access |
| Client appreciation and referral thanks | $2,000 | A gift or lunch for each introduction that becomes a contract |
| Trade show and event presence | $2,000 | One regional security or property show |
Marketing milestones
- January 2027: two contracts live, license confirmed.
- May 2027: first patrol sites sold and the first referral from a property manager.
- September 2027: event season staffed from the part-time pool.
- December 2027: 11 post contracts, 16 patrol sites and about $151,600 of monthly revenue.
Running the Posts
Scheduling and call-outs
The scheduler and dispatcher builds the weekly roster every Wednesday and keeps a relief list. A call-out gets a replacement from the relief pool, then an overtime offer, then a supervisor on post. Overtime and holiday cover is budgeted at $16,000 in Year 1 because guard rosters never fill perfectly.
What an hour is worth
| Per billed hour, Year 1 | Unarmed | Armed |
|---|---|---|
| Bill rate | $31.00 | $43.00 |
| Wage | $17.00 | $22.00 |
| Payroll costs at 22% | $3.74 | $4.84 |
| Paid but not billed (80 of 2,080 hours) | $0.83 | $1.07 |
| Cost of one billed hour | $21.57 | $27.91 |
| Spread before supervision and overhead | $9.43 (30%) | $15.09 (35%) |
Supervisors, insurance, vehicles, the office and the owner's pay are covered out of that spread, and the model shows what is left.
Officers and supervisors
Officers on payroll at year end, not counting the event pool, are 22 in Year 1 and 41 in Year 5. The first field supervisor, for nights and weekends, starts in month 5, a day supervisor in month 13 and a second senior supervisor in month 40. Officers per supervisor at year end run at 22 in Year 1 and between 12 and 16 from Year 2; before month 5 Darnell and the scheduler cover the roster themselves. Every officer completes the Board-approved pre-assignment course, and armed officers complete firearms qualification and registration. In four months of Year 1, hours billed run 60 to 100 above what the officers on payroll supply, and overtime closes the gap.
Patrol
One patrol vehicle covers about 16 sites a night at three visits a site, 48 stops of about nine minutes each. Each visit is logged by a GPS check-in and a photo. The second vehicle is leased in month 13, when the 17th site is signed.
Technology
A guard-tour and incident-report app with GPS checkpoints, scheduling and payroll software, and a client portal for reports. Software is $13,000 in Year 1 and $24,000 by Year 5.
Insurance and bonding
General liability with assault and battery cover, professional liability, commercial auto, an umbrella layer and a fidelity bond, budgeted at $38,000 in Year 1 and about 3% of revenue in every year. Workers' compensation is carried in the 22% payroll on-cost and not in that figure. Key-person life and disability cover on Darnell is part of the insurance cost, since the license depends on him.
Licenses and standards
- Georgia company license, held through Darnell as qualifying individual.
- Armed officer registration through the employer, for each armed officer.
- Board-approved pre-assignment training for every unarmed officer.
- Written post orders, an incident log and a daily activity report on every site.
- Client certificates of insurance issued before the first shift.
The office and vendors
1,100 square feet in northwest Atlanta, $28,800 in Year 1, then about 1,500 square feet in Year 4. A uniform supplier, a radio and body-camera vendor, a vehicle lessor and a payroll service. All can be replaced.
The Leadership
Darnell Whitfield, founder and managing director
Darnell started as an unarmed officer in 2014, became a field supervisor in 2017 and ran the Atlanta branch of a national contract guard company from 2022 to 2026, with about 160 officers and 20 accounts. He holds the qualifying role on the Georgia company license. His $125,000 is nine years of savings. He is leaving to run a smaller company where he knows every client and every supervisor by name.
Where the team is thin
Darnell left his former employer on written terms that include a non-solicitation clause, which a lawyer has reviewed. The two launch contracts came from property managers who approached him after his departure, and the company does not contact that employer's other clients for the length of the clause. Darnell has not written a government bid, has not run payroll for a company he owns and has no experience with a claim that goes to litigation. Mill Haven covers these with a part-time bookkeeper from month 3, an outside CPA who reviews the books every quarter, an employment lawyer on retainer, and a standing referral of any serious incident to the insurer's claims team.
If Darnell is out
Darnell is the only qualifying individual at launch. The key-person cover is meant to carry the company while another qualified person is added to the license. The night supervisor hired in month 5 works toward the qualifications needed to hold that role.
Outside help
The private investor, a former commercial real estate broker, reviews quarterly numbers and introduces property managers but has no operating role. An independent insurance broker advises on limits at each renewal.
Ownership and the bank
Darnell owns 65% and the investor 35% of Mill Haven, LLC. The bank takes a personal guarantee from Darnell, a lien on company assets and a covenant to deliver quarterly accounts.
What a lender would still ask
- The two signed contracts: term, the 30-day exit clause and the wage escalator. With no yearly price rise the model loses $27,140 in Year 2; bill rates 5% lower lose $52,882.
- Concentration. The 24-hour tower post is about 59% of January billing and 15% of December's. Losing it in month 7 with no payroll response takes the Year 1 loss to $278,388, against $148,581 in the base case, and leaves equity at negative $3,388.
- The lawyer's review of Darnell's non-solicitation clause, since both launch clients are property managers in the market he worked in.
- The Board's approval date and the armed-registration timeline against a January 1 opening. A two-month delay turns Year 1 into a $221,837 loss with equity of $53,163; with 60-day payers the October balance is about negative $7,000.
- Why $511,500 sits in cash and not in a credit line. The SBA's working capital pilot asks for a year of trading, so Mill Haven would ask for a $100,000 standby line instead, and the reserve holds for 60-day payers with about $18,000 to spare at the low.
- Broker quotes for general liability with assault and battery, an armed endorsement, the umbrella and the fidelity bond, and a carrier's workers' compensation rate. None is in hand. Insurance 30% higher takes Year 2 cover to 1.49x, and officer on-costs three points higher take it to 1.19x.
- Debt cover of 1.87x in Year 2 before any shock, against a likely 1.25x test. Direct costs two points higher give 1.02x and the downside gives 0.28x.
- Collateral beyond $36,000 of equipment and the receivables. The SBA guarantee covers the lender's loss only in part, so Darnell's personal guarantee carries weight.
- The investor's return: $52,500 of the $150,000 paid out in Years 4 and 5 on his $150,000, no exit forecast, and 35% of $525,691 of book equity at the end of Year 5, which is $183,992. The case for 35% rests on Darnell's contracts, license and full-time work.
- Officer pay and turnover. Officers are paid $17.00 an hour, about 7% under the national median, and the recruiting budget from Year 2 allows for 60% turnover. Wages 10% higher with no pass-through lose $117,991 in Year 2.
The Five-Year Figures
Every table below comes from one five-year model: monthly for Year 1, annual from Year 2. The billing, pay and capacity figures come first, so each revenue and payroll line traces back to an hourly rate and a head count. A sensitivity table and a downside case close the section.
Funding and launch costs
| Use of funds | Amount |
|---|---|
| Uniforms, radios, tour wands and body cameras for the first 20 officers | $16,000 |
| Patrol vehicle outfit: light bar, camera, partition | $11,000 |
| Office furniture, dispatch desk and computers | $9,000 |
| Georgia company license, bond or insurance evidence, training and registrations | $7,500 |
| Legal: post-order and client contract templates, lease review, entity | $8,000 |
| Launch: website, capability statement, first 120 property-manager visits | $12,000 |
| Payroll reserve: officers are paid weekly, clients pay about 45 days after the invoice | $511,500 |
| Total uses | $575,000 |
| Source of funds | Amount |
|---|---|
| Darnell Whitfield's savings | $125,000 |
| One private investor (minority equity) | $150,000 |
| SBA-guaranteed bank term loan | $300,000 |
| Total sources | $575,000 |
Darnell Whitfield puts in $125,000 of savings and a private investor adds $150,000 for 35% of the company, which leaves Darnell with 65%. The owners' $275,000 is 48% of the $575,000 raise. A $300,000 bank term loan, guaranteed in part under the SBA's 7(a) program, supplies the rest: ten years at 11.0%, interest-only for the first twelve months, with a personal guarantee and a lien on company assets. The SBA's page on 7(a) loan types lists a 75% guarantee for loans above $150,000 and caps the rate on loans of $250,001 to $350,000 at the base rate plus 4.5%. The 11.0% is an illustration and not a lender's quote, the interest-only year is a term the lender would have to agree to, and the lender and the SBA set the final terms.
Equipment and start-up costs are only $63,500 of the raise. The $511,500 payroll reserve is the other 89%, because officers are paid every week while clients pay about 45 days after the invoice. Property managers' payables departments can run past the 30-day terms in a contract, which is why the model carries 45 days and not 30. Receivables stand at $154,470 at the end of Year 1 on the model's averaging, and the first seven months lose money at the EBITDA line before the post count builds.
The reserve is sized against the lowest approximate month-end balance (the model has no receivables timing, so each figure is an estimate): about $87,000 in September at 45 days, about $18,000 if clients average 60 days, and about $152,000 in August if they pay in 30. A two-month opening delay on its own leaves about $48,000. A delay together with 60-day payers takes the October balance to about negative $7,000, so the lender would be asked for a standby line. No revolving line is counted in Year 1: the SBA's working capital pilot, as its 7(a) page describes it, asks for at least one year of operating history.
Billing, pay and capacity figures
- Unarmed posts bill $31.00 an hour in Year 1, armed posts $43.00, and events and special assignments $37.00 with a four-hour minimum per officer. Mobile patrol is billed per site at $1,150 a month for three logged visits a night. Contract prices rise 4% a year from Year 2 at renewal, a little ahead of the 3% pay raises, through an escalator clause in each contract. The result depends on that clause: the sensitivity table shows the model without it.
- The bill rate is about 1.8 times the unarmed wage and about 1.95 times the armed wage. Large multi-site accounts are usually priced tighter than that, so Mill Haven targets small and mid-size sites where the client is buying a local response. Atlanta contract rates differ by post and are quoted privately, so every rate and wage in this plan is a planning figure to test against competing quotes.
- Unarmed officers are paid $17.00 an hour, armed officers $22.00, patrol officers $18.50 and the part-time event pool $17.50. The Bureau of Labor Statistics put the median wage for security guards at $38,020 a year in May 2025, about $18.28 an hour on 2,080 hours, so unarmed pay here is about 7% below the national median. That is deliberate, to fit Atlanta contract rates, and it is why the model allows for about 60% of officers leaving in a year, a planning figure, with the recruiting budget sized for replacements from Year 2. Every wage is more than twice the federal minimum wage of $7.25 an hour. Officers are non-exempt, so hours beyond 40 in a week are paid at one and a half times the regular rate.
- A full-time officer is paid for 2,080 hours and bills 2,000 of them. The other 80 go to orientation, the pre-assignment course (budgeted at 24 paid hours, the plan's own figure), uniform fitting and shifts with no client attached. Year 1 billed hours are set against the full 2,000. From Year 2 the model bills 98% of that capacity, which allows for the days between one post ending and another starting and for new officers in their first weeks.
- Quarter by quarter in Year 1, the unarmed officers on payroll supply 1,334, 1,834, 2,000 and 2,334 hours a month against billed hours of 1,100 to 1,400, 1,550 to 1,800, 1,900 to 2,100 and 2,200 to 2,400. Armed officers supply 333, 500, about 833 and 1,000 hours against 0 to 300, 400 to 560, 640 to 790 and 860 to 980. Four months run short: unarmed hours in March by 66, September by 100 and December by 66, and armed hours in June by 60. Overtime closes the gaps, with Darnell on post in March before the first supervisor starts.
- On-costs add 22% to officer wages: employer payroll taxes, federal and Georgia unemployment tax, workers' compensation at a security-guard classification, and a modest employer share of health cover. The split among those items is a planning figure, and workers' compensation on armed work is the least certain piece, so the sensitivity table adds three points. Supervisors and office staff carry 27% because their benefits are fuller; the part-time bookkeeper carries 15% and the event pool 18%. A carrier's quote would settle the workers' compensation rate.
- Overtime premium and holiday cover is $16,000 in Year 1 and rises to $56,000 by Year 5 as the officer base grows. Recruiting, background checks, drug screens and the pre-assignment training cost about $400 a hire, or $14,000 in Year 1. That covers about 35 first-time hires (22 officers, the event pool and three staff) and not replacements for officers who leave. The $18,000 to $28,000 a year after that covers 45 to 70 hires, enough for growth plus replacement at 60% turnover. Both are planning figures.
- One patrol vehicle covers about 16 sites on a night shift at three logged visits a site, 48 stops of about nine minutes each, and needs 1.75 officers once days off are counted for a ten-hour shift seven nights a week. Patrol officers start in months 5 and 8, a second vehicle is leased from month 13, when the 17th site is signed, a third officer starts in month 17 and a fourth in month 40, when the site count passes 27. The fee earns about $63 for each hour of the 1.75 officers' time that a full route needs.
- Event hours are seasonal in Year 1: spring festivals, a September to November peak around fall events and college football weekends, and quiet months in January, February and the summer. From Year 2 the model spreads event hours evenly, 5,600 hours in Year 2 rising to 7,400 in Year 5.
- Clients are invoiced weekly or monthly on net-30 terms, and the model carries 45 days of receivables. Officers are paid weekly, so the company funds between six and ten weeks of wages before the first payment from a new client arrives, depending on how often the client is invoiced. The engine applies the 45 days to each year's average revenue and has no receivables timing in its monthly view, so year-end receivables read lower than the latest billing implies. The month-by-month low below uses a stricter basis, 45 days of that month's revenue. Both are approximations, and the sensitivity table runs 30-day and 60-day payers.
- Insurance covers general liability including assault and battery, professional liability, commercial auto, an umbrella layer and a fidelity bond; workers' compensation sits in the payroll on-cost. The plan budgets $38,000 in Year 1 and about 3% of revenue in every year. Premiums for guard companies vary a great deal with claims history and armed work, so the figure is a planning number for a broker's quote to settle.
- Rent is based on 1,100 square feet of office-flex space in northwest Atlanta at about $26 a square foot a year, a planning figure, with room for the dispatch desk, a training table and a uniform and radio cage. The company moves to about 1,500 square feet in Year 4.
- Tax is charged at the federal corporate rate of 21% and a Georgia rate of 4.99%, the 2026 rate under HB 463. Georgia law schedules further cuts if revenue targets are met, so the rate could be lower by 2027. The Year 1 loss before start-up costs carries forward. The engine's tax base leaves out the $27,500 of start-up costs and does not apply the federal 80% limit on using carried-forward losses; the limit would shift a few thousand dollars of tax from Year 3 into Year 2. An S corporation election would move this tax to the owners' returns. Owner distributions of $50,000 in Year 4 and $100,000 in Year 5 are paid pro rata, and each is below that year's net income.
Revenue by service
| Revenue stream | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Unarmed static posts (billed hourly) | $672,700 | $1,043,000 | $1,216,000 | $1,401,000 | $1,600,000 |
| Armed posts (billed hourly) | $294,550 | $701,000 | $866,000 | $1,090,000 | $1,331,000 |
| Events and special assignments (billed hourly) | $189,070 | $215,000 | $248,000 | $283,000 | $320,000 |
| Mobile patrol (monthly fee per site) | $96,600 | $280,000 | $366,000 | $442,000 | $525,000 |
| Total revenue | $1,252,920 | $2,239,000 | $2,696,000 | $3,216,000 | $3,776,000 |
| Growth on prior year | – | 79% | 20% | 19% | 17% |
Unarmed posts are the base at 53.7% of Year 1 revenue, falling to 42.4% by Year 5. Armed posts grow from 23.5% to 35.2%, because they carry the higher spread per hour and each new one comes from an existing client that already trusts the company. Events are the most seasonal line and the smallest by Year 5, at 8.5%. Patrol is 7.7% of Year 1 revenue and rises to 13.9%, and its fee does not depend on how many hours an officer stands a post.
The first twelve months, month by month
| Month | Unarmed static posts (billed hourly) | Armed posts (billed hourly) | Events and special assignments (billed hourly) | Mobile patrol (monthly fee per site) | Total revenue | EBITDA |
|---|---|---|---|---|---|---|
| Jan 2027 | $34,100 | $0 | $4,440 | $0 | $38,540 | ($69,147) |
| Feb 2027 | $38,750 | $8,600 | $5,550 | $0 | $52,900 | ($55,527) |
| Mar 2027 | $43,400 | $12,900 | $11,100 | $0 | $67,400 | ($41,775) |
| Apr 2027 | $48,050 | $17,200 | $16,650 | $0 | $81,900 | ($28,023) |
| May 2027 | $52,700 | $20,640 | $18,500 | $4,600 | $96,440 | ($14,232) |
| Jun 2027 | $55,800 | $24,080 | $11,100 | $6,900 | $97,880 | ($12,867) |
| Jul 2027 | $58,900 | $27,520 | $11,840 | $9,200 | $107,460 | ($3,781) |
| Aug 2027 | $62,000 | $30,960 | $15,540 | $11,500 | $120,000 | $8,113 |
| Sep 2027 | $65,100 | $33,970 | $25,900 | $13,800 | $138,770 | $25,915 |
| Oct 2027 | $68,200 | $36,980 | $29,600 | $14,950 | $149,730 | $36,309 |
| Nov 2027 | $71,300 | $39,560 | $22,200 | $17,250 | $150,310 | $36,860 |
| Dec 2027 | $74,400 | $42,140 | $16,650 | $18,400 | $151,590 | $38,073 |
The company loses money at the EBITDA line through July and earns a positive EBITDA in every month from August, when the post count and the armed posts have grown enough to carry the fixed base. January is the hardest month: it opens with $38,540 of revenue against a payroll and fixed cost base built for more. September to November lift events to $29,600 in October. Month-end cash is thinnest in September, at about $87,000 after setting 45 days of unpaid invoices against the bank balance. That low is approximate, and Year 2 is not shown month by month.
Officers, supervisors and office staff
| Role | Annual wage | Starts | Year 1 end | Year 2 end | Year 3 end | Year 4 end | Year 5 end |
|---|---|---|---|---|---|---|---|
| Founder and managing director | $75,000 | Month 1 | 1 | 1 | 1 | 1 | 1 |
| Scheduler and dispatcher | $40,000 | Month 1 | 1 | 1 | 1 | 1 | 1 |
| Bookkeeper | $28,000 | Month 3 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 |
| Field supervisor (nights and weekends) | $46,000 | Month 5 | 1 | 1 | 1 | 1 | 1 |
| Field supervisor, day | $47,000 | Month 13 | – | 1 | 1 | 1 | 1 |
| Business development and account manager | $55,000 | Month 24 | – | 1 | 1 | 1 | 1 |
| Second senior field supervisor | $48,000 | Month 40 | – | – | – | 1 | 1 |
| Unarmed officers, from month 1 (8) | $35,360 | Month 1 | 1 | 1 | 1 | 1 | 1 |
| Unarmed officers, from month 4 (3) | $35,360 | Month 4 | 1 | 1 | 1 | 1 | 1 |
| Unarmed officers, from month 7 (1) | $35,360 | Month 7 | 1 | 1 | 1 | 1 | 1 |
| Unarmed officers, from month 10 (2) | $35,360 | Month 10 | 1 | 1 | 1 | 1 | 1 |
| Unarmed officers, from month 13 (2) | $35,360 | Month 13 | – | 1 | 1 | 1 | 1 |
| Unarmed officers, from month 19 (1) | $35,360 | Month 19 | – | 1 | 1 | 1 | 1 |
| Unarmed officers, from month 25 (1) | $35,360 | Month 25 | – | – | 1 | 1 | 1 |
| Unarmed officers, from month 31 (1) | $35,360 | Month 31 | – | – | 1 | 1 | 1 |
| Unarmed officers, from month 37 (1) | $35,360 | Month 37 | – | – | – | 1 | 1 |
| Unarmed officers, from month 43 (1) | $35,360 | Month 43 | – | – | – | 1 | 1 |
| Unarmed officers, from month 49 (1) | $35,360 | Month 49 | – | – | – | – | 1 |
| Unarmed officers, from month 55 (1) | $35,360 | Month 55 | – | – | – | – | 1 |
| Armed officers, from month 1 (2) | $45,760 | Month 1 | 1 | 1 | 1 | 1 | 1 |
| Armed officers, from month 4 (1) | $45,760 | Month 4 | 1 | 1 | 1 | 1 | 1 |
| Armed officers, from month 7 (2) | $45,760 | Month 7 | 1 | 1 | 1 | 1 | 1 |
| Armed officers, from month 10 (1) | $45,760 | Month 10 | 1 | 1 | 1 | 1 | 1 |
| Armed officers, from month 13 (2) | $45,760 | Month 13 | – | 1 | 1 | 1 | 1 |
| Armed officers, from month 25 (1) | $45,760 | Month 25 | – | – | 1 | 1 | 1 |
| Armed officers, from month 31 (1) | $45,760 | Month 31 | – | – | 1 | 1 | 1 |
| Armed officers, from month 37 (1) | $45,760 | Month 37 | – | – | – | 1 | 1 |
| Armed officers, from month 43 (1) | $45,760 | Month 43 | – | – | – | 1 | 1 |
| Armed officers, from month 49 (1) | $45,760 | Month 49 | – | – | – | – | 1 |
| Armed officers, from month 55 (1) | $45,760 | Month 55 | – | – | – | – | 1 |
| Patrol officers, from month 5 (1) | $38,480 | Month 5 | 1 | 1 | 1 | 1 | 1 |
| Patrol officers, from month 8 (1) | $38,480 | Month 8 | 1 | 1 | 1 | 1 | 1 |
| Patrol officers, from month 17 (1) | $38,480 | Month 17 | – | 1 | 1 | 1 | 1 |
| Patrol officers, from month 40 (1) | $38,480 | Month 40 | – | – | – | 1 | 1 |
| Event and relief officers (part time pool) | $18,270 | Month 1 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 |
| Total payroll incl. on-costs | $1,088,088 | $1,715,135 | $1,964,832 | $2,265,253 | $2,511,720 |
Darnell and a scheduler and dispatcher start together in month 1. The part-time bookkeeper joins in month 3, a night and weekend field supervisor in month 5, a day supervisor in month 13, a business development and account manager in month 24 and a second senior field supervisor in month 40. Each officer row is a cohort, so the number in brackets is its size and the year-end columns show 1 for every cohort on payroll. Officers on payroll at year end, not counting the event pool, are 22, 28, 32, 37 and 41, which works out to 22, 14, 16, 12 and 14 officers for each field supervisor. The event pool holds 2 to 10 part-time officers in Year 1 and 6 to 8 afterward. The table shows it as one half-time line, which makes revenue per full-time equivalent in the ratios table about $4,400 too high in Year 3, because the six pool officers work about 3 full-time equivalents. Darnell's $75,000 starts in month 1 and is already in the costs, so every profit line here is after he has been paid.
Profit and loss
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $1,252,920 | $2,239,000 | $2,696,000 | $3,216,000 | $3,776,000 |
| Direct costs (uniform issue, guard-tour software, range ammunition, patrol fuel) | ($64,613) | ($115,465) | ($139,033) | ($165,849) | ($194,728) |
| Gross profit | $1,188,307 | $2,123,535 | $2,556,967 | $3,050,151 | $3,581,272 |
| Payroll incl. on-costs | ($1,088,088) | ($1,715,135) | ($1,964,832) | ($2,265,253) | ($2,511,720) |
| Rent | ($28,800) | ($29,600) | ($30,500) | ($40,000) | ($41,200) |
| Utilities | ($4,000) | ($4,200) | ($4,400) | ($5,000) | ($5,200) |
| Marketing | ($20,000) | ($23,000) | ($24,000) | ($26,000) | ($28,000) |
| Insurance | ($38,000) | ($67,000) | ($81,000) | ($97,000) | ($113,000) |
| Professional fees | ($14,000) | ($15,000) | ($16,000) | ($17,000) | ($18,000) |
| Software subscriptions | ($13,000) | ($16,000) | ($19,000) | ($22,000) | ($24,000) |
| Overtime premium and holiday cover | ($16,000) | ($30,000) | ($40,000) | ($48,000) | ($56,000) |
| Officer recruiting, screening and pre-assignment training | ($14,000) | ($18,000) | ($22,000) | ($25,000) | ($28,000) |
| Patrol and supervisor vehicles (lease, tags, upkeep) | ($17,000) | ($28,000) | ($33,000) | ($38,000) | ($42,000) |
| License renewals, firearm range fees and registrations | ($4,500) | ($6,000) | ($7,500) | ($9,000) | ($10,000) |
| Phones, supplies and uniform replacement | ($6,000) | ($8,500) | ($10,500) | ($12,000) | ($14,000) |
| Equipment replacement | $0 | ($5,000) | ($7,000) | ($8,000) | ($8,000) |
| Bad debt allowance | ($5,000) | ($8,000) | ($11,000) | ($13,000) | ($15,000) |
| Annual pay raises (3% a year) | $0 | ($51,454) | ($119,658) | ($210,050) | ($315,243) |
| EBITDA | ($80,081) | $98,646 | $166,577 | $214,849 | $351,909 |
| Depreciation | ($8,000) | ($8,000) | ($8,000) | ($8,000) | ($4,000) |
| Interest | ($33,000) | ($31,978) | ($29,586) | ($26,916) | ($23,938) |
| Income tax | $0 | $0 | ($16,606) | ($44,879) | ($80,805) |
| Net income before start-up costs | ($121,081) | $58,668 | $112,386 | $135,053 | $243,165 |
| Start-up costs expensed at opening (legal, license, launch marketing) | ($27,500) | $0 | $0 | $0 | $0 |
| Net income after start-up costs | ($148,581) | $58,668 | $112,386 | $135,053 | $243,165 |
Year 1 loses $80,081 at EBITDA and $121,081 before start-up costs, after $33,000 of interest and $8,000 of depreciation. The $27,500 of legal, license and launch costs take the loss to $148,581. Year 2 is the first profitable year, at $58,668, with no income tax because the Year 1 loss carries forward. Year 3 profit rises to $112,386 on 20% more revenue: EBITDA grows by $67,931 even though the account manager is paid for a full year and the pay-raise line grows from $51,454 to $119,658, and income tax of $16,606 starts. EBITDA margin is 4.4% in Year 2, then 6.2%, 6.7% and 9.3% in Years 3 to 5, with the larger office and the second senior supervisor arriving in Year 4. Net margin before start-up costs is 2.6%, 4.2%, 4.2% and 6.4%. Gross profit in the table is 94.8% of Year 1 revenue because officer pay sits in payroll. After officer pay, on-costs, pay raises and direct costs, gross margin is about 25% in Year 1 and 30% to 33% from Year 2, and after field supervisors about 22% in Year 1 and 24% to 27% afterward. Payroll with pay raises is 87% of Year 1 revenue, 79% in Year 2, 77% in Years 3 and 4 and 75% in Year 5.
Cash in and out
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Cash from operations | ($295,051) | ($54,904) | $64,043 | $78,944 | $178,124 |
| Radios, cameras, patrol outfit and office | ($36,000) | $0 | $0 | $0 | $0 |
| Funding received | $575,000 | $0 | $0 | $0 | $0 |
| Loan principal repaid | $0 | ($20,675) | ($23,067) | ($25,737) | ($28,715) |
| Owner distributions | $0 | $0 | $0 | ($50,000) | ($100,000) |
| Net change in cash | $243,949 | ($75,579) | $40,976 | $3,207 | $49,409 |
| Closing cash | $243,949 | $168,370 | $209,346 | $212,553 | $261,963 |
Year 1 uses $295,051 of operating cash and $36,000 on equipment, and ends with $243,949 after the $575,000 of funding; equity at that date is $126,419. On December's billing rate, 45 days of receivables would be about $227,385, which is $72,915 more than the balance sheet carries and would leave December cash near $171,000, so the year-end figure above is the generous reading. Year 2 earns $58,668 yet uses $54,904 of operating cash, because receivables grow by $121,571 as billings rise. The lowest year-end balance is Year 2 at $168,370; with 60-day payers it is $76,357. A Year 2 monthly low is not modeled and could sit below that year-end figure. Distributions of $50,000 begin in Year 4 and $100,000 follows in Year 5. Each is below that year's net income ($135,053 and $243,165) and below the operating cash left after loan principal ($53,207 and $149,409), although the Year 4 payment leaves only $3,207 of the year's cash. Cumulative net income after start-up costs is $157,526 by Year 4, against $50,000 paid, and $400,691 by Year 5, against $150,000.
Balance sheet
| At year end | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Cash | $243,949 | $168,370 | $209,346 | $212,553 | $261,963 |
| Accounts receivable | $154,470 | $276,041 | $332,384 | $396,493 | $465,534 |
| Radios, cameras, patrol outfit and office (net) | $28,000 | $20,000 | $12,000 | $4,000 | $0 |
| Total assets | $426,419 | $464,411 | $553,730 | $613,046 | $727,497 |
| Bank loan | $300,000 | $279,325 | $256,258 | $230,521 | $201,806 |
| Paid-in capital | $275,000 | $275,000 | $275,000 | $275,000 | $275,000 |
| Retained earnings | ($148,581) | ($89,914) | $22,472 | $107,525 | $250,691 |
| Total liabilities and equity | $426,419 | $464,411 | $553,730 | $613,046 | $727,497 |
Break-even and loan cover
| Measure | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| EBITDA margin | -6.4% | 4.4% | 6.2% | 6.7% | 9.3% |
| Net margin (before start-up costs) | -9.7% | 2.6% | 4.2% | 4.2% | 6.4% |
| Payroll incl. pay raises as share of revenue | 87% | 79% | 77% | 77% | 75% |
| Revenue per full-time equivalent at year end | $48,189 | $65,853 | $70,947 | $73,091 | $78,667 |
| Average monthly revenue | $104,410 | $186,583 | $224,667 | $268,000 | $314,667 |
| Monthly revenue needed to cover operating costs | $111,446 | $177,916 | $210,030 | $249,122 | $283,746 |
| Debt service cover (EBITDA / interest + principal) | -2.4x | 1.9x | 3.2x | 4.1x | 6.7x |
The last two rows of the table compare what the company bills with what it needs to cover operating costs. Year 1 averages $104,410 a month against $111,446 needed, and December billed $151,590, well above that line. Billings clear the needed level by 4.9% in Year 2, 7.0% in Year 3, 7.6% in Year 4 and 10.9% in Year 5, a thin cushion in the middle years: a loss of billings that size would take the company to break-even. Loan cover in the table is EBITDA over interest and principal. After tax, on net income plus depreciation and interest, it is 1.87x in Year 2, 2.85x in Year 3, 3.23x in Year 4 and 5.15x in Year 5. Year 1 is negative because the loan is interest-only and the company loses money, and principal repayments begin in Year 2.
How far the base case can be pushed
Each row changes one input from the base case and nothing else, run through the same engine. A cost moves in a row only if it moves with the input that row changes. Direct costs and the bad-debt allowance follow volume, so they fall with the revenue-lower row and with the three Year 1 only rows, which all lose billings. The bill-rate and price-rise rows hold direct costs at the base-case dollars, because a lower price does not cut fuel or uniforms, and scale only bad debt. Payroll, insurance and the other costs stay where the base case has them, so these are unmanaged results and not a forecast of what the owner would do. The three rows marked Year 1 only keep the base case's later-year revenue and re-blend the direct-cost rate, so only Year 1 and the Year 1 low are read, and their year-end cash column is the Year 1 closing balance. Otherwise year-end cash is the engine's lowest closing balance in Years 1 to 3. The Year 1 month-end low is the approximate figure used above, taken after unpaid invoices at the lag in that row (45 days unless the row says otherwise). Cover is EBITDA over interest and principal.
| Case | Year 1 net income | Year 2 net income | Year 3 net income | Year 2 cover | Year-end cash (lowest, Years 1 to 3) | Lowest Year 1 month-end cash |
|---|---|---|---|---|---|---|
| Base case | ($148,581) | $58,668 | $112,386 | 1.87x | $168,370 | $87,271 (Sep) |
| Revenue 10% lower, every year | ($266,912) | ($152,886) | ($125,605) | -2.14x | ($325,290) | $32,465 (Sep) |
| Bill rates 5% lower, every year | ($210,978) | ($52,882) | ($5,259) | -0.25x | ($65,625) | $57,445 (Sep) |
| No 4% yearly price rise from Year 2 | ($148,581) | ($27,140) | ($73,575) | 0.24x | ($37,345) | $87,271 (Sep) |
| Direct costs 2 points higher | ($173,640) | $13,888 | $75,072 | 1.02x | $98,532 | $71,246 (Sep) |
| All wages 10% higher | ($257,390) | ($117,991) | ($79,458) | -1.48x | ($267,964) | $5,665 (Sep) |
| Officer on-costs 3 points higher | ($170,226) | $22,769 | $87,172 | 1.19x | $110,827 | $71,038 (Sep) |
| Insurance premiums 30% higher | ($159,981) | $38,568 | $102,003 | 1.49x | $136,870 | $78,721 (Sep) |
| Rent 10% higher | ($151,461) | $55,708 | $111,553 | 1.82x | $162,530 | $85,111 (Sep) |
| Clients pay in 30 days (cash only) | ($148,581) | $58,668 | $112,386 | 1.87x | $260,384 | $152,262 (Aug) |
| Clients pay in 60 days (cash only) | ($148,581) | $58,668 | $112,386 | 1.87x | $76,357 | $17,886 (Sep) |
| Opening two months late (Year 1 only) | ($221,837) | – | – | – | $207,914 | $48,388 (Sep) |
| Opening two months late, 60-day payers (Year 1 only) | ($221,837) | – | – | – | $168,831 | ($7,249) (Oct) |
| 24-hour tower post lost from month 7 (Year 1 only) | ($278,388) | – | – | – | $130,882 | $51,725 (Oct) |
The opening-delay rows move the revenue ramp and every Year 1 hire except Darnell and the scheduler two months later, and leave rent, insurance and the other annual costs as budgeted. The tower-post row removes 730 hours a month of unarmed billing from month 7, with no change to payroll. Year 1 equity ends at $53,163 in the delay case and at negative $3,388 in the tower-post case.
This is a thin-margin, labor-heavy business, and the table says so. Four rows turn Year 2 into a loss: revenue 10% lower, bill rates 5% lower, wages 10% higher and no yearly price rise. None of the four returns to profit in Year 3. The result therefore depends on passing wage increases through at renewal. The cost rows leave Mill Haven profitable, but direct costs two points higher and officer on-costs three points higher take Year 2 cover to 1.02x and 1.19x, below a likely 1.25x test. On cash, the reserve holds with 60-day payers, with about $18,000 to spare at the low, and with a two-month opening delay, with about $48,000 to spare; the two together do not hold.
If clients cut 20% of their hours, every year
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $1,002,336 | $1,791,200 | $2,156,800 | $2,572,800 | $3,020,800 |
| Net income before start-up costs | ($236,066) | ($25,212) | $44,696 | $122,231 | $206,863 |
| Net income after start-up costs | ($263,566) | ($25,212) | $44,696 | $122,231 | $206,863 |
| Closing cash | $159,858 | $24,714 | $9,269 | $62,475 | $189,391 |
Every revenue line is cut by 20% in every year, meaning a client drops 20% of its post hours or the company wins 20% fewer contracts. The owner sees the shortfall in the first quarter, so the responses start then and not in January. From month 4 officer rosters follow the lower hours and officer pay falls to 85% of the base case, then to 82% from Year 2, which is the 20% fall in hours plus a 2% allowance for rosters that cannot be trimmed exactly. From month 7 Darnell takes a 20% pay cut. The day supervisor starts six months later, the account manager and the second senior supervisor are never hired, the company stays in its first office and no distributions are paid. Marketing, insurance premiums (audited after the policy year), overtime and recruiting are cut by 20%, 10%, 20% and 20% from Year 2 and left as budgeted in Year 1, and the bad-debt allowance falls with billings in every year. Officer cohorts are not delayed, because their pay already follows hours, and the bookkeeper still starts in month 3.
The result is weaker than the base case in every year. Year 1 loses $263,566 after start-up costs, and equity ends the year at $11,434. Year 2 loses $25,212 and equity turns negative, at negative $13,779; the engine flags that. Year 3 earns $44,696 and the later years recover. Closing cash is below the base case in every year and never falls below $9,269 at a year end, which happens in Year 3. The Year 1 month-end low, on the base case's basis, is about $69,000 in September against $87,000 in the base case. Cover is negative in Year 1, 0.28x in Year 2 and 1.56x in Year 3, then 2.98x and 5.17x. Against a likely 1.25x test the downside fails in Years 1 and 2, so the owners would ask the bank for a net-worth covenant that starts after Year 3, a cover test that starts with Year 3 results, and a $100,000 standby working-capital line. The line is for the stacked case: with 60-day payers the downside's year-end cash is negative in Years 2 to 4, down to negative $79,367 at the end of Year 3. Month-end balances inside Years 2 and 3 are not modeled and could be deeper. Rent is not renegotiated and pay raises continue; a freeze on raises would be the next lever.
Sources
- Bureau of Labor Statistics, Security guards, Occupational Outlook Handbook: median annual wage of $38,020 in May 2025 and 1% projected employment growth from 2025 to 2035; armed positions carry stricter background checks and training, and most states require guards to be licensed.
- Georgia Board of Private Detective and Security Agencies, rules as compiled by Cornell Law School: Rule 509-1-.02, Fees (a non-refundable application fee with each company, employee registration or weapon permit application), Rule 509-3-.07 (Board-approved training instructors) and Rule 509-3-.08 (firearms training before a weapon is issued). Licensing forms and the fee schedule are on the Board's page at sos.ga.gov; no fee, bond amount or training-hour figure from it is used in this plan.
- Georgia corporate income tax rate of 4.99% for 2026 under HB 463: BDO, June 5, 2026 and the Governor's office release of May 11, 2026. Further cuts depend on state revenue targets, and the rate is the Department of Revenue's to confirm.
- Federal corporate income tax rate of 21%: 26 U.S.C. 11(b). The 80% limit on using carried-forward losses: 26 U.S.C. 172(a).
- U.S. Department of Labor, federal minimum wage of $7.25 an hour and overtime pay at one and a half times the regular rate beyond 40 hours in a workweek.
- U.S. Small Business Administration, types of 7(a) loans: a 75% guarantee on loans above $150,000 and a rate cap of the base rate plus 4.5% on loans of $250,001 to $350,000. The SBA's 7(a) loans page describes a working capital line pilot that asks for at least one year of operating history. The lender sets the final terms.
- Bill rates, wages, workers' compensation, general liability and bond pricing, rent and turnover are planning figures, not quotes or statistics.
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