How do I create a quote for a potential client?

[Crowdertr]

I have a potenial client who is willing to be out first contract for the security company we are starting. I have a copy of the quote there previous company gave them but I am having trouble deciphering it. Any help would be apreciated.

[Curtis Baillie]

Kind of hard to decipher without the quote. There many - many programs out there you can buy.

[SecTrainer]

A couple of things:

First, do you have the basic skills needed to start and successfully manage a business of any kind, whether security company or not?

This question has absolutely nothing to do with your security background. If the answer is "no", I'd suggest you find a partner who brings those abilities to the table - especially someone with management experience in a service-related industry. Someone who has successfully operated a profitable janitorial service or a property management company, for instance, would be more valuable to you than someone who has operated a retail business. And, especially, someone who has navigated the rough waters of cash flow in a service contract business would be very desirable. Here be dragons.

Second, it's very dicey starting out working from another company's contract/price schedule. You have no idea whether that contract was profitable even for them (and if they weren't well run they might not have known either). But, even if it was, there will likely be little or no correlation between their operational and service delivery costs and yours.

One thing you might do before anything else is to set up a session with one of the retired executives who volunteer with SCORE. Sit down with them, tell them what you're trying to do and pick their brains.

[fivestaralarm]

A couple of things:

First, do you have the basic skills needed to start and successfully manage a business of any kind, whether security company or not?

This question has absolutely nothing to do with your security background. If the answer is "no", I'd suggest you find a partner who brings those abilities to the table - especially someone with management experience in a service-related industry. Someone who has successfully operated a profitable janitorial service or a property management company, for instance, would be more valuable to you than someone who has operated a retail business. And, especially, someone who has navigated the rough waters of cash flow in a service contract business would be very desirable. Here be dragons.

Second, it's very dicey starting out working from another company's contract/price schedule. You have no idea whether that contract was profitable even for them (and if they weren't well run they might not have known either). But, even if it was, there will likely be little or no correlation between their operational and service delivery costs and yours.

One thing you might do before anything else is to set up a session with one of the retired executives who volunteer with SCORE. Sit down with them, tell them what you're trying to do and pick their brains.

Thanks for sharing. It really helpful for me.

[abjohnson]

How to give a customer a quote

Honestly the best way to go about doing so is by developing the relationship. I have seen the biggest companies in the industry grow even bigger just because they have that relationship. Start off by trying tho take them out to lunch. I have been able to get huge contracts by simply having a couple lunches with my customers. They Feel more comfortable with you, and begin to trust you once that happens your job becomes that much easier.

Out to help change the world one security franchise at a time

[Squid]

JUST SCAN AND POST IT ALREADY, just redact ID info.

[hrdickinson]

How to create a quote for a potential client

As SecTrainer and the other members have already commented, this is more involved than you may imagine. For starters:

Have you formed a company?

• Is your company duly licensed?
• Do you have Workers Comp. and General Liability insurance that is appropriate for the security industry?
• Do you have a Federal Identification Number?
• Is your company registered with the federal, state (and possibility local) taxing authorties?
• If your state requires it, is your uniform and badge approved?
• Do you have a quality, yet reasonable uniform vendor?
• Do you know how to prepare a payroll in compliance with your state's laws involving O/T calculations, etc?
• Do you have a payroll service?
• If you were to secure your first contract, do you know how to prepare an invoice consistent with your original quote?
• Do you have enough working capital (CASH) to continue to pay your officers AND your payroll taxes until your client begains to pay you?

Regarding your prospective client:

• Would the job site location be physically close enough to permit proper supervision?
• Do you know what your company's payroll tax and insurance rates are?
• Uniform costs?
• Training costs?
• Do you have a Service Agreement for him/her to sign?
• Is the job the proper size for you to handle?
• Do you have a relationship with this person such that your price per hour could be higher than the incumbent's if you needed it to be?
• Have you factored in equipment costs?
• Any special training?
• Can you bill a separate rate for holidays?
• Etc, etc, etc.

If you know the answers to most of these questions, then I would proceed, but with caution. If we can assist you, please contact us. If you cannot answer most of these questions, then I agree with SecTrainer and recommend you find a mentor before proceeding.

[SecTrainer]

As SecTrainer and the other members have already commented, this is more involved than you may imagine. For starters:

Have you formed a company?

• Is your company duly licensed?
• Do you have Workers Comp. and General Liability insurance that is appropriate for the security industry?
• Do you have a Federal Identification Number?
• Is your company registered with the federal, state (and possibility local) taxing authorties?
• If your state requires it, is your uniform and badge approved?
• Do you have a quality, yet reasonable uniform vendor?
• Do you know how to prepare a payroll in compliance with your state's laws involving O/T calculations, etc?
• Do you have a payroll service?
• If you were to secure your first contract, do you know how to prepare an invoice consistent with your original quote?
• Do you have enough working capital (CASH) to continue to pay your officers AND your payroll taxes until your client begains to pay you?

Regarding your prospective client:

• Would the job site location be physically close enough to permit proper supervision?
• Do you know what your company's payroll tax and insurance rates are?
• Uniform costs?
• Training costs?
• Do you have a Service Agreement for him/her to sign?
• Is the job the proper size for you to handle?
• Do you have a relationship with this person such that your price per hour could be higher than the incumbent's if you needed it to be?
• Have you factored in equipment costs?
• Any special training?
• Can you bill a separate rate for holidays?
• Etc, etc, etc.

If you know the answers to most of these questions, then I would proceed, but with caution. If we can assist you, please contact us. If you cannot answer most of these questions, then I agree with SecTrainer and recommend you find a mentor before proceeding.

What Richard said, taking note that in his response he's extended an offer of assistance to you that I'd strongly recommend you take advantage of as an expert in these matters.

The days of buying a retired police car, fitting it with your graphics and an amber light bar and "going into the security business" are GONE. Richard mentions sufficient cash to make payroll until your client starts paying you. You'll also need sufficient cash to cover your own overhead (fixed and variable) for some time into the future (probably a minimum of six months), for the simple reason that it's simply not going to be feasible to bill a single client a rate that's high enough to cover both your payroll, payroll taxes and your overhead.

And what that means, in turn, is that from Day One you're going to be leaking money faster than you thought possible. You'd better be spending substantial amounts of time scrambling for business - along with handling the daily operation of the business, of course. The problem is, "scrambling for clients" in the security business isn't like trying to convince the public to take a chance on trying out your new restaurant. Many potential clients will require you to participate in a formal bidding process that can take months - and that's IF your company is even qualified to bid. Clients often require something like 5-10 years in business, a $million or more in sales, references, etc. - just to qualify to submit a bid for their business. They won't even send you an RFP until you prove you're qualified to bid on their contract.

Oh, and this, too: Even the process of preparing a (profitable) bid has costs associated with it. You must have numbers to work with, and they don't come out of thin air. More importantly, you need to be able to project what those numbers will mean going forward during the life of the contract. I consider myself something of a spreadsheet guru, but I'd hate to try to sit down and create one from scratch in this industry. There are literally dozens of variables to consider - and with slim margins any one of those variables can tip a contract from the profit to the loss column if it's mishandled in the bid calculus.

For instance, the marginal cost of labor (meaning, the cost of the next man-hour if you win a bid) can be a lot higher than your current costs when it means placing want-ads, interviewing, hiring, equipping, training, promoting people to supervisor/lead positions, perhaps buying another vehicle, etc. These are already "sunk costs" with regard to your existing work force, and expansion can be expensive at the front end of a new contract.

My neighbor is a successful small construction contractor, and he won't bid an outhouse without running the numbers through software that's designed to make sure he doesn't leave anything out of the bid - including the profit - and he never deviates from what the software tells him he has to get in order to be profitable.

So, unless you're extraordinarily lucky, you'll have to make do on "scraps" for awhile - small contracts, one-offs or "specials", etc. that the bigger companies don't want. The Catch-22 here is that this is often some of the most problematic business to manage operationally, and the clients are often those that established security companies don't want to deal with, for a variety of reasons. For instance, you might have to do business with clients that aren't very credit-worthy - read, late-pays and even no-pays.

It used to be that any gomer could hope to start a security company and at least manage to put some road-kill on the family dinner table, but no longer. And besides - hope is not a strategy anyway.

[E.S.]

What Richard said, taking note that in his response he's extended an offer of assistance to you that I'd strongly recommend you take advantage of as an expert in these matters.

The days of buying a retired police car, fitting it with your graphics and an amber light bar and "going into the security business" are GONE. Richard mentions sufficient cash to make payroll until your client starts paying you. You'll also need sufficient cash to cover your own overhead (fixed and variable) for some time into the future (probably a minimum of six months), for the simple reason that it's simply not going to be feasible to bill a single client a rate that's high enough to cover both your payroll, payroll taxes and your overhead.

And what that means, in turn, is that from Day One you're going to be leaking money faster than you thought possible. You'd better be spending substantial amounts of time scrambling for business - along with handling the daily operation of the business, of course. The problem is, "scrambling for clients" in the security business isn't like trying to convince the public to take a chance on trying out your new restaurant. Many potential clients will require you to participate in a formal bidding process that can take months - and that's IF your company is even qualified to bid. Clients often require something like 5-10 years in business, a $million or more in sales, references, etc. - just to qualify to submit a bid for their business. They won't even send you an RFP until you prove you're qualified to bid on their contract.

Oh, and this, too: Even the process of preparing a (profitable) bid has costs associated with it. You must have numbers to work with, and they don't come out of thin air. More importantly, you need to be able to project what those numbers will mean going forward during the life of the contract. I consider myself something of a spreadsheet guru, but I'd hate to try to sit down and create one from scratch in this industry. There are literally dozens of variables to consider - and with slim margins any one of those variables can tip a contract from the profit to the loss column if it's mishandled in the bid calculus.

For instance, the marginal cost of labor (meaning, the cost of the next man-hour if you win a bid) can be a lot higher than your current costs when it means placing want-ads, interviewing, hiring, equipping, training, promoting people to supervisor/lead positions, perhaps buying another vehicle, etc. These are already "sunk costs" with regard to your existing work force, and expansion can be expensive at the front end of a new contract.

My neighbor is a successful small construction contractor, and he won't bid an outhouse without running the numbers through software that's designed to make sure he doesn't leave anything out of the bid - including the profit - and he never deviates from what the software tells him he has to get in order to be profitable.

So, unless you're extraordinarily lucky, you'll have to make do on "scraps" for awhile - small contracts, one-offs or "specials", etc. that the bigger companies don't want. The Catch-22 here is that this is often some of the most problematic business to manage operationally, and the clients are often those that established security companies don't want to deal with, for a variety of reasons. For instance, you might have to do business with clients that aren't very credit-worthy - read, late-pays and even no-pays.

It used to be that any gomer could hope to start a security company and at least manage to put some road-kill on the family dinner table, but no longer. And besides - hope is not a strategy anyway.

This is a good information, but not in anyway helpful for this particular person whose intention is to start a NEW security company. There is no software that will do all your expenses accounting for all special needs of your potential client. I am not managing a business yet, but in my opinion for someone who just started a new company with nearly no funds available the best software is a brain, sheet of paper and pen. Learn to crouch before you can walk, same here, start from a little, before you start making bids with companies milliners.

ES

[bababouy]

I have a potenial client who is willing to be out first contract for the security company we are starting. I have a copy of the quote there previous company gave them but I am having trouble deciphering it. Any help would be apreciated.

This is easy, and will put you in a good position for starting your business. Figure out your costs associated with labor and materials such as vehicle maintenance and fuel, then figure out what you need to have in your pocket and see if it comes close to the other contract. Then cut the other guys price by 10-15 percent. Its a huge advantage in business when you can see the competitors bid. Make sure that you provide that customer with the best service possible so that you can use them for a reference for future customers.

[hrdickinson]

This is easy, and will put you in a good position for starting your business. Figure out your costs associated with labor and materials such as vehicle maintenance and fuel, then figure out what you need to have in your pocket and see if it comes close to the other contract. Then cut the other guys price by 10-15 percent. Its a huge advantage in business when you can see the competitors bid. Make sure that you provide that customer with the best service possible so that you can use them for a reference for future customers.

Unless the incumbent is gauging the client, beating his price by 10 to 15%, in this business, will put you at breakeven, at BEST! If you would like, I'll invest a little time to help you get started. Just give me a call next week. Our contact info is on our website.

[bababouy]

Sometimes breaking even is what you need to do to get in the door, especially when you are starting in business. Give your customer a service that will blow him away, then he will be a customer for life. When you are starting in business, you don't have a ton of references to give your customers so you need to make some.