Opening your own company questions

[leitung]

So I am seriously taking into consideration starting my own Private Security Company, it's something I really want to do and I know it's not as simple as getting your state company license and running off to get accounts.

My main questions to fellow company owners are:

1) Who do you use for liability insurance? Washington State law requires that I have $25,000 Property Damage & $25,000 Bodily Injury. Yeah, I am a start up, so that's all i am going to be able to afford right now. Of course as time goes on I am going to get a multi-million dollar policy. Problem I see is that all the insurance companies I found with my googling only want to talk about a multi million dollar policy.

2) Whats the best method of landing accounts?

3) Hiring Employees? I know every state law is different but it seems like SO much is involved in it. Workman's Compensation, Federal Income Tax withholding, Disability Insurance, e.t.c. I don't even know how much to withhold, how to calculate it, and where to send the money & when. Seems like I need a class or something there, but are there services you can use that will do it all for you and how much do they run?

4) Benefits and Drawbacks of having Employees on a 1099 as independent contractors?

5) If anyone knows about the WA state certified trainer exam or the company principal exam let me know.

Feel free to PM me if you don't want to discuss it in a public setting. Any help is appreciated.

[Squid]

#3 Yes, it is a real mess to hire anyone legally and 'on the books' in USA, our Govt does that to encourage people to hire illegal aliens, and/or to make it hard on 'small biz' and tilt the scales toward big corps. There are 'services' that do this but they take a big bite. I've heard upwards of $50 PER PAY CHECK for handling all the details and record keeping for short term employment. I remember my first employer at my first summer 'real job' in HS to quote "I need to keep 7 Fing records for 7 Fing years to pay you $70 Fing dollars for 7 Fing weeks".

#4 Unless your employee is lic. guard company I don't think 1099 will be legal and they(and you) would be guilty of operating unlic guard company, and they will need to be W-2 employees.

[Soper]

You need to have a business plan and accountant to advise you before you do anything else. Search the forums as I believe Curtis has posted some really great advice on this subject.

[tacticalguy]

So I am seriously taking into consideration starting my own Private Security Company, it's something I really want to do and I know it's not as simple as getting your state company license and running off to get accounts.

My main questions to fellow company owners are:

Nothing worth doing is ever simple or easy, sir.

1) Who do you use for liability insurance? Washington State law requires that I have $25,000 Property Damage & $25,000 Bodily Injury. Yeah, I am a start up, so that's all i am going to be able to afford right now. Of course as time goes on I am going to get a multi-million dollar policy. Problem I see is that all the insurance companies I found with my googling only want to talk about a multi million dollar policy.

El Dorado is the insurance carrier that most security/P.I. agencies in Florida use. They're a nationwide company, though and used to dealing with small start-up security agencies.

2) Whats the best method of landing accounts?

You need to have a business plan and an accountant as Soper said. When you try to land your first few accounts, you're going to want to show those to your prospective clients. The business plan and accountant show that you're organized, have thought things through and aren't some fly-by-night operation that's going to set up shop and close down in 3 months, leaving your clients in the lurch. As a new business, offer the lowest bill-rate that you can while leaving enough profit to pay your incidentals; insurance, taxes, etc. As a new business owner, you're probably going to be one of the few employees for the first year, at least. Look for daytime accounts first, that you can work and stand the post. Small retail (High risk; liquor/convenience stores, etc) accounts are your best bet while you're trying to get your foot in the door and get established.

3) Hiring Employees? I know every state law is different but it seems like SO much is involved in it. Workman's Compensation, Federal Income Tax withholding, Disability Insurance, e.t.c. I don't even know how much to withhold, how to calculate it, and where to send the money & when. Seems like I need a class or something there, but are there services you can use that will do it all for you and how much do they run?

As I said above, you're likely to be your only full time employee for a while. There are some companies that do all of the paperwork for you, that's true. That's also an expense that you shouldn't worry about until you have at least 10 employees and steady accounts that you can rely on. Once that's accomplished, ADP does all of the payroll deductions for you.

4) Benefits and Drawbacks of having Employees on a 1099 as independent contractors?

I can't answer that because Florida DOACS prohibits 1099'ing security officers. All officers MUST be company employees for the duration that they work for your agency/company in Florida. If you're armed and the company tells you that you're covered with only a 1099, they're wrong. Get involved in an altercation where the police respond or even worse, a shooting. Your licenses will be revoked so fast. 1099 means, in Florida anyway, that those officers aren't covered by your insurance.

5) If anyone knows about the WA state certified trainer exam or the company principal exam let me know.

Feel free to PM me if you don't want to discuss it in a public setting. Any help is appreciated.

Those are all the answers that I have, sir. Good luck.

[Curtis Baillie]

Actually SecTrainer has posted many threads/posts related to starting a security company. $25K is very low for an insurance requirement. In the 70s in Ohio when I formed my first company the min insurance requirement was $600K.

You need to look up the meaning and requirements and legalities of a 1099. This is a Federal tax issue and I don't see where you could hire and operate your company under the 1099 rules. That would be a fast way to run afoul of the law right off the bat.

I started off with just myself and a partner. Between starting a corporation and basic start-up expenses (licensees, office...etc) I blew through $5,000. pretty fast and that was 1970s prices. I went from the two of us to 26 employees really fast. When I sold the company there were over 100 employees and all the nightmares that went along with it.

[copelandamuffy]

Actually SecTrainer has posted many threads/posts related to starting a security company. $25K is very low for an insurance requirement. In the 70s in Ohio when I formed my first company the min insurance requirement was $600K.

You need to look up the meaning and requirements and legalities of a 1099. This is a Federal tax issue and I don't see where you could hire and operate your company under the 1099 rules. That would be a fast way to run afoul of the law right off the bat.

I started off with just myself and a partner. Between starting a corporation and basic start-up expenses (licensees, office...etc) I blew through $5,000. pretty fast and that was 1970s prices. I went from the two of us to 26 employees really fast. When I sold the company there were over 100 employees and all the nightmares that went along with it.

This Gentleman knows what he speaks. "When I sold the company there were over 100 employees and all the nightmares that went along with it"

I would wager Curtis slept better at night.

[Soper]

Apologies. Sectrainer. Thank you for the correction, Curtis.

[Squid]

I'm guessing your better bets for first New Clients would be things like Wedding Planners, so they won't be stuck with whatever random slob some company sends out, and where it is a 'big deal' what the guard does and doesn't do, and all sorts of 'extra service'(switching to errand running, bus boy etc on demand) is 'no problem' because it is you, and where a promise of a "higher level of service" will mean something to prospective clients because they are hiring "the owner".

To get THAT biz, I suggest the good old "oblique" route. Go to wedding DJs, halls or caterers or even churches who work with Planners to find opportunities and listen for problems and craft your proposals to address them.

[leitung]

Good info guys, gave me some food for thought.

I will do more research into the payroll and whatnot, it seems like there is so much involved in hiring people. Can't be as simple as writing the check.

[leitung]

Actually SecTrainer has posted many threads/posts related to starting a security company. $25K is very low for an insurance requirement. In the 70s in Ohio when I formed my first company the min insurance requirement was $600K.

Yeah, I have to start somewhere, and thats the minimum WA state requires for license issuance. Yeah I am not made of money. $25 k property damage & $25 k personal injury.

Of course as time goes on, I plan to run up to 4 million.