A

Case Study on

“FINANCIAL & HUMAN RESOURCE MAN-

AGEMENT”
Of
Rakshak securitas Ptd.ltd.

Submitted to the Partial Fulfillment of the IV Semes-

ter of Masters Of Business Administration
(Business Management)
For
NMIMS
Deemed-to-be-University
Submitted By:
Shubham Singh (M.B.A(BM) IV SEM.)

Student ID 77121596998
 Table of Content
S.No. TOPIC Page
No.
1. Title 1
2. Preface 2
3. Acknowledgement 3
4. Introduction 4-8
5. Clint List 9-15
6. Company certificates 16-21
7. Executive Summary 22-24
8. Background 25-29
9. Overview of Secondary data and Survey 30-40
methodologies
10. Trends and employee characteristics in 41-65
Private Security
11. Brief Description of Project and Service 66-78
12. Key Assumptions 79
 PREFACE

“Learning categorizes you and practicing on that learning

specializes you”. Theoretical principles taught and mentioned
in the class room prove beneficial if they have to remain
relevant. Practice orientation of management scholar is need
to generating competence to deal with troubles at grass root
level.This coaching is the mode of imparting practical coaching
to the student.

The goal is to grant a deep perception into practical elements

of the functioning of the organization.
The train apprises the student to the actual function,
responsibility and problem confronted by an organization. It
gives him with the knowledge of the a number type of hassle
that crop up in the day to day functioning of the employer .The
way they are solved by the departments and appraisal of the
crucial decision taken by the manager at the critical time.

2
 ACKNOWLEDGEMENT

I wish to extend my Sincere Gratitude towards

“Mrs Nisha Singh (Rakshak Securitas Ptd.Ltd.) For
the help and support required for me to complete this
project and providing me with the immense
information and Knowledge about "how to manage a
business its finance and human resources

I would like to express my sincere gratitude and

appreciation to NMIMS University for providing me
with the opportunity to undertake a case study project
as part of my academic curriculum. I am grateful for
the valuable experience and knowledge gained
through this project, which has significantly
contributed to my personal and professional
development.

I am deeply grateful to my parent’s who have given me every

help and moral support and their constant advice which
enabled me to pursue my academic aim.

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PROPOSAL FOR SECURITY SERVICES

Introduction: : Rakshak Securitas Pvt. Ltd. have the pleasure in introducing ourselves
as a Security & Facility Management Company with an excellence of 15 years. We are granted
licence under the Delhi Private Security Agencies (Regulation) Rules, 2009 to engage in the
business of Security Services by Government of NCT of Delhi. We are also granted licence to
operate in the state of Delhi, Haryana, Punjab, Chandigarh (Union Territory), Uttar Pradesh
and Rajasthan. Rakshak has its registered office, Head office and Operational office in Delhi.
Rakshak has its branches in the state of Punjab, Haryana, Uttar Pradesh, Delhi, Madhya
Pradesh and Rajasthan. We have more than One hundred prestigious Universities, Colleges,
Institutions, Schools, Government establishments and Housing Societies in our running client
list other than Corporate and Industries where we are able to give our professional services.

Regd Office : T-5, Plot No.12, Sector-10, Dwarka, New Delhi-110075. (owned)

Corp Office :S-208, T-301 & T-302, Tripuati Plaza, Sector-11, Dwarka, New Delhi (owned)

Training Center: Vardhman Plaza, Sector-3, Dwarka, New Delhi- 110059 (owned)

Central Control Room: Sector-19, Dwarka, New Delhi (owned)

Branch Offices: Haryana- Gurugram, IMT Manesar, Panipat, Kurukshetra, Rohtak

Punjab - Chandigarh, Amritsar, Jalandhar, Ludhiana
Rajasthan – Jaipur, Ajmer, Udaipur
U.P - Noida, Greater Noida, Meerut, Lucknow, Kanpur,
M.P - Indore, Bhopal
Communications: Tele – 011- 45751807-812, Tele Fax – 011-42760103
Mobile – 9818662052
Web Site – www.securityindiarakshaks.com
Email - [email protected]

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Statutory Compliances: Our company is having all the required statutory registrations
from various Govt departments including Labour Licence, Company Registration, EPF,
ESIC, ST, VAT and having PASARA licence from above stated states and UT’s.

I S O: ISO 9001:2008 Quality Management

SA 8000: 2008 Social Accountability
OHSAS 180001:2007 Occupational Health and Safety Management Systems.
ISO 14001 – 2004. Environmental Management Systems.

Turnover: 2016-17 = 57 Crores (Turnover)

2014-15 = 43 Crores (Turnover)

2013-14 = 27 Crores (Turnover)
2012-13 = 18 Crores (Turnover)
2011-12 = 13 Crores (Turnover)
2010-11 = 7.5 Crores (Turnover)
N.B.: Company has not incurred any loss since its incorporation.

Manpower : 6000 Manpower on roll

Completion Certificates : 1400 lakhs from Punjab Government

300 Lakhs from Haryana Government
90 Lakhs from Dwarka Court
70 Lakhs from Saket Court
70 Lakhs from IOC

RAKSHAKS Strength
Rakshak Securitas Pvt. Ltd. is a leading Professional company having ISO 9001:2008 Quality
M`anagement, SA 8000: 2008 Social Accountability, OHSAS 18001:2007 Occupational Health
and Safety Management Systems. Rakshak has its own central training academy at Dwarka
Delhi. To get the best talent Rakshak has its own recruitment centre. Only those undergo
training who clear the bar of Police Verification. The trained, alert and smartly uniformed

5
Guards of Rakshak performs the tasks of checking unauthorized entry, stopping trespassers,
controlling entry and exit gate, securing assets and material from loss, theft and pilferage,
maintaining fire fighting equipments and guiding visitors after checking their vehicles with
Under Carriage Mirror.

1. To strengthen operations Rakshak’s Patrolling team visit every site on regular and
random basis, team checks the Security staff deployed at the site and take feedback
from the client.

2. Rakshak is proud to state that strength of its Security services is its trained security
guards, executives and managers who are the veterans from the Army, Air Force, Navy
and Paramilitary forces having more than 25 years of experience as its assets. Rakshak
uses latest, sophisticated and scientific equipments. This ensures maximum security of
your Prestigious Premises.

3. All the responsibility of statutory compliance of minimum wages, ESI/EPF and

antecedent verification or any legal matter concerning Security staff rests with Rakshak
Securitas Pvt. Ltd. By taking security services from Rakshak our client can solely focus
on their business. That is to say we have manpower, machine and methods to provide
you security and keep you away from worries at all times.

4. You may consider the Rakshak over the other security agencies for the followings:

(a). Rakshak is having less overhead cost as compared to top MNCs in the field, which
enable Rakshak to deliver better quality of service at a reasonable price.

(b) The undersigned will directly remain in touch with you to know the valuable
feed back to update the training programme.

(c) Rakshak has clarity of thought in relating the quality of operations to three factors i.e
training, supervision & timely payment of wages.

(d) Rakshak emphasize upon the training as an important factor which is evident from
PSARA Act. The following unique features of training at Rakshak make the difference:-

(e) Onsite training at the assignments and refresher training for short duration at the
training centre keep the Guards/ Supervisors updated and helps increasing their morale /
motivation level.

(f) Rakshak design the onsite training programme based upon the requirements of the

6
 assignments /clients.

(g) Rakshak make training more effective by multi dimensional approach to it by making
it more interesting and interactive by role playing, asking questions and quoting relevant
examples.

(h) Rakshak emphasize upon the latest factor i.e facilitation. This is achieved by the art of
public dealing.

(i) Rakshak emphasize upon ethics and personal grooming.

This leads to the enhancement of confidence level of the Guards/ Supervisors which results in
better performance, brand building and client satisfaction or delight.

Sir, May I request your good self to kindly consider our company for your esteemed
organization.

With Warm Regards,

Vinay Singh
MD
For Rakshak Securitas (P) Ltd.
Mobile - 09818662052

7
QUOTATION

Description % Supervisor Gunman Security House

(Skilled) (Skilled) Guard Keeper/Peon/Bus
(Semi Conductor (Un-
Skilled) Skilled)
1 Basic 11622 11622 10582 9568
(Minimum
Wages)
2 E.P.F on 13.36% 1553 1553 1414 1278
Basic only
3 ESI 4.75 % 552 552 503 454
4 Weekly Off 4 Days 1788 1788 1628 NIL
5 Gun Charge NIL 1000 NIL NIL
6 Total 15515 16515 14127 11300
7 Service 10 % 1552 1652 1413 1130
Charge
8 Grand Total 17067 18167 15540 12430

Note:

1. The above charge is for 8 hours of duty and includes uniform and service charges.
2. Service Tax will be charged on the total billing amount as per Govt. Rule.

With Warm Regards

Vinay Singh
MD
For Rakshak Securitas (P) Ltd.
Mobile - 09818662052

8
SOME OF THE PRESTIGIOUS CLIENTS
UNIVERSITIES/EDUCATIONAL INSTITUTES
 Delhi University (DU), Delhi
 Delhi Technical University, Delhi
 South Asian University, Delhi
 Jawahar Lal Nehru University (JNU), Delhi
 Indira Gandhi National Open University, Delhi
 Indira Gandhi Technical University For Women, Delhi
 Netaji Subhash Institute of technology, New Delhi
 Shri Guru Gobind College of Commerce, University of Delhi
 National Brain Research Center, Manesar (NBRC)
 National Institute of Malaria Research, New Delhi (NIMR)
 National Institute of Technology, Kurukshetra, Haryana (NIT)
 Motilal Nehru College, University of Delhi
 International Institute of Health Management Research, New Delhi (IIHMR)
 Indian Council of Social Science Research, New Delhi
 IASE University, New Delhi
 Indian Council of Historical Research
 Nation Institute of Public Finance and Policy (NIPFP)

SCHOOLS
 Ryan International School – 10 School
 St. Francis de Sales, New Delhi
 Mount Carmel school, New Delhi
 BGS International School, New Delhi
 SAM International School, New Delhi
 Vandana International School
 Vandana Kindergarten, Dwarka New Delhi
 Indraprastha School, New Delhi

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  R.D. Rajpal Public School, New Delhi
 Infant Jesus School, New Delhi
 Kamal Model Sr. Secondary School, New Delhi
 Universal Public School, Dwarka New Delhi
 Little Marble School, Dwarka New Delhi
 Rishikul School, New Delhi
 Directorate of Education - 147 Schools

INDIAN OIL CORPORATIONS

 Indian Oil Corporation, World Trade Centre, Barakhamba Road
 Indian Oil Corporation, Yusuf Sarai, New Delhi
 Indian Oil Corporation, Gurgaon, New Delhi
 Indian Oil Corporation, Noida
 Indian Oil Corporation, Marketing Division, Noida
 IOC Laxmi Nagar, New Delhi;
 IOC Pipeline Sec – 1, Noida
 IOC Ajmer
 IOC Chandigarh
 IOC Udaipur
 IOC Jaipur
 IOC Lucknow

GOVERNMENT ESTABLISHMENTS
 Steel Authority of India Limited, Scope Minar, New Delhi
 Steel Authority of India Limited, Scope Complex, New Delhi
 State Trading Corporation of India Limited, New Delhi
 Intellectual Property Office, New Delhi
 District Court, Dwarka, New Delhi
 Intelligence Bureau (IB), New Delhi
 NIA, New Delhi
 Central Prisons, (TIhar Jail)

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  AIIMS, Ansari Nagar, New Delhi
 AIIMS, Faridabad
 Akbar Bhawan, Ministry of Overseas Indian Affairs, New Delhi
 Tele Communication Consultants India Ltd (TCIL)
 National Institute of Plants Genome Research (NIPGR)
 Indian Institute of Petroleum Management, Gurgaon (IIPM)
 Haryana Roadways Engineering Centre, Gurgaon
 Chandigarh Housing Board
 FICCI, New Delhi
 International centre for Automotive Technology,(ICAT) Gurgaon

STATE BHAWAN
 Haryana Bhawan
 Daman & Diu Bhawan
 Nirman Bhawan, Chandigarh
 Chattisgarh Sadan, New Delhi

Defence Establishments
 Sena Bhawan, New Delhi
 Integrated Defense Service HQ (IDS, HQ)
 Air Force Station, Hindon
 Air Force Station Subrotto Park, New Delhi
 Air Force Record Office (AFRO)
 Air Force Central Accounts Office (AFCAO)
 Central Servicing Development Organization (CSDO)
 DAV (AV) Subrotto Park

BANK
 National Housing Bank, New Delhi

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STADIUM
 Budh International Circuit – F1 - Noida

SHOWROOMS
 Treo Nissan, New Delhi
 Treo Cheverlet, New Delhi
 Fashion Brand, New Delhi

WAREHOUSE
Punjab Grains Procurement Corporation Ltd. ( Pungrain)

CORPORATIONS/INDUSTRIES
 Larsen & Toubro, Sector - 112, Gurgaon
 Larsen & Toubro, Sector - 67, Gurgaon
 Larsen & Toubro, Wave City, Noida
 Larsen & Toubro, Panipat
 Larsen & Toubro, Mall of India, Sector – 18, Noida
 Larsen & Toubro, Labour Camp, Sector - 44, Noida
 Johnson Lift Ltd, Noida
 Johnson Lift Ltd, GGN
 LANCO Infratech (Central Water Work Pipelines, Delhi)
 Dhampur Sugar Mills Ltd., Badaun, U.P
 Dhampur Sugar Mills Ltd., Muzzafarnagar, U.P
 Arcop Associates Pvt. Ltd, Gurgaon
 Arcop Associates Pvt. Ltd., Pomposh Enclave, New Delhi
 Airef Engineers Pvt. Limited, DMRC Sites (Jasola Vihar, Sukhdev Vihar,Kalindi Kunj
Okhla , Noida & Faridabad, )
 Sublime Management Solution Pvt. Ltd
 Hyatt Consultancy Pvt. Ltd.
 Heriton, Gurgaon

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  South Delhi Vaults, Gurgaon
 Thyssenkrupp Marine Systems Pvt. Limited, Gurgaon
 Necus Automation Pvt. Ltd, Gurgaon
 Transcorporation International Ltd.
 Romana Herbalcare Pvt. Ltd.
 Mars International India Ltd, Gurgaon
 Ferrostaal India Gmbh, Gurgaon
 Automotive India
 Rosewood Showroom, Gurgaon
 Transcend MT Service Pvt. Ltd.
 Bhramputra Board, Dwarka
 Style Mart Impex
 International Techno Tax
 Sonic metloplus
 SRG Molding
 OM Sai Power Technology
 Act Five Cleaning Machine

BUILDERS
 Lieghton India Contractors Pvt. Ltd., ( Australian MNC )
 Punj LLyod – Metro Project
 Pratham Infratech Pvt. Ltd.
 Saraogi Builders Ltd.
 ERA Group
 HL Construction & Co.
 Tarachand Sumit Construction and Company
 Malik Buildcon
 K Tech Engineers
 Surya Construction Pvt. Ltd., Mohali Chandigarh

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HOSPITALS
 J.K. Lone Hospital, Jaipur
 Shri Dada Dev Mother and Child Hospital, New Delhi
 Rajiv Gandhi Super Speciality Hospital, Tahirpur, New Delhi
 Lok Nayak Jai Prakash Hospital, New Delhi
 Ch. Chander Prakash Ayurvedic Charak Hospital, new Delhi
 DLF Hospital, Gurgaon
 Leprosy Mission Community Hospital, New Delhi
 Suyash Hospital, Indore

HOTELS
CASA Grand Hotel, Gurgoan
SAI International Hotel, Delhi
Golden Palm Hotel, Delhi

DWARKA & AROUND

1. Green Valley, Sec-22

2. Chitrakut Dham, Sec-19
3. Princess Park, Sec-6
4. Trimoorti Apartments, Sec-12
5. Ashoka Enclave Apartment, Sec-11
6. Heritage Tower Apartment, Sec-3
7. Heritage Young professional, Sec-11
8. Jawahar Apartment, Sec-5
9. Katyani Apartment, Sec-6
10.Madhur Jeevan Apartment, Sec-10
11.Mandakini Apartment, Sec-2

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 12.Navnirmal Apartment, Sec-2
13.New Arohi Apartment, Sec-12
14.Park Royal Apartment, Sec-9
15.Thiruvuzha Apartment, Sec-10
16.Vrindavan Apartment, Sec-6
17.Vikram Nager Apartment, Sec-12
18.Young Star, Sec-6
19.Sadh Bawana Apartment, Sec-11
20.Ankriksh Apartment, Sec-4
21.New Rajput Apartment, Sec-12
22.Satyam Apartment, Sec-18
23.Samrat Ashoka Enclave, Sec-18
24.Consulting Engineering Apartment, Sec-18
25.Rudra Apartment, Sec-6
26.Eligible Apartment, Sec-10
27.Suruchi Apartment, Sec-10
28.True Friends, Sec-6
29.Yash Apartment, Sec-11
30.Park Royal Residency, Sec-22
31.Crecent Apartment, Sec-18
32.Sukh Sager CFHS, Sec-10
33.Rohit CGHS, Sec-10
34.Raj Bihar CGHS, Sec-18
35.Sree Radha CGHS, Sec-9
36.Sri Bala ji CGHS, Sec-6
37.Saral CGHS, Sec-10
38.DDA Apartment, Sec-17, Pocket-E
39.DDA Apartment, Sec-2, Pocket-2
40.DDA Flats, Sec-22/1
41.DDA Flats, Sec-11/3

RAKSHAK HAVE ALL THE MANDATORY/STATUTORY CERTIFICATIONS

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THANK YOU!

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 1. EXECUTIVE SUMMARY

The private security industry plays a vital role in ensuring security and safety both in the United States
and
internationally. It is
responsible for safeguarding not only the nation's institutions and critical infrastructure systems but
also intellectual
property and
sensitive corporate information. Private security is extensively utilized by U.S. companies to fulfill
various functions,
such as
protecting employees and property, conducting investigations, performing pre-employment screening,
ensuring
information
technology security, and much more.

Over the past four decades, numerous reports and studies have examined private security agencies and
personnel,
contributing
to the redefinition of their roles and documenting the industry's growth and trends. However, these
studies have
become
outdated, and there is a pressing need for more detailed and up-to-date information, particularly
considering the
expanding
range of responsibilities undertaken by private security. Additionally, some previous data collection
efforts employed
survey
methodologies that yielded non-generalizable data or were prone to nonresponse bias, making it
uncertain how well
these
sources represent the entire private security industry.

Currently, there is no comprehensive and methodologically sound data source providing detailed
information about
private
security beyond basic demographics. Recognizing this gap, the Bureau of Justice Statistics (BJS), an
independent
statistical
agency within the U.S. Department of Justice, initiated a design project to evaluate the feasibility of
conducting a
National
Private Security Survey (NPSS). This report serves as part of the design work and offers a literature
review on
private security,
covering major trends, demographics, collaborations with law enforcement, budgeting and licensing,
legal authority
and powers
within private security, and security operations.
23
1) Employee Demographics: Existing surveys have generally collected high-quality demographic data on
employees.
However, discrepancies in survey methodologies and definitions of private security have resulted in
some variations in
the estimates.

2) Budgeting and Licensing: Substantial information on budgeting and licensing is available for contract
security firms
compared to companies with a proprietary security force.

3) Private Security Powers: Insufficient comprehensive data has been collected on private security
powers, highlighting
the significant need for information in this area.

4) Security Operations: One of the two secondary data sources provided information on security
operations topics. While
one survey design was methodologically sound, the response rate introduced potential bias in the
estimates.

Based on these findings, the following recommendations are proposed for the design and
implementation of a national
survey of the private security industry:

1) Develop a Clear Definition of Private Security: When conducting the NPSS or similar national data
collection efforts, it
is essential to establish a concise definition of private security. This definition should be crafted with an
understanding
that it may yield data different from what is currently available.

2) Cover a Broad Range of Topics: A targeted national study of the private security industry should
encompass various
topics to minimize measurement errors caused by combining data from multiple sources with differing
definitions of
private security. The future study should fill recognized information gaps (e.g., private security powers
and security
operations) while ensuring reliable and updated statistics, such as employee demographics, which are
already adequately
covered by other surveys.

3) Utilize Rigorous Data Collection Methodology: Future studies should address previous challenges
related to
methodology and response rates. This entails developing a national sampling frame that provides
representative
coverage of the companies for accurate inference. Additionally, procedures must include non-response
follow-up to
ensure a reasonable response rate.

4) Conduct Periodic Surveys: Conducting studies that consistently examine private security over time
would yield
significant advantages. This can be achieved by either studying a cohort of companies longitudinally or
conducting new
surveys at regular intervals.

24
Regardless of the chosen approach, conducting a series of studies over time will provide valuable
insights into the evolving nature of the private security industry, including changes in its size,
characteristics, and roles within the United States. These industry trends have significant economic
and policy implications.

In conclusion, this report offers recommendations to enhance future data collection endeavors like
the NPSS, aiming to expand our understanding of the private security industry and generate higher
quality and consistent data over time. The importance of private security to our criminal justice
system, national safety, and security necessitates the collection of more reliable and timely
information. This should involve tracking the functions and roles of private security, as well as their
interactions with policing, corrections, homeland security, and other relevant domains. By building
upon and refining past data collection efforts, we can ensure the accuracy, generalizability, and
usefulness of the collected information for the private security field, federal agencies, policymakers,
and other stakeholders interested in private security data.

25
 2. BACKGROUND
Private security plays a critical role in ensuring the security and safety of individuals, property, and
valuable information. Private security officers are entrusted with safeguarding various institutions and
critical infrastructure systems, such as industry, utilities, transportation, and healthcare and educational
facilities. Companies heavily rely on private security services, including store security, private
investigations, pre-employment screening, and information technology (IT) security. These services cater
to a wide range of markets, from commercial to residential. Some companies employ their own security
personnel, while others engage security firms or a combination of proprietary and contract staff.

In the 1970s, the RAND Corporation conducted a comprehensive series of reports comprising five
volumes, exploring the regulation, licensing, and responsibilities of private security agencies and
personnel (Kakalik & Wildhorn, 1971a, 1971b, 1971c, 1971d, Volumes I–V). Subsequently, Hallcrest
Systems published two extensive studies on the private security industry: "Private Security and Police in
America: The Hallcrest Report I" (Cunningham, Taylor, & Hallcrest Systems, Inc., 1985) and "Private
Security Trends 1970–2000: The Hallcrest Report II" (Cunningham, Strauchs, Van Meter, & Hallcrest
Systems, Inc., 1990). These studies played a significant role in defining the roles of private police in crime
prevention, documenting industry growth and trends. Additionally, numerous government, commercial,
and research organizations have conducted studies on the private security industry.

While these previous reports and profiles have been influential, there is still much to explore, particularly
regarding the expanding roles of private security in contemporary society. The Bureau of Justice Statistics
(BJS) is currently considering the feasibility and value of establishing a statistical series called the National
Private Security Survey (NPSS). This data collection effort aims to enhance our understanding of the role
played by private security in the United States. As part of the NPSS design work, a comprehensive review
of the existing literature and analysis of relevant secondary data have been conducted. This report not
only summarizes the available literature but also examines the availability and quality of secondary data
on private security while identifying information gaps within these sources.

The report begins with an overview of the definitions of private security, industry structure, services
offered, and market segments. It then explores the secondary data sources and survey methodologies
employed by them. Subsequent sections utilize available secondary data sources to describe trends and
employee characteristics within the private security sector. The report also examines the relationship
between private security and other relevant areas, such as policing, corrections, homeland security, and
more between personal safety and law enforcement, and legislation and coaching of private
security sectors.

26
 2.1 Defining Private Security

There is a lack of consensus among experts regarding the definition of private security, leading
to various definitions being used in prior research. These definitional differences often revolve
around the focus of job tasks, the influence of profit and the client, and the inclusion of
additional products and services, such as equipment manufacturing, distribution, and
technology installation (Cunningham et al., 1990).

In one of the initial studies conducted by RAND, private security was defined as "all types of
private organizations and individuals providing security-related services, including
investigation, guard, patrol, lie detection, alarm, and armored transportation" (Kakalik &
Wildhorn, 1971b, p. 3). The study emphasized that a common function across most of these
services is "crime prevention and detection" (p. 18). Hallcrest I argued for a broader definition
of private security that encompasses physical, information, and employment-related security,
challenging the label of "private police" used by Kakalik and Wildhorn (1971b).

Bottom and Kostanoski (1983) expanded the scope of private security, stating that it provides
protection not only against crime but also against four additional threats: waste, accident,
error, and unethical practice. RAND's definition, with its focus on crime prevention, faced
criticism from the Private Security Task Force (PSTF), established by the Law Enforcement
Alliance of America (LEAA), for excluding quasi-public police and failing to address the client
relationship and profit nature of the industry. Consequently, the PSTF adopted a definition
that includes "self-employed individuals and privately funded business entities and
organizations providing security-related services to specific clientele for a fee, for the
individual or entity that retains or employs them, or for themselves, in order to protect their
persons, private property, or interests from various hazards" (Cunningham et al., 1990). The
PSTF's definition also limited its scope to profit-oriented organizations and excluded
quasi-public police unless they were funded by private sources.

Green (1981) argued against distinctions based on profit orientation or source of funds,
highlighting that nonprofit institutions such as hospitals, airports, and schools often hire
private security. He defined private security as "those individuals, organizations, and services
other than public law enforcement agencies, which are primarily engaged in the prevention of
crime, loss, or harm to specific individuals, organizations, or facilities" (as described in
Cunningham et al., 1990).

While these historical definitions are frequently referenced, both Hallcrest reports criticized
them for focusing solely on personnel and businesses, disregarding other aspects of private
security.

27
According to Cunningham and colleagues (1990), the "fastest growing segment of private security"
is the manufacturing, distribution, and installation of security equipment and technological
systems.

In today's perspective, the role of private security is viewed more broadly. For instance, the
American Society for Industrial Security (ASIS) International, the largest association of private
security professionals in the United States, defines private security as the "nongovernmental,
private-sector practice of protecting people, property, and information, conducting investigations,
and otherwise safeguarding an organization's assets" (ASIS International, 2009a). ASIS further
emphasizes that private security plays a role in securing businesses and critical infrastructure
against various threats, including natural disasters, accidents, and planned actions like terrorist
attacks and vandalism (ASIS International, 2009b).

During an ASIS symposium, experts were tasked with developing a comprehensive definition of the
security field and identified 18 core elements (ASIS Foundation, 2009). These elements include:

1. Physical security
2. Personnel security
3. Information systems security
4. Investigations
5. Loss prevention
6. Risk management
7. Legal aspects
8. Emergency and contingency planning
9. Fire protection
10. Crisis management
11. Disaster management
12. Counterterrorism
13. Competitive intelligence
14. Executive protection
15. Violence in the workplace
16. Crime prevention
17. Crime prevention through environmental design (CPTED)
18. Security architecture and engineering.

2.2 Structure of the Industry

Under the broad definition frequently used today, the time period ―private security can
represent
a broad vary of organizations, which includes corporate security, safety defend companies,
armored automobile businesses, investigative services, and many others. Personnel employed
by these

28
companies can be armed or unarmed, can be employed as both in-house or contract employees,
and can have distinctive powers, depending on the place they work and what duties
they fulfill. Some U.S. communities have deputized their protection personnel beneath nation law
to create a pressure with the full electricity to arrest, search, and seize.
The personal protection industry is often described by using distinctions based totally on the
proprietary or
contractual nature of security departments, kind of protection furnished (physical, information, or
employment-related), offerings provided (e.g., guarding, armored transport), and
markets (e.g., vital infrastructure, commercial venues). Some of these traits are
discussed in extra detail in the following

2.2.1 Distinctions Between Contract and Proprietary Security

ASIS International defines proprietary security as "any organization, or department of that
organization, that provides full-time security officers solely for itself" (ASIS International,
2009a). According to Cunningham and colleagues (1990), proprietary security includes the
methods employed by an organization to protect its assets and personnel through owned
equipment and employed personnel. On the other hand, contract security refers to "protective
services provided by one company, specializing in such services, to another company on a paid
contractual basis" (ASIS International, 2009a).

Both types of private security have their advantages. Contractual security may be more
cost-effective, while proprietary security may offer higher quality and more loyal staff.
Organizations with an in-house security department have greater control over the activities of
their security staff. Depending on the security requirements and tasks involved, organizations
may utilize a combination of proprietary and contractual security staff.

Industry executives anticipate a future where they serve as "brokers" rather than managers,
contracting out security personnel for specific tasks while relying on proprietary security
personnel for other responsibilities (Cunningham et al., 1990).

The ASIS Scope and Emerging Trends survey (ASIS Foundation, 2005) collected data on the
distribution of proprietary and contract officers across various industry sectors. Among the
4,000 companies surveyed in 2005 (with a response rate of 21.6%), 56.5% of security functions
were handled by in-house security staff, while 34.5% were managed by contractors, outside
firms, or other sources (Figure 1). It is important to note that the breakdown from the ASIS
survey does not represent the total percentage of contract versus proprietary private security
personnel.

2.2.2 Types of Security

Proprietary and contractual security companies have a role in three main categories of security:
physical, information, and employment-related. Physical protection encompasses measures
designed to safeguard people and prevent unauthorized access to equipment, facilities, materials,
and documents, protecting them against security incidents (ASIS International, 2009a).

29
 Physical security measures may include the use of barriers, locks, lights, sensors, and guards,
who play a crucial role in perimeter and area protection, as they are highly visible and serve as
a key component of physical security (Cunningham et al., 1990).

Figure 1. Distribution of Company Security Functions Between Internal and

External Providers, 2005

Source: ASIS Foundation (2005).

In Hallcrest II, Cunningham and colleagues (1990) defined information security as the safeguarding
of confidential information, whether in physical or electronic form. This includes protecting
sensitive data such as mailing lists, research and development documents, and financial
information. With the advancement of computer technology, the scope of information security has
expanded significantly. It now encompasses the preservation of data confidentiality, reliability,
and availability within automated information systems. Information systems security personnel
develop procedures and safeguards to prevent unauthorized access, including protection against
hackers, viruses, and other threats to information systems (Dempsey, 2008).

Additionally, employment-related security involves acquiring essential information about

employees, both permanent and temporary, that may impact their job performance, pose security
risks, or expose the organization to liability. This can involve screening job applicants for factors
such as drug use or criminal history, ensuring the organization has necessary background checks
and personnel security protocols in place (Dempsey, 2008).

30
 3. OVERVIEW OF SECONDARY DATA SOURCES AND SURVEY
METHODOLOGIES

The secondary data analysis serves two main purposes. First, it allows survey designers to
determine what information can be used for comparisons to the data they plan to collect
and provides an understanding of how other studies measure or define key items. Moreover,
by assessing the available information, the analysis can identify gaps in the literature.
Second, a secondary data analysis allows for an assessment of the quality of the data in the
public domain. Quality measures include how current the data are; the methodology used to
collect data (including the mode of data collection, who the respondents are [e.g., company
representatives or persons in an occupation], and the survey response rate); and the
definitions used when designing the studies, such as the target and sampling populations.
This information can be used to develop a survey design that utilizes approaches from
previous successful studies that obtained high-quality data.

3.1 Sources of Secondary Data

This secondary data analysis attempts to review all available private security data from
government sources, commercial sources, and research or academic sources. Table 1
presents the government sources that collect information on private security. These include
national surveys conducted by the Census Bureau (Census), the Bureau of Labor Statistics
(BLS), the Department of Labor‘s (DOL) O*NET online, and the Congressional Research
Service. Table 2 presents the commercial sources, including Dun and Bradstreet (D&B),
which maintains a national database on establishments across all industries in the United
States, and Security Magazine, which conducts an annual survey of the top 500 security
firms in the United States. Table 3 presents the research or academic organizations that
have collected data on private security, including Hallcrest, which conducted the first
comprehensive study on private security, and ASIS International. Both of these
organizations conducted federally funded studies.

Tables 1, 2, and 3 also illustrate how these secondary data sources defined private security
with respect to guarding. One of three approaches was used by each of these sources to
sample and collect data: an industry approach, an occupation approach, or a combination of
the two.

31
 Table 1. Government Studies with Data on Private Security Industry and
Segments of Private Security Industry Covered by Each
Census Business Surveys—County Business Survey/Economic Survey/Census Service
Annual Survey
 Body guard services  Patrol services, security  Protection services (except
armored car, security
 Guard dog services  Personal protection services (except
security systems services) systems, personal or
 Guard services property)
 Parking security services
 Property protection services
(except
 Protective guard services
armored car, security systems)
 Security guard services
 Excludes security patrol services
Bureau of Labor Statistics (BLS) Business Surveys—BLS Occupational Outlook Handbook,
Occupational Employment Statistics (OES) survey, Census of Fatal Occupational Injuries
(CFOI), Survey of Occupational Injuries and Illnesses (SOII)
Definitions vary by survey
BLS Occupational Outlook Handbook OES and SOII
 Guard services  Security guards
 Investigative services  Excludes private detectives and investigators
 Excludes armored car services
CFOI
 Security guards
 Gaming surveillance officers
BLS Household Surveys—Current Population Survey (CPS)
 Security guards
 Gaming surveillance officers
 Excludes private detectives and investigators
O*NET OnLine (DOL)
 Security guards
 Excludes private detectives and investigators
Congressional Research Service
 Security guards
 Excludes private detectives and investigators

Table 2. Commercial Studies with Data on Private Security Industry and

Segments of Private Security Industry Covered by Each
Dun & Bradstreet
 Polygraph service  Burglary and robbery protective service
 Security guard and patrol service  Guard dogs
 Armored car service  Fingerprinting
 Detective agencies  Investigators
Security Magazine
 All private security related occupations

32
 Table 3. Research Organization Studies with Data on Private Security Industry
and Segments of Private Security Industry Covered by Each
Hallcrest Reports
Survey used to obtain data on hours of training received
 Security guards and managers
Survey to obtain firearms training and use of force data
 Security guards
ASIS Scope and Emerging Trends
 All private security related occupations
RAND
 Security guards

The industry approach to defining private security involves categorizing companies into specific
segments or industries that best represent their function. For example, telecommunications
companies like AT&T would fall under the telecommunications industry, while private security firms
like Securitas would be classified under the private security guarding services industry. Data sources
such as the Census Business Surveys (County Business Survey, Economic Census, and Census Service
Annual Survey), Dun and Bradstreet (D&B), and Security Magazine employ this approach for
sampling and data collection. This method is particularly useful for analyzing contract security firms,
as they can be identified within specific industry segments. It also facilitates the collection of
company-level statistics rather than individual-level data.

However, it's important to note that data sources utilizing the industry approach may include
slightly different subsets of industries under the umbrella of private security. Most studies using this
approach rely on the 2007 North American Industrial Classification System (NAICS) or, in some
cases, the older Standard Industrial Classification (SIC) system. Table 4 presents the NAICS industry
codes used to define private contract security and private security guarding firms, while Table 5
provides the corresponding SIC codes. Private contract security is further divided into six detailed
NAICS codes, with code 561612 specifically identifying companies primarily engaged in providing
guard services. Under the SIC system, private contract security is divided into two codes, with SIC
code 7381 denoting firms primarily involved in guarding. D&B has created more detailed SIC codes,
splitting SIC code 7381 into three industry codes, one of which specifically represents guarding
services.

33
Table 4. NAICS Codes Related to Private Contract Security
Security
Officer
NAICS Title Description Industry
561611 Investigation Services This U.S. industry comprises establishments
primarily engaged in providing investigation
and detective services.
561612 Security Guards and This U.S. industry comprises establishments
Patrol Services primarily engaged in providing guard and
x
patrol services, such as bodyguard, guard
dog, and parking security services.
561613 Armored Car Services This U.S. industry comprises establishments
primarily engaged in picking up and
delivering money, receipts, or other valuable
items. These establishments maintain
personnel and equipment to protect such
properties while in transit.
561621 Security Systems This U.S. industry comprises establishments
Services (except primarily engaged in (1) selling security
Locksmiths) alarm systems, such as burglar and fire
alarms, along with installation, repair, or
monitoring services or (2) remote
monitoring of electronic security alarm
systems.
561622 Locksmiths This U.S. industry comprises establishments
primarily engaged in (1) selling mechanical
or electronic locking devices, safes, and
security vaults, along with installation,
repair, rebuilding, or adjusting services or
(2) installing, repairing, rebuilding, and
adjusting mechanical or electronic locking
devices, safes, and security vaults.

The occupation approach to studying private security, employed by sources such

as the BLS Occupational Outlook Handbook and the Current Population Survey,
focuses on the specific positions held by individuals during their employment.
Occupations are categorized into broader groupings to facilitate sampling and
data collection. For instance, the Standard Occupation Classification (SOC)
system, defined by the Department of Labor and used by various government
sources, includes several occupations within its definition of security guards.
These occupations encompass store and facility guards, bodyguards, bouncers,
armored car guards, and watch guards.

The duties attributed to security guards within the SOC system involve guarding,
patrolling, or monitoring premises to prevent theft, violence, or violations of
rules. This occupation-based approach provides a comprehensive understanding
of the roles and responsibilities within the private security sector, enabling the
collection of relevant data for analysis and research purposes.

34
 Table 5. SIC Codes Related to Private Contract Security
Security
Officer
SIC Title Descriptiona Industry
7381 Detective, Guard, and This category comprises establishments
Armored Car Services primarily engaged in providing detective,
guard, and armored car services.
7381-00 Detective and Armored n/a
Car Services
7381-01 Guard Services n/a x
7381-02 Detective Services n/a
7382 Security Systems This category comprises establishments
Services primarily engaged in monitoring and
maintaining security systems devices, such
as burglar and fire alarms. Establishments
of this business may sell or lease and install
the security systems, which they monitor
and maintain.
a
SIC codes are defined by the federal government at the 4-digit level. Commercial companies that
maintain establishment databases (such as D&B or InfoUSA) have developed a more detailed set of
SIC-codes at the 6- or 8-digit level. The 6-digit codes shown in Table 5 were created by D&B.

The Congressional Research Service (Parfomak, 2004a) conducted a study on private security
using secondary data but employed an occupation approach to collect its data. This approach
proves valuable for analyzing the broader field of private security and security-related
occupations across all industries. It encompasses private security officers employed by both
contract security firms and proprietary (non-security) firms. Moreover, the occupation approach
enables the gathering of detailed employee-level characteristics, including demographic
information, as it focuses on individuals rather than the entire company or industry.

Alternatively, a combination approach combines elements of both the industry and occupation
approaches. It typically involves selecting a sample of companies from predetermined industries
and then selecting individuals within those companies to interview. For instance, in the context of
private security, individuals who serve as private security officers would be chosen. Sources such
as the Occupational Employment Statistics (OES) survey, O*NET OnLine, the Hallcrest reports, the
ASIS Scope and Emerging Trends report, the Census of Fatal Occupational Industries (CFOI), and
the Survey of Occupational Injuries and Illness (SOII) have utilized this combination approach to
define private security.

Data obtained through the combination approach allows for the assessment of both contract
security firms and proprietary firms. These sources directly contact employees, enabling them to
determine whether the employees are working for a contract firm or directly employed by the
company from which they were selected. The combination approach's design facilitates the
acquisition of comprehensive and nuanced insights into the private security landscape.

35
 The sources discussed in this document offer valuable information at both the industry and
occupational levels, allowing for comprehensive analysis. Data obtained from these sources
enables measurements and insights at both levels of analysis.

However, it is crucial for analysts to be mindful of how the population of interest is defined,
regardless of the sampling and data collection approach employed. Even slight variations in the
scope of the studies can result in differences in the published statistics. For instance, when using
the industry approach, the definition of contract security firms may vary between the Census
surveys and D&B. In particular, the Census surveys may exclude armored car services, while D&B
includes them in their data. Similarly, the occupational approach may involve grouping different
sets of occupations for publication. For example, the Current Population Survey (CPS) incorporates
private security guards and gaming surveillance officers, whereas other sources such as the BLS
Occupational Outlook Handbook and the Congressional Research Service only include security
guards as defined by the Standard Occupation Classification (SOC) system. Therefore,
understanding the nuances in the definitions and scopes of the studies is essential for accurate
interpretation of the published statistics.

3.1.1 Survey Methodologies Used by Secondary Data Sources

Understanding the data collection methodology used by each secondary data source is crucial in
order to assess the representativeness of the data for the entire private security field. It also provides
insights into the data quality, including factors such as response rates and potential measurement
errors or biases. This section provides a summary of the data collection methodologies employed by
each secondary data source, as it directly influenced the type and frequency of information included
in this analysis.

Table 6 presents the percentage of outcomes analyzed based on the number of times a particular
source was used. For instance, the Census Surveys contributed data on 13.3% (or 4) of the 30
outcome variables related to Employees, 18.8% (or 3) of the 16 outcome variables related to Budgets
and Licensing, and no data on Security Powers or Operations. Generally, the secondary sources
provided data on one (50%) or two (31.2%) specific areas of interest, but not across all domains.

The government studies, which encompass various surveys, offer statistics on private security and
are often conducted periodically, allowing for trend analysis. These studies employed diverse
methodologies, but all adhered to protocols set by the Office of Management and Budget (OMB).
These protocols require a minimum 80% response rate and adherence to rigorous statistical
guidelines. As a result, the data from these studies are of high quality with minimal bias.

36
 Table 6. Percentage of Outcome Variables Contributed by Secondary Data
Source

Type of Outcome Variable

Budgets and
All Employees Licensing Security Operations
(54 (30 (16 Powers (7
Source Outcomes) Outcomes) Outcomes) (1 Outcome) Outcomes)

Census Surveys 13.0% 13.3% 18.8% 0.0% 0.0%

Economic Census 7.4% 6.7% 12.5% 0.0% 0.0%
Service Annual Survey 1.9% 0.0% 6.3% 0.0% 0.0%
County Business 3.7% 6.7% 0.0% 0.0% 0.0%
Patterns
BLS Establishment 13.0% 13.3% 0.0% 0.0% 42.9%
Studies
OES 3.7% 6.7% 0.0% 0.0% 0.0%
Occupational Outlook 3.7% 6.7% 0.0% 0.0% 0.0%
Handbook
CFOI 1.9% 0.0% 0.0% 0.0% 14.3%
SOII 3.7% 0.0% 0.0% 0.0% 28.6%
CPS 9.3% 16.7% 0.0% 0.0% 0.0%
O*NET OnLine 3.7% 6.7% 0.0% 0.0% 0.0%
Congressional Research 9.3% 10.0% 12.5% 0.0% 0.0%
Service
D&B 9.3% 10.0% 12.5% 0.0% 0.0%
Security Magazine 5.6% 3.3% 12.5% 0.0% 0.0%
Hallcrest Reports 14.8% 16.7% 12.5% 100.0% 0.0%
ASIS Scope and 11.1% 3.3% 6.3% 0.0% 57.1%
Emerging Trends
RAND 3.7% 6.7% 0.0% 0.0% 0.0%
State Licensing Boards 7.4% 0.0% 25.0% 0.0% 0.0%

The Census Business surveys, which encompass the Economic Census, the 2007 Service Annual
Survey, and the 2007 County Business Patterns, are establishment surveys that employ the
industry approach to collect data. The Economic Census and the 2007 Service Annual Survey
utilized the same methodology, while the 2007 County Business Patterns relied on administrative
data extracted from the Census business registry. In the Economic Census and 2007 County
Business Patterns surveys, businesses were categorized into two groups: those receiving a report
form and those that did not.

37
The report form was sent to two categories of businesses: large employers, which included all
multi-establishment firms and employer firms with payroll exceeding a specified cutoff, and a sample of
small employers, which consisted of single-establishment firms with payroll below a specified cutoff. In
cases where specialized data required more than administrative records, the report form was also sent
to small employers within certain industries.

Small employers in the stratum who did not receive a

report form were not part of the small employer sample. Statistics for businesses in the report form
stratum were based on data provided by respondents, while statistics for businesses not sent a report
form were derived or estimated from administrative records of other federal agencies. Some firms
received a condensed version of the report form solely to collect industry classification information.
Participation in the Economic Census is mandatory as per Title 13 of the United States Code.

The BLS establishment studies encompass several surveys, namely the OES survey, Occupational
Outlook Handbook, CFOI, and SOII. The OES survey, which is the largest BLS establishment survey,
serves as the data source for the Occupational Outlook Handbook. The CFOI and SOII are separate
business surveys conducted by the BLS.

The OES program conducts a semiannual mail survey to estimate employment and wages for specific
occupations. It collects data on wage and salary workers in nonfarm establishments, excluding
self-employed individuals. Occupational estimates are produced for approximately 800 occupations,
categorized by geographic area and industry, with over 450 industry classifications at the national level.
The OES program surveys approximately 200,000 establishments per panel every 6 months, completing
data collection for 1.2 million establishments over a period of 3 years. The response rate for the 2008
OES survey was 74.25%.

Safety data is obtained from the BLS injuries, illnesses, and fatalities website, which shares findings
from the Census of Fatal Occupational Injuries (CFOI) and the Survey of Occupational Injuries and
Illnesses (SOII). The CFOI provides a comprehensive count of fatal work injuries in the United States,
utilizing diverse state, federal, and independent data sources to ensure accuracy and completeness. The
SOII is an annual national survey that reports nonfatal injuries and illnesses by occupation. Participating
states gather the data, and both state and national estimates are generated. In states that do not
participate, the BLS administers the survey. Establishments are legally obligated to maintain records of
specific workplace injuries, which are then used for injury and illness classification in selected
establishments.

38
types of workplace injuries, and these data are used to classify injuries and illnesses for
selected establishments.

BLS Household Surveys. The Current Population Survey (CPS) is conducted by BLS, but
unlike their other studies it is a sample of households rather than businesses (BLS, 2010b).
The CPS collects information on the labor force status of the civilian noninstitutional
population 15 years of age and older, although labor force estimates are reported only for
those 16 and older. Persons under 16 years of age are excluded from the official estimates
because child labor laws, compulsory school attendance, and general social custom in the
United States severely limit the types and amount of work that these children can do.
Persons on active duty in the U.S. Armed Forces are excluded from coverage. The
institutional population, which also is excluded from coverage, consists of residents of penal
and mental institutions and homes for the aged and infirm. The CPS is collected each month
from a probability sample of approximately 60,000 households. Respondents are assured
that all information obtained is completely confidential and is used only for the purpose of
statistical analysis. Although the survey is conducted on a strictly voluntary basis, about 4%
of eligible households refuse to cooperate each month. Another 3% to 4% are not
interviewed because of difficulties in making contact.

Other Government Surveys. In addition to the Census Bureau and BLS, several other
government sources provide data on private security. These include O*NET OnLine, funded
by the Department of Labor, and the Congressional Research Service. O*NET OnLine is a
two-stage survey of businesses and workers within selected businesses. Data are collected
on over 900 occupations (O*NET OnLine, 2008). Information on the knowledge required,
work context, skills required, work activities, and tasks for each occupation are collected
through standardized questionnaires (i.e., the same questionnaire is used for all
occupations). The O*NET survey also collects demographic characteristics for each of its
respondents. The response rate among workers is 65%. While this response rate is lower
than the 80% threshold used by the OMB as an indicator of potential bias due to
nonresponse, O*NET OnLine has conducted nonresponse bias analyses and found that
potential bias due to nonresponse is small. The Congressional Research Service published
two reports that included data on private security (Parfomak, 2004a; Parfomak, 2004b).
These data were based on a review of administrative records and data published in other
government reports.

3.1.1.2 Commercial Studies

Two commercial sources were used in the secondary data analysis: the D&B frame of
businesses in the United States and Security Magazine‘s 2009 survey of the top 500 security
firms. D&B creates its frame through a combination of credit reports and yellow and white
page telephone books (Dun & Bradstreet, 2003–2010). It contains over 15 million
businesses in its database. Its collection of credit reports contains the industry each

39
business is classified under and the revenue earned during the past year. D&B can provide
information only at the industry level and, therefore, was used only for statistics on contract
security firms, which can be defined by a set of industries (see Tables 4 and 5).

Security Magazine‘s survey (McCourt, 2009) provides data on the level of private security
used based on several different criteria (e.g., employment and expenditures) by industry
segment. Data were collected directly from organizations and were estimated using public
records for organizations that did not respond. Responding organizations self-selected their
classification across 16 industry sectors:

 Education (Colleges and Universities, K–12);

 Casinos, Hospitality, Arenas and Entertainment;
 Finance/Insurance/Banking;

 Government (Federal, State, and Local);

 Construction, Real Estate, and Property Management;
 Energy, Utilities, Power, Gas, Nuclear, and Water;

 Business Services;
 Industrial and Manufacturing;
 Retail, Restaurants, and Food Service;
 Agriculture/Farming/Food;

 Information Technology, Communications, and Media;

 Transportation, Logistics, Warehousing, and Supply Chain;
 Diversified Companies;
 Ports and Terminals: Sea/Land/Air; and

 Healthcare/Medical Centers/Hospitals.

Any organization within these 16 sectors could participate in the study, and Security
Magazine‘s outreach program reaches 10,000 organizations to encourage participation. Of
the top 500 companies, 365 submitted data (a 73% response rate). Over 700 organizations
in total provided data. However, the survey design involves a convenience sample, rather
than a random sample of businesses; thus, the outreach is not random, which can have a
biasing effect on estimates if the types of organizations that do not participate are different
from those that do participate. Also, with this approach, the precision of the estimates
cannot be evaluated (i.e., standard errors cannot be produced).

3.1.1.3 Research Organization Studies

Three research organizations provide data on private security: Hallcrest Systems, Inc.,
ASIS, and RAND. Hallcrest I (Cunningham et al., 1985) data on use of force, detention

40
powers, and firearm authority were based on a case study in Baltimore, MD, and Multnomah
County, OR. Among companies that agreed to participate, a sample of security officers was
selected which included both proprietary and contract security officers. However, because
the companies that agreed to participate were not random, the sample was skewed such
that a disproportionate number of the proprietary officers had special forces training that
the contract security officers did not. Moreover, the survey used in the case study achieved
only a 27% response rate. As indicated in the report, these data are not representative of
the private security population. Thus, the statistics based on this survey can be used to
make inference only on this specific sample population and cannot be generalized.
Furthermore, the Hallcrest studies are slightly dated and it is uncertain how much the
security industry landscape has changed since their publication.

The ASIS Scope and Emerging Trends Report (ASIS Foundation, 2005) is based on a sample
of 4,000 businesses across nine industry sectors. Ward‘s Business Directory was used as the
frame from which businesses were selected. The companies varied in size, but the allocation
of sample across the nine industry segments and company size was not provided in the
report. The survey mode was paper (via mail) or web, with an abbreviated nonresponse
follow-up interview of key questions conducted by telephone. The study reports a response
rate of 21.6%; while the low response rate increases the potential for biased estimates, the
bias may be minimal if the response distribution mirrors the population. Because of a lack of
external information regarding the sampled establishments, survey weights were not
created. Instead, to minimize the potential for biased estimates, the authors analyzed the
data separately within each industry sector. Thus, the authors avoided having a sector with
a high response propensity from dominating the overall estimate. Furthermore, because of
lack of frame information about each of the sampled businesses, the authors indicated that
a nonresponse bias analysis was not conducted. Therefore, we cannot conclude whether the
participating businesses are different from those that did not respond to the survey.

RAND published a report that included data on private security (Kakalik & Wildhorn, 1971a,
1971b, 1971c, 1971d). These data were based on a review of books, articles, reports, laws,
court rulings, financial and insurance industry data, census and labor statistics, public law-
enforcement officials, private security industry executives, ―company privileged information‖
files, private security employees, and officials and files of agencies that regulate the private
security industry.

41
 4. TRENDS AND EMPLOYEE CHARACTERISTICS
IN PRIVATE SECURITY

The private security industry has expanded its role in safeguarding critical
infrastructure and providing other security-related services. Two estimates of the
size of private policing in the United States originate from studies funded by the
National Institute of Justice (NIJ). The initial comprehensive report, Hallcrest I
(Cunningham et al., 1985), was among the first to document the changes in
private security personnel and expenditures in comparison to public policing.
Hallcrest II (Cunningham et al., 1990) determined that private security had
become the nation's primary security resource in terms of personnel employed
and total expenditures. The report attributed the growth of private security in
relation to public law enforcement to various factors, including an increase in
workplace crime, a growing fear of crime, reduced public expenditure on
protection, and an enhanced recognition of the effectiveness of private security
measures.

4.1 Private Security Contract Firms

Estimating the number of contract security firms can be achieved through various sources,
allowing for trend observation and comparison of estimates. Figure 2 illustrates the progression
of contract firms over time, commencing in 1967. The data, derived from six sources, reveal an
overall growth in the number of contract security firms, rising from 4,000 in 1967 to just under
10,000 in 2009. However, there are data gaps between 1969 and 1980, as well as between 1990
and 2002. Additionally, when multiple sources present data for a specific year, there is not always
agreement among them.

Starting in 2002, D&B (Dun & Bradstreet) and the Economic Census provide multiple data points
that align closely, with the exception of a spike in the number of contract firms reported by D&B
from 2006 to 2008. However, the D&B count in 2009 matches the estimate from the Economic
Census. Several factors may account for this spike in D&B data. For instance, it coincides with the
onset of the U.S. economic downturn, suggesting that some contract security companies may
have opened during prosperous times but subsequently closed as the economy weakened. The
spike could also be influenced by D&B's methods of obtaining the count. D&B relies on
companies self-assigning their primary industry, so it is possible that more companies identified
themselves primarily as guard service providers during those years but changed their designation
by 2009. Another plausible reason for the increased count in D&B data is the creation of more
private security firms during the peak of the Iraq war, which aligns with this particular time
period. These firms may have dissolved as the U.S. began withdrawing its soldiers.

42
Figure 2. Number of Contract Security Firms in the United States by Data Source,
1967–2009

Sources: Census County Business Patterns (2007); Dun & Bradstreet (2002–2009); U.S. Census
Bureau, Economic Census (2002, 2007); Hallcrest Report I (Cunningham et al., 1985); Hallcrest
Report II (Cunningham et al., 1990); RAND (Bird et. al., 1971).

When developing an establishment survey, a crucial decision revolves around

whether the unit of measurement should be the establishment itself or the
individuals of interest within the establishment. Figure 3 presents two charts that
exemplify how this choice impacts the survey design for future studies. One chart
displays the distribution of contract firms, while the other showcases the
distribution of employees within contract firms (Dun & Bradstreet, 2010). Similar
to other industries, around 80% of contract firms have 1 to 9 employees, whereas
approximately 70% of contract firm employees work for firms employing 100 or
more individuals. Consequently, to gain insights into the contract firms
themselves, it becomes necessary to include small establishments in the sample.
However, if the study's objective is to comprehend the employees themselves, it
may be feasible to exclude or minimize focus on smaller establishments since a
relatively small percentage (20%) of contract firms employ the majority of
contract employees.

43
 Figure 3. Distribution of Establishments and Employees by Size of Firm (Number
of Employees)

Source: Dun & Bradstreet (2009).

4.2 Private Security Employment

Figure 4 illustrates the historical trend of the total number of private security
officers in the United States across all industries, as well as the number of officers
employed specifically by contract firms. Over time, ten different sources have
monitored either the total number of private security officers nationwide or the
count of officers working for contract firms.2 Between 1980 and 2010, both total
employment and employment within contract firms experienced an approximately
80% increase in the number of employees. However, the majority of this growth
occurred during the 1980s and 1990s, with limited to no significant growth
observed in the past decade. Furthermore, since 1997, approximately 60% of the
overall increase in employment within the private security sector took place prior
to that year.

44
 Figure 4. Total Number of Private Security Officers and Contract Security Officers
in the United States by Data Source, 1980–2009

Sources: Bureau of Labor Statistics Occupational Outlook Handbook (BLS, 2009c); Census County
Business Patterns (2007); Congressional Research Service (2004); Current Population Survey (BLS,
2010b); Dun & Bradstreet (2009); U.S. Census Bureau, Economic Census (2002, 2007); The
Hallcrest Report I (Cunningham et al., 1985); The Hallcrest Report II (Cunningham et al., 1990);
BLS (2010c); O*NET OnLine (2006); RAND (Bird et. al., 1971).

Approximately 60% of private security officers are employed by contract security firms, indicating
that the remaining 40% are proprietary security officers. Although there has been consistency in
the employment trends within the private security sector, the estimates for each type of
employment (i.e., total employment in the United States and contract employment) have shown
variations of approximately 200,000 employees in a given year. These discrepancies can be
attributed to three primary factors.

Firstly, sampling error, which is inherent in survey data, can contribute to the variation in
estimates. Sampling error arises from the fact that not all individuals within the target population
are directly contacted during the survey. If confidence intervals were available for these estimates,
it is possible that the differences would not be considered statistically significant. However, the
necessary standard errors to calculate confidence intervals are not always provided.

Secondly, variations in data collection methods by each secondary source can also account for the
discrepancies. For instance, the Occupational Employment Statistics (OES) survey samples business
establishments, while the Current Population Survey (CPS) samples households. The choice of
sampling frame and unit can have a significant impact on the derived estimates from a survey.

45
Lastly, definitional differences among the secondary data sources contribute to the variations in
estimates. As mentioned in Section 1.2, each source utilizes slightly different definitions of the private
security industry and the contract security industry. These definitional disparities can significantly
influence nationwide estimates, further adding to the observed differences.Taken together, sampling
error, differences in data collection methods, and definitional variations all contribute to the
fluctuations in estimates regarding private security employment and contract security employment.

Data from three secondary sources provide information on the percentage of private security officers
who work part-time. Figure 5 illustrates that each source presents data at a different time point.
Comparing these estimates suggests a potential decrease in the overall percentage of security officers
working part-time (Kakalik & Wildhorn, 1971a, 1971b, 1971c, 1971d; Parfomak, 2004a; BLS, 2009b).
However, it is important to note that these estimates encompass a wide range within which the true
estimate may fall.

According to RAND's data, in 1969, the percentage of private security officers working part-time
ranged between 20% and 50% (Kakalik & Wildhorn, 1971a, 1971b, 1971c, 1971d). Similarly, the
Congressional Research Service provided an estimate ranging from 20% to 30% in 2004 (Parfomak,
2004a). The BLS Occupational Outlook Handbook (2009b) did not specify a confidence interval for its
estimate. Thus, if the lower bound of the confidence interval for each time point represents the
accurate estimate, then the trend remains relatively unchanged. However, if the upper bound is a
more accurate representation, the decrease in the proportion of part-time workers is even more
substantial than indicated.

Based on the CPS data (BLS, 2010b), 16.2% of workers were classified as part-time in 2004, and this
figure decreased to 16.1% in 2008. Therefore, while historically the percentage of security officers
working part-time was higher than the national average, in recent years it has declined to align with
the national average.

When comparing estimates over time, it is crucial to consider how each source defines part-time
work. For instance, one source may include individuals who exclusively work as private security
officers but do not meet the threshold of hours per week to be considered full-time, while another
source may encompass individuals who "moonlight" as private security officers, including off-duty
police officers. Our analysis of source methodologies reveals that the Congressional Research Service
explicitly states that its definition of part-time workers includes off-duty police officers. The other two
sources imply this inclusion but do not explicitly state it. For instance, the BLS Occupational Outlook
Handbook indicates that part-time workers are "supplementing their primary occupation," without
specifying whether off-duty police officers are included in that primary occupation. Furthermore,
RAND simply mentions that part-time workers "usually work on weekends" and that younger
part-timers are sometimes students, teachers, and military personnel.

46
 Figure 5. Percentage of Private Security Officers Who Work Part Time, 1969–
2008

Sources: Bureau of Labor Statistics Occupational Outlook Handbook (BLS, 2009b), Congressional
Research Service (2004), RAND (Bird et. al., 1971).
Note: Error bars are due to standard errors.

4.3 Services Performed by Private Security Organizations

Private security organizations offer a range of services encompassing guard services, alarm
monitoring, investigation, armored transport, correctional facilities management, systems
integration and management, security consulting, pre-employment screening, information security,
and various others. In 2005, approximately 34.5% of private security functions were outsourced to
contract firms (Figure 1).

Figure 6 provides the percentage of companies that indicated outsourcing for specific security
functions. Among these functions, alarm installation, maintenance, and repair had the highest
outsourcing rate at 69.4%, followed closely by alarm monitoring services at 68.9%. Substance abuse
testing ranked third with a rate of 61.6%, and background investigations were outsourced by 43.8%
of the companies. Guarding services, on the other hand, were outsourced to a contract firm by
30.3% of the surveyed companies (The ASIS Foundation, 2005).

47
Figure 6. Percentage of Companies Outsourcing Security Services by type of
Service, 2005

Source: The ASIS Foundation, 2005.

In 2005, the ASIS survey also collected data on security-related technologies that
companies had purchased or planned to purchase in the near future (The ASIS Foundation, 2005). As shown in
Figure 7, computer and network security system technology had been purchased or was in the purchase plan
for the greatest percentage of companies (39.7%),
followed by monitoring and alarm technology such as burglar alarms (26.3%), closed circuit
television (23.8%), fire protection systems (23.8%), and video cameras (23.6%).

48
Figure 7. Percentage of Companies That Have Purchased or Plan to Purchase
Security-Related Technology, 2005

Source: The ASIS Foundation, 2005.

4.3.1 Guard Services

A survey conducted among security services company managers revealed that
guarding services, consisting of 35% unarmed guards and 11% armed guards,
accounted for nearly half of the services offered by security firms (La Vigne,
Hetrick, & Palmer, 2008). The National Association of Security Companies
(Security Solutions, 2006) reported that over 1 million guards are employed by
more than 11,000 to 15,000 private security companies in the United States.
While there may be armed guards among them, a study by Cunningham and
colleagues in 1985 indicated a declining trend in the number of armed guards (p.
55). Guards are utilized across various sectors to safeguard individuals and
properties, including critical infrastructure, commercial establishments,
institutions, and residential areas. They are increasingly being employed to
support law enforcement and emergency personnel, as well as to provide
security for military bases worldwide (Security Solutions, 2006). Notably, the
practice of employing guards to protect executives is gaining popularity among
U.S.
49
 companies, recognizing the executives as valuable assets (Lerer, 2007). Some
companies like Oracle and Ford Motor invest over $1 million annually to ensure
the security of their top executives. Executive protection typically involves tasks
such as visitor screening at gatehouses, guarding the perimeter of executives'
personal residences, providing round-the-clock protection, and accompanying
them on out-of-town trips (Lerer, 2007).
4.3.2 Alarm Monitoring
Alarm services are widely utilized in retail, residential, and manufacturing markets. These
services involve the deployment of sensors that detect intrusion and transmit a signal either at
the premises or to a remote location (Cunningham et al., 1985). Operating around the clock,
central stations play a crucial role in monitoring various alarms and promptly notifying the
relevant parties, including the police, fire department, and emergency medical services (p. 60).

As for alarm installations in 2006, there was a relatively equal distribution among different
customer segments. Residential customers accounted for 33% of installations, commercial
customers comprised 37%, and large industrial customers represented 30% (based on the 2006
installation business report from Security Sales & Integration, 26[13], as cited by the Electronic
Security Association, n.d.).
4.3.3 Investigation
In 2008, around 45,500 private detectives and investigators were employed in the United States by
private detective agencies, state and local government, department stores, financial institutions,
insurance agencies, and employment security services (Editors of McGraw-Hill and the U.S.
Department of Labor, Bureau of Labor Statistics, 2008). Private investigators are hired to collect
information through observation and interviews to solve noncriminal cases, including missing
persons, medical malpractice, domestic or marital issues, product liability, and more (Cunningham et
al., 1985; Dempsey, 2008). Additionally, private corporations or organizations may hire private
investigators for criminal cases such as credit card fraud, internal theft, insurance fraud, and in some
cases corporateintelligence and industrial espionage (Dempsey, 2008; Gill & Hart, 1999).

4.3.4 Armored Transport

According to the Gale Group (2010), approximately 150 armored transport companies exist
in the United States. Armored transport firms traditionally provide armored vehicles and
armed personnel (often interstate) to protect and deliver currency, coins, securities, bonds,
gold, silver, and other precious metals, credit cards, jewelry and other items of high intrinsic
value (Cunningham et al., 1985). These activities may include counting, sorting, and
packaging the currency from automatic teller machines or emptying parking meters (p. 66).
The security provided by these firms comes with great risks because of the dangers involved
in transporting these materials. According to Dempsey (2008) 70 armed robberies occur
each year in the armored transport industry resulting in an average of 5 deaths of armored
transport personnel.

50
4.3.5 Correctional Facilities Management
Although controversial, privately run prisons and jails have been expanding since the 1980s.
Private corrections companies typically take on one of two types of agreements: (1) they
are contracted to manage a government prison, or (2) they provide inmate housing (in-
state and out-of-state) in private-run correctional facilities (Gilroy, Summers, Randazzo, &
Harris, 2010). In an effort to save money and relieve overcrowded prison systems,
governments are increasingly outsourcing their corrections services to private companies. In
addition to operating correctional facilities, private corrections facilities also operate under
performance-based contracts (i.e., rehabilitation programs, healthcare, educational and
vocational training, state-of-the-art facilities, and more efficient operations). In 2007, an
average of 8% of all prisoners (7% state and 16% federal) were incarcerated in private
facilities (State University of New York at Albany, 2008, table 6.32.2007). The Corrections
Corporation of America (CCA), which houses approximately 75,000 inmates in more than 60
facilities, reports that it is the largest private corrections system in the nation (Taub, 2010)
and the fourth-largest prison system behind the federal government and two states
(Corrections Corporation of America, 2008). CCA guards are assigned to provide security for
housing units, monitor inmates, conduct perimeter checks, and report and document
incidents. In addition to managing prison, jail, and detention facilities, the company also
specializes in the design and construction of facilities and inmate transportation. The GEO
Group, another industry leader in private corrections, manages more than 53,000 beds in
15 states, accounting for 25% of the industry‘s bed market share. GEO provides correctional
and detention services for federal, state, and local government agencies at the minimum,
medium, and maximum security levels (The GEO Group, 2010).

While private corrections systems are popular, some have argued that the actual cost
savings have yet to be determined (Steinbauer, 2009). Corrections officer unions and high-
profile media incidents have caused some to reassess the benefits of private correctional
facilities. The incentive to cut costs and remain competitive has highlighted the potential to
compromise professionalism, staffing levels, and quality of service (Zito, 2003).
Accountability and oversight have also raised concerns as most contracts require
government monitoring, internal audits and compliance reviews, which can become costly
compared to regulation in public correctional facilities (Zito, 2003; Gilroy et. al, 2010).

4.3.6 Systems Integration and Management

The goal of systems integration is to merge existing systems (e.g., video surveillance,
access control, intrusion detection) through a computerized process so that data are
captured once and stored in a central location. One integrated system could address
multiple functions, such as information security, physical security, fire safety, and many
others (Dempsey, 2008).

51
4.3.7 Security Consulting
Security consultants work in diverse fields, including engineering, security management,
disaster management, and computer protection (Cunningham et al., 1990). The services
consulting companies provide may additionally consist of designing safety systems and
growing specifications for technological and physical security measures, conducting security
training, administering polygraph and psychological stress evaluations, and imparting
professional advice on loss prevention and threat administration (Hess, 2009).

4.3.8 Pre-Employment Screening

Organizations can also sense the need to screen manageable personnel earlier than making
a job offer.The most frequent screening techniques include checking out instruments, such
as a polygraph or psychological stress exam, and historical past investigations (Cunningham
et al., 1985). Background checks may be performed to shield an enterprise from damages
bobbing up from negligent hiring proceedings and résumé fraud or to comply with laws
requiring screening for certain positions (e.g., anyone who works with children). Employers
may additionally searching for an employee‘s credit history, crook file and intercourse culprit
registration, training records, personal references, and more (Privacy Rights Clearinghouse,
2009).
4.3.9 Information Technology Security
Implementing strategies to protect ―corporate data from unauthorized access, modification,
destruction, or disclosure, whether unintended or intentional,‖ is indispensable
(Peltier,2005, p. 11). In fact, a learn about conducted by way of the Computer Security
Institute printed that breach of statistics safety has price some businesses greater than $2
million in losses (Gordon & Loeb, 2002). Chief protection officers, or chief data safety
officers, are usually responsible for protecting an organization‘s digital assets. They make
certain that the organization‘s protection systems are suitable maintained, monitor consumer
get right of entry to and network security, and guard video surveillance equipment and get
right of entry to control structures (CSO Security and Risk, 2008).

4.4 Markets for Private Security

Various markets, such as fundamental infrastructure, commercial, institutional, and
residential, hire personal safety for the offerings described above. As of 2007, ―the
nonresidential market accounted for three-quarters of all personal protection
offerings demand‖ (Freedonia Group, 2008, pg. 1). The fashion is expected to
continue, as increase in the nonresidential market is anticipated through 2012
(Freedonia Group, 2008). Figure eight indicates the distribution of proprietary safety
officer employment by enterprise (BLS, 2010c). This parent offers an indication of
which industries are most likely to have their own security departments, however
now not always the most protection (i.e., the contract security officers utilized by
means of these industries are now not accounted for in the distribution). Most
proprietary safety officers are employed in Retail/Restaurants/Food Services
(16.7%), Casinos/Hospitality/Arenas/Entertainment (15.7%), Healthcare/Medical
Centers/Hospitals (12.9%), and Government (10.9%).

52
 This document is a research report submitted to the U.S. Department of Justice. This report has not
been published by the Department. Opinions or points of view expressed are those of the author(s)
and do not necessarily reflect the official position or policies of the U.S. Department of Justice.

Review of the Private Security Industry: Definitions, Challenges, and Paths Moving Forward

Figure 8. Number of Proprietary Security Officers per Employee by Industry

Sector, 2009

Source: Occupational Employment Statistics (OES) survey (BLS, 2010c).

In addition to understanding the distribution of proprietary safety officers throughout industries, it is

also beneficial to determine the attention of safety officers inside an industry. Figure 9
illustrates the wide variety of safety officers per complete employees in an enterprise sector.This
figure is primarily based on all protection officers used through agencies in an enterprise (i.e.,
contract and
proprietary protection officers). According to Security Magazine, in 2009, casinos and the
hospitality sector had the biggest attention of safety officers, with one safety officer
for each and every 38 employees. The transportation quarter had the lowest attention with one
security officer for each and every 417 personnel (McCourt, 2009).

53
 Figure 9. Number of Employees per Security Officer by Industry Sector, 2009

Source: Security Magazine (McCourt, 2009).

These ratios are a measure of concentration and not the whole range of safety officers in a
sector. This skill that a sector with a low awareness may rent extra protection officers in phrases
of absolute numbers, but the truth that the enterprise has so many different employees
consequences in a low concentration level

4.4.1 Critical Infrastructure

Critical infrastructure includes industry and manufacturing, utilities, and transportation. In the United
States, the vast majority of critical infrastructure is owned and operated by the private sector (Law
Enforcement-Private Security Consortium, 2009) and requires private security for protection (Hess,
2009). According to the Congressional Research Service (Parfomak, 2004a), approximately 50,000
security guards protect critical infrastructure in the United States. The National Infrastructure
Protection Plan (NIPP), established in 2009, built a partnership of government agencies and private
sector entities to enhance protection of critical infrastructure and key resources. Private security is
necessary to protect large sectors of our critical infrastructure, including industry and manufacturing,
utilities, and transportation (Hess, 2009). In manufacturing facilities and warehouses, internal theft is
a significant threat. Businesses may also need to secure against crimes such as sabotage and
espionage. Certain facilities, such as chemical plants and utilities facilities, are also potential sites of
terrorist activities. As for transportation, a variety of security services are used to protect cargo, mass
transit, airports, and airline transportation. Private security guards are commonly hired by air carriers
to conduct passenger and baggage checks; however, federal law enforcement officers usually provide
overall airport security (Hess, 2009). Mass transit

54
also makes use of private security. For example, the Amtrak Police Department is a private- sector
police force with more than 300 sworn officers (International Association of Chiefs of Police, 2004).
Some local transit systems also hire private guards. After shootings on city buses in Durham, North
Carolina, private police were hired to work in conjunction with city police officers in terminals and
on buses (Goldstein, 2007).

4.4.2 Commercial

Commercial security encompasses a range of markets, including offices and office buildings,
financial institutions, retail, and other businesses (e.g., lodging and hospitality, food service,
entertainment). The primary threat to office buildings is burglary and theft (Hess, 2009).
Common measures taken to protect against this type of loss include access controls (e.g.,
identification card or fob readers, coded access, biometric access), closed circuit television
(CCTV) surveillance, and security guards.
Financial institutions also suffer from losses involving theft (e.g., cash and stocks) and
regularly use guards and alarm monitoring systems. Larger financial institutions may also
hire investigators devoted to investigating identity theft and fraud, especially since the
federal government has reduced the number of federal investigators devoted to these
crimes (Goldstein, 2007). Following the FBI‘s reorganization after the 9/11 attacks, 2,400
agents were transferred to counterterrorism units, and replacements were not hired for
identity crime and fraud investigations (Shukovsky, Johnson, & Lathrop, 2007).
Retailers face a number of security issues, including shoplifting, vandalism, and employee
theft (Hess, 2009). To deter shoplifting, approximately 37% of retailers use uniformed
security guards (Dempsey, 2008). Other methods include physical controls, such as alarms
and surveillance equipment. Other commercial markets, such as hotels and restaurants,
increasingly use CCTV monitoring systems to monitor common areas against theft and
vandalism (Hess, 2009).

4.4.3 Institutional

Visitor control, internal and external theft, and fire are the major security concerns of hospitals and
other healthcare facilities (Hess, 2009), which may use security guards to patrol the hallways and
control access. Risks at educational institutions include the safety of students and staff, violence,
vandalism, and theft. To address these concerns, access control, lighting, and security guards may be
used in some facilities. For example, the Mackinac Center (1998) reported that districts in New York
City hired guards after experiencing problems with school violence. Because of their open
environments, colleges and universities use both proprietary and contractual security personnel to
secure their facilities (Hess, 2009).

55
 4.4.4 Residential

Private security may also be necessary in public and private housing. Indeed, the
installation of residential security systems more than doubled over a 5-year period in the
1990s (Brown, 1997; Dempsey, 2008). Other measures taken by homeowners may include
special locks and lighting, safes, and large dogs (Hess, 2009). Some gated communities
may also hire security guards to patrol the premises and monitor entrances. Similarly, some
public housing authorities use access control and CCTV surveillance services.

4.4.5 Government

Federal and local governments also seek the services of private security companies. In the
1950s, the city of Kalamazoo, Michigan, hired private police officers as deputy sheriffs; it is
thought to have been the first local government agency to do so (Joh, 2005). By the 1990s,
an estimated 45% of all local governments outsourced some of their services to private
police, compared with a reported 27% in the 1980s (Sklansky, 2006). These practices are
not uncommon as more private security guards are hired to guard government buildings,
public housing communities, and public parks (Sklansky, 2006).
The federal government manages its own law enforcement agency, known as the Federal
Protective Service (FPS), through the Department of Homeland Security. According to its
Web site, the FPS employs 15,000 contract security personnel to guard more than 9,000
federal government buildings and occupants, critical infrastructure, and other assets
(Federal Protective Service, 2010). Wackenhut Corporation has contracts to provide security
guards for the Liberty Bell in Philadelphia and to screen visitors at the Statue of Liberty in
New York City (Goldstein, 2007). Privatization of military functions has also seen an
upswing. According to Dickinson (2005), an estimated 20,000 individuals have been hired
as contract private military guards in Iraq. Private military guards may ―provide logistical
support to armed forces and also perform protection, training, consulting, and planning
services…. [and] some… actually engage in combat under contract‖ (Goodsell, 2007).

4.5 Demographics

The main sources for demographic information on private security officers are the CPS and
O*NET OnLine. These sources directly interviewed guards and, therefore, were able to
obtain detailed demographic information about guards specifically. The CPS provides data on the
distribution of private security officers by race. In 2008, about
53% of private security officers were white, 31% were black, and the remaining 16% were
Hispanic or Asian (Figure 10) (BLS, 2010b). The race distribution for the general workforce
is 70% white, 11% black, 14% Hispanic, and 5% Asian

56
According to O*NET data, in 2008, 46% of security officers had a high school education or less, 12%
had a bachelor‘s degree, and 42% had completed at least some college(Figure 11) (O*NET OnLine,
2008). According to the American Community Survey (2008)35% of the overall workforce obtained
an associate‘s degree or higher, 20% had some college, and 45% had a high school diploma or less.
Both the CPS and O*Net Online involve survey data, and therefore, their estimates have an
unreported amount of sampling error around them.

Figure 11. Distribution of Security Officers by Highest Level of Education

Obtained, 2008

Source: O*NET OnLine (2008).

The CPS also collected data for the years 2003 to 2008 on the gender of all private security
officers and of employees of contract firms (BLS, 2010b). The gender distribution for all
private security officers is based on an occupation-level estimate, and estimates of the
percentage of female employees in contract firms are based on an industry-level estimate.
This means that contract firm estimates include all of the other occupations employed in the
investigation and security services industry, such as administrative assistants and sales
representatives. However, the vast majority of the employees in the industry are security
guards. As shown in Figure 12, the percentage of private security officers who are female
increased slightly over time from 21% in 2003 to 23% in 2008. Among those employed by
contract security firms, the percentage that is female is slightly higher, ranging from 22% to

57
 26% between 2003 and 2008, respectively. However, the percentage of women in the
general workforce remained around 47% from 2003

Figure 12. Percentage of Total Private Security Officers and Contract Security
Officers Who Are Female, 2003–2008

Source: Current Population Survey (BLS, 2010b).

Note: Current Population Survey data are for security guards and gaming surveillance officers.

One demographic characteristic that is not available from any secondary data source is the
distribution of private security officers by age. This information is of interest because it can
provide some insight into the type of individuals who work as private security officers. For
example, age can be used as a proxy for years of experience. If the mode age is in the early
20s, then one may infer that a large portion of private security officers only have a few
years of experience. In addition, compared with an older skewing population, a younger
skewing population may have different implications on the expected growth of the
occupation or the type of individuals becoming private security officers. For instance if the
mode age of the occupation is in the 50s or 60s, then one may infer that a large portion of
the occupation will be retiring in the next few years, creating a potential shortfall in the
number of private security officers that will be needed in the next 5 or 10 years. Salary data, in
the form of a median hourly wage, are available over time from several
sources. Figure 13 presents the median hourly wage over time as collected by the OES
survey (BLS, 2010c) and the CPS (BLS, 2010b). According to both sources, the hourly wage

58
 increased by about 3% to 5% per year (the Congressional Research Service provided a
single point estimate in 2003 that was close to the OES estimate). However, although the
percentage change is similar between these sources, the wages themselves are different,

Figure 13. Median Hourly Wage by Data Source, 1997–2008

Sources: Congressional Research Service (Parfomak, 2004a), Current Population Survey (BLS,
2010b), Occupational Employment Statistics Survey (BLS, 2010c), U.S. Department of Labor (n.d.,
data for 1996–2009).

with the CPS wage being consistently higher. This difference is likely tied directly to how
each of these sources publishes estimates. The OES survey publishes data for private
security guards, but the CPS publishes data for private security guards and gaming
surveillance officers. The inclusion of gaming surveillance officers in the CPS estimates
pushes the median wage up when compared to the OES estimates. There is a steady
increase in hourly wages from 1997 through 2008, despite a constant federal minimum
wage from 1997 through 2006. After 2006, wages appear to increase at the same rate as
the minimum wage (U.S. Department of Labor, n.d.).

59
As of May 2008, median salary for private security professionals is $23,460, with pay scales
ranging from $16,680 to more than $39,360 a year (BLS, 2009b). The median salary for
private security is significantly lower than for public police. According to the BLS (2009c), the
median salary for public patrol officers is $51,410 per year as of May 2008, and the pay
scale for law enforcement ranges from about $30,000 to $114,000 per year (BLS, 2009c).
Private security companies submit bids to win contracts, and the industry is very
competitive; thus low contract bids lead to low wages for the guards (Margasak, 2007).
In addition to the overall median hourly wage, the CPS breaks down the median hourly
wage by gender for private security guards and gaming surveillance officers. Figure 14
presents the wages by gender from 2003 to 2008 (BLS, 2010b). The data indicate that the
wage gap has varied between 13% and 25% during this 6-year period. The large
fluctuations in this gap from year to year are partly due to sampling error, and therefore,
wages probably do not really increase or decrease as dramatically in a single-year period as
could be inferred from the data.

Figure 14. Median Hourly Wage by Gender, 2003–2008

Source: Current Population Survey (BLS, 2010b).

Note: Current Population Survey data are for security guards and gaming surveillance officers.

This analysis found no available data on security personnel benefits. None of the sources
covered fringe benefits, such as paid time off (vacation and sick leave), health insurance,
and other types of insurance such as disability and life. These types of data are difficult to
accurately measure in a general population survey because of the amount of specificity
necessary to provide useful information. For example, since most large companies offer

60
 such insurance, reporting the percentage of private security officers that receive health
insurance is of less utility than information on the level of benefits offered. However,
respondents may not be able to provide this level of detail, increasing the potential for
measurement error. Therefore, data on benefits are best collected at the company level by
a human resources representative, provided the company is willing to share this
information.

4.6 Revenue

Annual revenue for the private security industry is difficult to measure accurately because it is
largely contingent on how the industry is defined. A broader definition of the industry will result in
a higher estimate of the total revenue simply because the revenue of more companies will be
included. Figure 15 presents the total revenue (in billions) for contract security firms over time. In
general, revenue has increased anywhere from 400% to 600% since 1980.4 This fluctuation is
driven largely by how the contract security industry is defined, because that determines the set of
businesses from which the revenue estimates are drawn. For instance, in 2003 three sources
provided total revenue data among contract security firms with estimates that vary by up to $20
billion. At the high end, D&B estimated total revenue for the contract security industry at $30.5
billion dollars (D&B, 2003–2009). As indicated in Table 2 this estimate includes a wide range of
private security industries including, but not limited to, security guarding firms, armored car firms,
and detective service firms. The Congressional Research Service produced the lowest revenue
estimate at $11.0 billion (Parfomak, 2004a). This estimate was based on a search of administrative
records and focused solely on private security guarding firms. As indicated in Tables 1 and 2, the
Congressional Research Service has the most restrictive definition of private security contract
firms, focusing solely on guarding, while the Census Service Annual Survey has a slightly broader
definition, and D&B has the broadest definition. As expected, the revenue estimates correspond
to these definitions, with the Congressional Research Service estimate being the smallest,
followed by the Census Service Annual Survey estimate and D&B with the highest estimate.
Furthermore, even within a single source, revenue data can have large fluctuations. For instance,
the D&B revenue estimates fluctuate greatly between 2003 and 2009. These fluctuations in
revenue correspond directly with the fluctuations in the number of contract security firms
identified by D&B in Figure 2.

61
 Figure 15. Annual Revenue Earned Among Contract Security Firms by Data Source
(in Billions), 1980–2009

Sources: Census Service Annual Survey (2000–2007); Congressional Research Service (2003); Dun &
Bradstreet (2002–2009); U.S. Census Bureau, Economic Census (2002, 2007); The Hallcrest Report
II (Cunningham et al., 1990).

Figure 16 attempts to control for both the across- and within-source variations in the number of
contract firms by measuring a mean annual revenue per contract security firm (in thousands). The
number of sources in this figure is less than the number in Figure 15 because the number of
contract firms included in the revenue total is not available for all sources. This information was
available only from three sources.5 The D&B data still fluctuate greatly from year to year, but in a
different pattern compared to total annual revenue. Since controlling for the number of firms
does not impact the upward trend, something else, like how revenue data are collected, must be
influencing the D&B revenue data.

62
 Figure 16. Average Annual Revenue per Contract Security Firm by Data Source (in
Thousands), 1980–2009

Sources: Dun & Bradstreet (2002–2009); U.S. Census Bureau, Economic Census (2002, 2007);
Hallcrest Report II ( Cunningham et al., 1990).

Figure 17 looks at the revenue for the largest contract security firms. The 10 largest
companies (in terms of revenue) comprise 67% of the total revenue earned by contract
security firms (Parfomak, 2004a). The largest, Securitas USA, comprises 23.6% of the total
revenue earned by this industry. While this figure is only a snapshot in time and the exact
revenue figures may change from year to year, it is likely that the proportion of total
revenue earned by the largest companies remains relatively constant over time.
The growth in private security has been driven by the increasing level of outsourcing of
security functions for a number of areas (Greene, 2006). These areas include private
security hired to protect commercial offices, entertainment districts, and warehouses, as
well as the privatization of public safety functions in corrections and policing and the
growing emphasis on infrastructure protection. The increased use of closed-circuit television
has further fueled an increased demand for privately security staff to monitor video and
surveillance equipment.

63
 Figure 17. Annual Revenue (in millions) by Largest Contract Security Firms, 2003

Source: Parfomak (2004a).

Note: Financial reporting period may vary by company due to differing accounting practices. Statistics
include North American guard operations outside the United States.

4.7 Expenditures

Like revenue, expenditures are directly related to the size of an industry. Therefore, when comparing
expenditures across industry segments, it is important to standardize the expenditure amounts.
However, as shown in Figures 18 and 19, the manner in which the expenditures are standardized can
alter the interpretation of the data. Security Magazine‘s annual survey of the top 500 security firms
estimates the amount of spending on security- related services by revenue and by the number of
employees (McCourt, 2009). When security expenditures are standardized by total company revenue,
colleges and universities spend the most on security. However, when expenditures are standardized
by number of total employees, the energy industry outspends the next nearest industry by
approximately 350%. Furthermore, by this measure colleges and universities spend the ninth largest
amount on security.

64
Figure 18. Spending on Security as a Percentage of Revenue by Industry Sector,
2009

Source: Security Magazine (McCourt, 2009).

Note: Healthcare/Medical Centers/Hospitals industry not available from source.

Figure 19. Spending on Private Security per Employee by Industry Sector, 2009

65
The ASIS Scope and Emerging Trends survey (ASIS Foundation, 2005) examined the amount
companies have budgeted for security-related services over time. The survey collected data on
the security budgets of responding companies for each of the years 2000 to 2004, allowing for
comparisons among a set of companies over time. Figure 20 shows these security budgets
increased 22% between the 2000–2001 and 2003–2004 budget years. There was a slight decrease
of 4% between the 2001–2002 and 2002–2003 budget years.

Figure 20. Average Security Budget by Budget Year

$1,200,000

$1,000,000
$1,031,309
$966,414 $924,219
$800,000
$844,982
$600,000

$400,000

$200,000

$0
2000-2001 2001-2002 2002-2003 2003-2004

Budget Year

Source: ASIS Foundation Scope and Emerging Trends, 2005.

66
 BRIEF DESCRIPTION OF PROJECT AND SERVICE

This project report provides valuable insights into the establishment of a security agency and
outlines the fundamental steps involved in running a profitable business. The document aims to
furnish relevant information to assist entrepreneurs in making informed decisions by covering
technical, legal, and business aspects. Security agencies offer a range of services, including security
guard services, executive escort services, security/burglar alarms, vehicle tracking, armored car
services, cash-in-transit services, and more. The proposed security agency focuses on providing
general and executive security guard services to the corporate/business sector through the
deployment of armed personnel.

The agency's security management staff, comprising an operations manager and shift supervisors,
will oversee the provision of security services, while the entrepreneur will handle recruitment,
training, business promotion, and management activities. The agency will leverage advanced
communication technology and technology-based security solutions to cater to businesses and
corporate clients. The office location is planned to be in a rented premise near a major business
and/or financial hub in a prominent city.

The agency's primary service offering will encompass general and executive security guard
services, employing up to 100 armed guards. The project is expected to generate direct
employment opportunities for 66 individuals. The financial analysis indicates that the agency will
be profitable from its first year of operations.

To ensure the agency's success, several critical factors should be considered:

- Building contacts and establishing connections in the corporate sector.
- Recruiting trained and experienced resources.
- Providing comprehensive training programs.
- Offering competitive and reasonable compensation.
- Creating a professional working environment.

In terms of operational capacity, assuming a 12-hour shift/duty cycle, the security company is
projected to hire and deploy 100 security guards. However, the initial estimation suggests
operating with 58 security guards, requiring an investment of Rs. 22.00 lacs. Sales are forecasted
to increase by 10% due to an increment in service charges. The agency's license from the state
Home Department will also include 58 weapons licenses.

67
 POTENTIAL TARGET MARKETS/CITIES

The market for security services is experiencing steady growth, with an average annual increase
of 5-6%. This growth primarily stems from corporate clients seeking specialized and high-quality
security services. Urban areas, especially large metropolitan cities, are home to multinational
corporations, local conglomerates, manufacturing companies, business and trade hubs, financial
institutions, and telecom sector companies. These locations represent potential target markets
for the proposed security agency, allowing for a wide range of opportunities. Thus, the agency
can be established in any major city across the country.

SERVICE PROCESS FLOW

The proposed security agency follows a well-defined service process flow, ensuring effective
service delivery. The diagram below illustrates the sequence of steps involved in delivering
security services.

PROJECT COST SUMMARY

To assess the commercial viability of the project, a detailed financial model has been developed. This
model incorporates various cost and revenue assumptions, and the results of the analysis are
summarized in this section. For a comprehensive understanding, the projected Income Statement,
Cash Flow Statement, and Balance Sheet are provided as appendices. These financial statements
offer insights into the expected costs, revenues, and overall financial performance of the proposed
security agency.

Project Economics

The following table suggests interior fee of return and payback period for
theproposed personal safety agency.
Project Economics Description Details
Internal Rate of Return (IRR) 52%
Payback Period (yrs) 2.16 Years
Net Present Value (NPV) 3905633/-

Returns on the task and its profitability are incredibly structured on the first-rate
/experience and coaching of human useful resource and safety guards, linkages
with thecorporate zone and marketing efficiency.

Project Financing

68
Following table gives details of the fairness required and variables associated to
bank loan:

Project Financing

Description Details

Total Equity (10%) Rs. 219,190

Bank Loan (90 %.) Rs.1,972,710
Markup to the Borrower (%age/annum) 08%
Tenure of the Loan (Years) 08
Grace period (year) 01

Project Cost

Following necessities have been recognized for operations of the proposed

business:
Table 3: Capital Investment for the Project

Capital Investment Amount (Rs.)

Office Renovation Cost 100,000
Furniture & fixtures 160,000
Weapons, Communication & Office Equipment 570,000
Advance Rent@18000 PM 216,000
Preliminary Expenses/ Licensing Costs 354,000
Total Capital Costs 1,400,000
Initial Working Capital 800,000
Total Project Cost 2,200,000

Space Requirement

The office area required to operate the proposed protection organisation is

estimated
to be around one thousand sqft. The allocation of house between exclusive
sections of the
office is as follows:

Arms and Communications Equipment

Following arms and equipment will be required for the field operations of the
security agency:

69
List of Weapons and Communication, Office & Other Equipment
Cost Total
Description Quantity Rs/unit (Rs.)
Metal Detector 6 4,250 25,500
Repeater Guns 15 7,500 112,500
Pistol (0.30 Caliber) 14 7,500 105,000
Radio Communication System
(base) 1 40,000 40,000
Hand/Portable Communications
5 15,000 75,000
Units
Computers 2 26,000 52,000
Printers 1 35,000 35,000
Fax machine 1 25,000 25,000
Consumer electronic items (water
cooler, AC, electric kettle etc.) 100,000
Total 570,000

Furniture and Fixtures

A complete of Rs. 160,000/- is required for purchase of workplace furnishings

and fixture for
the proposed Security Agency.
The following table gives an estimated breakup
Table 6: Furniture and Fixtures Costs

Description Quantity Cost /Unit (Rs.) Amount (Rs.)

Chairs 10 2,700 27,000
Sofa Set 02 20,000 40,000
Office Tables 03 8,000 24,000
Office Chairs 05 5,000 25,000
Cupboard / Shelves Lump sum 40,000 40,000
Total 156,000

The office furnishings & equipment prices are estimated to depreciate at the rate of
10% per annum the use of diminishing stability method for the projected period.

70
 Table 9: Human Resource Requirement

Description No. of Salary per Total monthly

Employees month (Rs.) salary (Rs.)
Owner Manager/Director 1 30,000 30,000
Manager Operations 1 20,000 20,000
Shift Supervisor 2 13,000 26,000
Deployment Supervisor 2 13,000 26,000
Accountant 1 18,000 18,000
Special Guards 6 13,000 78,000
General Guards 52 10,000 520,000
Office boy 1 10,000 10,000
Total Staff 66 728,000

Human Resource Requirement The following desk provides the manpower requirement for the
proposed Security Agency:

Owner / Director: Due to sensitivity of the business, Agency Director

hascritical responsibilities. He would be required to without delay engage with management staff and
intently reveal the Agency’s day to day activities.

Manager Operations: Manager Operations is

proposed to be reporting directly to the Owner / Director and would be responsible for
supervising operations in the field/locations. His challenge relies upon on the stage and span of
operations that the organization is carrying out on a particular location. Manager Operations should
ideally be an Ex-Serviceman.

Shift and Deployment Supervisors: All supervisors would be operational in- cost of security locations.
They would report to Manager Operations and assign obligations and monitor performance of the
guards. They will also coordinate with clients’ protection officers.

Guard / Special Guard: Guard would be a “Sipahi” degree character and would report to the
Supervisor. The protect would operate responsibilities assigned to him such as guarding entrance and
exit of the
premises, checking cars motion and carrying out physical and baggage search etc. ‘Special Guards’
would be a commando degree ex-serviceman, who normally would function Executives Escort duty
and would be accountable for their security. Retired SSGC commandos are recommended to be
recruited for this position. The proposed undertaking would want a complete of sixty six personnel to
furnish the safety services. Salaries of all personnel are estimated to make bigger by using 10%
annually

71
Revenue Generation

Revenue projections for the proposed safety company consist of income streams
from the following services:
Table 10: Revenue

Service
First Year Sales
Service Guards Charges
(Rs./guard) evenue (Rs.)
General Security R
Service 52 15,000 9,360,000
Executive Security
Services 06 21,450 1,544,400
Total Sales Revenue 10,904,400
Sales are anticipated to develop via 10% each year. The prices used to calculate
the
gross income earned are based on the billing fee at which the Agency will
charge the customer. The provider fees are estimated at 1.5 x protect salary
and 1.65 x shield revenue for typical and government protection services
respectively.
Guard salaries are additionally estimated to amplify at the rate of 10% per annum.
It is
assumed that any expiring protection contract will either be extended or be
replaced by way of a new one.
Other Costs
• Arms and Equipment Maintenance: All arms and gear require
regular protection which prices around 1% to 5% of the arms/equipment
costs relying upon the usage. The renovation cost for hands and
equipment is assumed at 2% of complete cost, protected in the working cost
estimates.
• Rent and Deposits: The proposed premises will be obtained on a rental
basis with 3 months security credit and 3 months advance rent after which,
rent will be payable on a monthly basis. The monthly rent is estimated at
approximately Rs. 45/ sq. ft. amounting to Rs. 36,000 per month for the
proposed safety agency workplace (800 sq. ft.). Rent is assumed to increase
by 10% per annum.

• Utilities Requirements: The following table offers break-up of utilities on

a monthly basis:
Description Monthly Charges Rs

Electricity 18,000
Water 400
Telephone 6,000
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 Total 24,400

• Working Capital Requirements: It is estimated that an extra quantity of

about Rs. 800,000/- will be required as ‘cash in hand’ to meet the working
capital necessities for the duration of operations. The requirement is based
on the rent, utilities and salaries costs for at least one month. The following
table gives the break-up.
Description Month Monthly
Charges(Rs.)
Utilities 01 24,400
Salaries 01 728,000
Rent 01 36,000
Misc 11,600
Total 800,000
• Guard Uniforms: Uniforms for guards would encompass shirt, trousers,
belt, cap, boots and socks (two uniforms per guard) and would be bought
annually. The cost of uniforms for 63 personnel is estimated at Rs. 151,200
(Rs. 1200/uniform). The value of uniforms is estimated to extend by using
10% per year.
• Preliminary & Licensing Expenses: The provision for preliminary expenses is
assumed to be Rs. 20,000. The fee of license to operate and licenses for
weapons and communications equipment is assumed to be Rs. 343,000. These
pre-operating expenses will be amortized equally over a 5 year
period

• Miscellaneous & Maintenance Expenses: Rs. 25,500 / month (850 per

day) is assumed to be incurred for miscellaneous and hands maintenance
expenses, which are expected to amplify at the charge of 10% per annum for
the projected period.

• Office Expenses: Monthly office costs for the safety enterprise are
estimated to be Rs. 21,000 (700 per day). These prices are estimated to
increase at the rate of 10% per annum for the projected period..
• Taxation: The commercial enterprise is assumed to be run as a Single
Member Company; therefore, tax fees relevant on the earnings of a
non-salariedindividual taxpayer are used for income tax calculation of the
business.
• Cost of Capital: The value of capital is explained in the following table:

Particulars Rate

Required return on equity 20.0 %

73
 Cost of finance 08.0 %

Weighted average cost of capital 9.2%

The weighted common cost of capital is based totally on the debt/equity ratio of 90:10.

ANNEXURE
Income Statement

Projected Income
Statement (Rs.) Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7

Revenue 10,904,400 11,994,840 13,194,324 14,513,756 15,965,132 17,561,645 19,317,810

Bad debts 54,522 59,974 65,972 72,569 79,826 87,808 96,589

Net Sales/Revenue 10,849,878 11,934,866 13,128,352 14,441,188 15,885,306 17,473,837 19,221,221

Cost of services
provided 8,551,200 9,406,320 10,346,952 11,381,647 12,519,812 13,771,793 15,148,972
Gross Profit 2,298,678 2,528,546 2,781,400 3,059,540 3,365,494 3,702,044 4,072,248
General &
Administrative
Expenses
Salaries 336,000 369,600 406,560 447,216 491,938 541,131 595,244
Utilities Expense 292,800 322,080 354,288 389,717 428,688 471,557 518,713
Rent Expense 432,000 475,200 522,720 574,992 632,491 695,740 765,314
Licenses renewal
charges 52,000 57,200 62,920 69,212 76,133 83,747 92,121
Accidental and Life
Insurance Expense 306,000 336,600 370,260 407,286 448,015 492,816 542,098
Office, POL
Expenses 252,000 277,200 304,920 335,412 368,953 405,849 446,433
Amortization 72,600 72,600 72,600 72,600 72,600- -
Depreciation Expense 82,450 74,205 66,785 60,106 54,095 48,686 43,817
Subtotal 1,825,850 1,984,685 2,161,053 2,356,541 2,572,914 2,739,526 3,003,741

Operating Income 472,828 543,861 620,348 703,000 792,581 962,518 1,068,507

Financial Charges
(08% Per Annum) 157,817 149,900 131,718 112,026 90,701 67,605 42,592

Earnings Before
Taxes 315,011 393,961 488,630 590,973 701,880 894,913 1,025,915
Tax - - 8,863 19,097 30,188 56,737 76,387
Net Profit 315,011 393,961 479,767 571,876 671,692 838,176 949,528

74
Statement of Cash Flow

Projected Statement of Cash Flows

(Rs.) Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7

Cash Flow From Operating Activities

Net Profit - 315,011 393,961 479,767 571,876 671,692 838,176 949,528

Add: Depreciation Expense - 82,450 74,205 66,785 60,106 54,095 48,686 43,817
Amortization Expense - 72,600 72,600 72,600 72,600 72,600 - -
(Increase) / Decrease in
Receivables - (227,175) (22,718) (24,989) (27,488) (30,237) (33,261) (36,587)

Net Cash Flow From Operations - 242,886 518,048 594,162 677,094 768,151 853,601 956,758

Cash Flow From Financing

Activities
1,972,71
Receipt of Long Term Debt 0
Repayment of Long Term Debt - (219,065) (237,247) (256,939) (278,264) (301,360) (326,373)
Owner's Equity 219,190

Net Cash Flow From Financing 2,191,90

Activities 0 - (219,065) (237,247) (256,939) (278,264) (301,360) (326,373)

Cash Flow From Investing

Activities
Arms and Communication Eq.
Purchase (568,500)
Renovation (100,000)
Preoperating Costs (343,000)
Furniture (156,000)
Preliminary Expenses (20,000)
Advance Rent (216,000)
(1,403,50
0) - - - - - - -

NET CASH FLOW 788,400 242,886 298,983 356,915 420,155 489,886 552,241 630,385

Cash at the Beginning of the Period - 788,400 1,031,286 1,330,270 1,687,185 2,107,340 2,597,226 3,149,467
Cash at the End of the Period 788,400 1,031,286 1,330,270 1,687,185 2,107,340 2,597,226 3,149,467 3,779,852

75
 Projected Balance Sheet

(Rs.) Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7

Owner's Equity 219,190 534,201 928,162 1,407,929 1,979,805 2,651,497 3,489,673 4,439,201
Long Term Liability 1,972,710 1,972,710 1,753,645 1,516,398 1,259,459 981,195 679,835 353,462

Total Equity & Liabilities 2,191,900 2,506,911 2,681,807 2,924,327 3,239,264 3,632,692 4,169,508 4,792,663

Assets
Current Assets
Cash & Bank Balance 788,400 1,031,286 1,330,270 1,687,185 2,107,340 2,597,22 3,149,46 3,779,852
Account Receivable - 227,175 249,893 274,882 302,370 6 332,607 7 365,868 402,454
Prepaid Rent 216,000 216,000 216,000 216,000 216,000 216,000 216,000 216,000
Pre Operating Costs 363,000 290,400 217,800 145,200 72,600 - - -
Total Current Assets 1,367,400 1,764,861 2,013,962 2,323,266 2,698,310 3,145,833 3,731,335 4,398,307

Fixed Assets
Arms and Communication &
Other
Equipment 568,500 511,650 460,485 414,437 372,993 335,694 302,124 271,912
Furniture & Fixtures 156,000 140,400 126,360 113,724 102,352 92,116 82,905 74,614
Premises Renovation 100,000 90,000 81,000 72,900 65,610 59,049 53,144 47,830
Total Fixed Assets 824,500 742,050 667,845 601,061 540,954 486,859 438,173 394,356

Total Assets 2,191,900 2,506,911 2,681,807 2,924,327 3,239,264 3,632,692 4,169,508 4,792,663

Owner's Equity 219,190 534,201 928,162 1,407,929 1,979,805 2,651,49 3,489,67 4,439,201
7 3
Long Term Liability 1,972,710 1,972,710 1,753,645 1,516,398 1,259,459 981,195 679,835 353,462

Total Equity & Liabilities 2,191,900 2,506,911 2,681,807 2,924,327 3,239,264 3,632,692 4,169,508 4,792,663

Useful Project Management Tips

Technology
• List of Arms & Equipment
Description Quantity
Metal Detector 6
Repeater Gun 15
Pistol (0.30 Caliber) 14
Radio Communication System
1
(base)
Hand/Portable Radio
Communications Units 5

76
• Required Spare Parts & Consumables: Suppliers credit agreements and
availability as per schedule of maintenance be ensured before start of
operations.
• Energy Requirement: The energy requirements should be properly assessed
and alternate source of energy for critical operations must be arranged in
advance.
• Machinery Suppliers: Training and After Sales Services should be sought
from suppliers.
• Quality Assurance Equipment & Standards: Product quality standards must
be defined and a system of check should be instituted. This improves
credibility.
Marketing
• Service & Packaging: Expert help may also be engaged for design &
development of Services.
• Ads & P.O.S. Promotion: Business advertising and dissemination through
banners and launch events is recommended. Product Brochures ought to be
developed from satisfactory provider providers.
• Sales & Distribution Network: Expert recommendation and distribution
agreements are required.
• Price - Bulk Discounts, Cost plus Introductory Discounts: Price should
never be allowed to compromise quality. Price for the duration of introductory
section may be decrease and used as a promotional tool. Service fee estimates
should be carefully documented earlier than price setting.

77
Human Resources
• List of Human Resource
Description No. of
Employees
Owner Manager / Director 1
Manager Operations 1
Shift Supervisor 2
Deployment Supervisor 2
Accountant 1
Special Guards 6
General Guards 52
Office boy 1
Total Staff 66

• Adequacy & Competencies: Recruitment of skilled and experienced staff

should be undertaken.
• Performance Based Remuneration: Attempt to manage human resource cost
should be focused through performance measurement and performance based
compensation.
• Training & Skill Development: Encouraging training and skill of self &
employees through experts and exposure to best practices is a route to
success. Least cost options for Training and Skill Development (T&SD) may be
linked with compensation benefits and awards.

78
KEY ASSUMPTIONS

Particulars Assumption
Sales Increase 10 % per year
Increase in Staff Salaries 10 % per year
Increase in Utilities (Electricity / Water / 10 % per year
Gas)
Increase in Rent 10 % per year
Increase in Incidental Expenses 10 % per year
Increase in Office Expenses 10 % per year
Debt / Equity Ratio 90 : 10
Depreciation
Renovation 10 % per annum (Diminishing
Balance)
Arms and Equipment 10 % per annum (Diminishing
Balance)
Office Furniture
&Fixtures 10 % per annum (Diminishing
Balance)
Bad debts 0.5 % of Sales/Services
Loan Period 8 Years
Loan Grace Period 1 Year
Loan Installments Monthly
Financial Charges (Loan Rate) 12 % per annum
Service Tax Rate 14%

79