Business Plan: Security Solutions Company.
- Overview
Business idea
Security Solutions Company will be a new business venture based in New York and operating in the private security industry. The model will be a unique brand that serves a niche market with a focus on information technology based and supported services. The model was settled for as a result of the increasing need for technology based security solutions considering the increased use of information technology systems by institutions and individuals that pose significant security threats. In addition, technology advance has provided security solutions that can be tapped with the business model to offer advanced security solutions which are differentiated from the traditional methods. In that respect, the business will be seeking to enhance the traditional security services by utilizing technology systems in service delivery. (Research, 2013a)
Business type
Security Solutions business model will be established and introduced to the market in form of a private security firm that provides security services and solutions to individuals and institutions.
Core competencies define the capabilities, skills, behaviors and strategic assets that have the capacity to develop a competitive edge for an organization. In that respect, Security Solutions’ core competencies relates to its leadership, manpower & skills, technological applications as well as market reach as follows.
Leadership: The organization will have an advantage of having experienced individuals in its management and leadership positions. Management team will comprise of individuals who have worked at senior level in leading organizations within the security industry hence bringing a wealth of experience that will enhance strategic decision making.
Manpower and skills: The organization has high qualifications’ requirement for its employees that is meant to enhance service delivery in an industry whose organizations are known to have low entry education qualifications hence poor service delivery. (First Research, 2013b) In addition, the organization has a comprehensive training program for its administrative staff and guards that is meant to provide suitable skills ranging from operational, customer care and relationship management. This will place the organization in a relatively competitive position in an industry that is synonymous with poor or lack of training. (Keller, 2012)
Technological applications: In a market that is marked by poor equipping of security service providers, the organization seeks to enhance service delivery through application of advanced security service technology. This will be achieved by the organization integrating a number of services that seek to achieve synergy including information technology security services as well as technology integration and management services that will play a great role in enhancing performance in areas of investigation, guard services, armored transport and other services. (Research, 2013b)
Differentiation: One of the key to marketing and brand success is differentiation of services that will be applied to tailor the organization’s services to customers’ needs. In that respect, Security Solutions Company seeks to ensure that services offered will have added benefits compared to the competitors. Some of the differentiating factors will include enhanced communication with clients and accelerated service delivery with technology application. (Research, 2013a)
- Management
Business legal structure
Security Solutions Company business will operate as a limited liability company that will have several subdivisions offering various services under its different departments and locations. In that, respect, the business will have the benefits of a limited liability company including a limiting owners’ liability to their capital contribution, separation of the owners form the business hence the business being a continuous entity that seeks to establish its sustainability in the market. In addition, the structure empowers the business to transact and contract on its own independent of the owners. (Keller, 2012)
Owners and key members of management teams
Security solutions Company will be a privately owned limited liability company owned by a group of likeminded investors seeking to benefit from the existing opportunities in the private security industry. The ownership will be limited to 5 investors who can raise the needed capital to finance the business venture. The owners will have voting rights to appoint the management team that will comprise of the Managing director and the board of directors. (Keller, 2012) In that respect, the members of the management team will include;
- Managing Director
- Director Finance
- Director Marketing
- Director Operations
- Director Marketing
Staffing structure and key positions
Security Solutions Company will have a horizontal organization structure that is adapted for its several benefits compared to the alternative vertical structure. Some of the benefits expected from the structure are the ease of communication as well as sharing of skills and responsibilities between various departments. The structure will also enhance strategic decision making by ensuring adequate consultation between various functions within the organization. (Keller, 2012)
In that respect, the organization will have a managing Director whose responsibilities will include Planning, Organizing, Directing and controlling. Under the directors will be departmental heads holding leadership positions in specific areas including; Finance, Human Resource Management, Operations and Marketing. Each of the directors will be responsible for their departmental functions and have a horizontal relationship with each other with all being answerable to the Managing Director. (Keller, 2012)
- Marketing
Environment analysis: Opportunities and threats
According to a market research by Fredonia research group based in Clever Land, the demand for private security services in US is expected to increase by 7% from the current $58.88 billion to a value of $63 billion in the year 2016. Currently guard services takes 11% while armored services takes 35%. Further, the research noted that guard service is expected to represent half of the industry demand by the year 2016. (Griffin, 2013)
Among the factors driving the growth in demand for security services hence providing opportunities for new business ventures in the industry include the increase in perceived and real terrorism threats, increased urbanization and the growth of middle class which has the purchasing power to afford security services. (La Vigne, Hetrick, & Palmer, 2008)
Currently, the major customers for private securities are industrial and commercial institutions. However, there is a growth in residential security demand that is bolstered on residential construction that is meant to spur demand for services like alarm monitoring. In addition, with increasingly better licensing laws and training requirements in the industry, guard service is gaining trust in the market spurring its demand growth. In that respect, there are opportunities to tap the rising market demand of guard service, commercial and industrial information security needs as well as deliver services that will address the rising terrorism threats through alarm monitoring, cyber security, detective and investigative services.(Griffin, 2013)
However, the business is also likely to face challenges from the prevalent threats including the high competition presented by the few large firms that dominate the market with G4S and Securitas being the largest private security firms that have significant market share. In addition, the high pace of technological advance poses a threat in terms of the high rate at which information technology systems become obsolete hence a need to often upgrade systems in order to keep up with the market trend. This poses a cost burden to the firm whose key focus will be on technology based security solutions. (Hooley, Nicouland & Piercy, 2011)
Target market and positioning strategy
Private security in the modern day is not only meant for institutional and infrastructure protection but also intellectual properties’ protection. In addition, the industry players plays a critical role in protection in institutions protecting property and employees as well as conducting investigations and carrying out pre-employment screening in addition to providing security to information technology given its increased application. (Gill, & Hart, 2009)
The business will seek to serve a niche market by focusing on high net worth individuals and institutions that demand information technology based solutions in addition to armored and guard services. In that respect, the firm’s target market has some traits that suit it to the model’s offer. Such traits include significant income to afford the services as well as having the necessary infrastructure to accommodate and enable integration of highly technological based services. (Kotler & Armstrong, 2012)The firm’s services can be classified into three categories including:
- Support services that will include logistical services like cash transit services, armored transport, alarm monitoring, private investigations, security systems integration and management as well as information technology security.
- Advisory services which will entail security consulting, risk evaluation, operational as well as strategic analysis relating to security. (Griffin, 2013)
In light of the traits and the model’s target, the list of target customers for Security Solutions Company is as follows.
- Education institutions including colleges and universities
- Finance banking and insurance institutions
- Hospitality, Arena, Casinos and entertainment businesses
- Energy, water, power and utilities facilities
- Industrial and manufacturing plants
- Retail, hotels and food service businesses
- Ports and terminals
- Diversified companies
- Communications, information technology and media
- Medical centers and hospitals
- Warehousing, transportation, logistics and supply chain.
- High net worth individuals. (Law, 2009)
Communication and promotional strategies design
Communication and promotional strategies will be designed to suit the target market in terms of the form and time of information delivery. In that respect, the key target customers being institutions will require public relations promotion in which marketing individuals focusing of specific potential customers with relevant and suitable services information. In addition, the business will employ advertising campaigns with messages aimed at informing and persuading potential clients to contract the business services. The information provided through all communication an advertising means will seek to create a favorable brand image that clients can identify with and establish in order to earn customer loyalty. The information will focus on portraying then brand as one that delivers differentiated services. (Kotler & Armstrong, 2012)
- Finances
Financial requirement for purchases
As a new business start up, Security Solutions Company will require to raise capital in order to make suitable purchases and start its operations. In that respect, the key items that define the firm’s capital requirement for the year 2014 are shown on the table below:
Source of financing
With a need to raise $59,830,000 for the business start up, the source of finance is a crucial aspect that requires consideration of several factors. Among the factors taken in consideration in determining the suitable source for Security Solutions Company are cost and accessibility. In that respect, credit financing through a loan from a bank will be the suitable source considering the significant amount that needs to be raised and the fact that the company is a private company whose capital sourcing is not open to public funding, In addition, the low interest rate in the US market at an average rate of 3% per year provides an opportunity to access capital at low cost. Further, the method is also suitable considering the difficulty of raising the huge sum from the business owner’s savings. (Kelly, 2012)
One year Budget projections
Using the ATAR model, Security Solutions Company’s projected market share and sales for the year 2014 are as calculated based on the assumptions below.
- There will be an awareness rate of 65% considering the planned extensive promotion.
- Services trial rate will be 55% with the suitability of the brand’s positioning.
- Both availability and accessibility of the company services will be 50% given the strategic location that the business will have in the market.
- It is also assumed that repeat purchases will be 50% considering the differentiated and added value services that the brand intends to deliver to its target segment. (Hooley, Nicouland & Piercy, 2011)
In that respect, the market share and sales are estimated as follows
In that respect and considering the US private security market to have a demand value of $58.88 billion, the company’s sales for 2014 will equal 9 % of $58.88 billion hence being 0.09 * $58.88 billion = $5.3 billion (Kotler & Armstrong, 2011)
Projected Income statement
Given the calculated sales and total expenses as shown on the excel calculations and consolidated on the statements below, the projected income statement for the business is as shown below.
In view of the projected budget, the business start up will require raising $59,830,000 from a bank at an interest rate of 3% per year over a period of 5 years. The raised capital will be applied to purchase necessary equipments and facilities as well as pay for the business operations in the year 2014. Further, the business is expected to gain a 9% market share in the first year 2014 with estimated sales of $5.3 billion and a retained profit of $1,929,494,149.
References
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First Research. (2013b). Security Guard Services: Industry profile. SIC Code: 7381. NAICS
Code 561612.
Gill, M., & Hart, J. (2009). Enforcing corporate security policy using private investigators.
European Journal on Criminal Policy and Research, 7, 245 - 261.
Griffin, J. (2013). Private contract security services to see steady global demand. Security
Watch. Retrieved from http://www.securityinfowatch.com/article/10862533/freedonia-group-report-forecasts-global-demand-for-contract-security-services-to-reach-244b-in-2016
Hooley, G. Nicouland, B. & Piercy, F. N. (2011). (5th Ed.). Marketing Strategy and
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Kotler, P. & Armstrong, G. (2012). (11th Ed.). Marketing: An Introduction, Global Edition.
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La Vigne, N. G., Hetrick, S. S., & Palmer, T. (2008). Planning for change: Security
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Washington: The Urban Institute.
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