One of the main questions that I get from security guard company owners, on the regular, is how can they go about finding new customers and growing their companies. Generally speaking, my answer to that is you have to do everything from social selling to physically knocking on doors…but I always forget to include subcontracting security contracts in that list.
Every month I talk to dozens of security companies about my experiences growing my security company, and the tools and tactics that I used and continue to use to this day. A lot of time those conversations revolve around traditional sales and marketing techniques. But there is one way to grow your company that I’ve never discussed and that’s through subcontracting security contracts.
What is Subcontracting?
Subcontracting is defined as employing a business or person outside one’s company to do (work) as part of a larger project.
Hiring subcontractors offers a number of advantages for businesses. For example, subcontracting mundane but necessary tasks can free up time and resources to enable the business owner to concentrate on making money and growing the business. Oftentimes, a subcontractor will cost less than hiring a full-time employee.
In my security guard company’s first few years, I aggressively pursued subcontracting opportunities with the multi-nationals as well as other large regional companies. I thought that subcontracting provided a way for my company to work for clients that I would not have been able to win on my own due to lack of experience or some other disqualifying factor. That work paid off in abundance as we were able to provide security guard services at some premier accounts.
How do you go about subcontracting security contracts?
Generally speaking, the easiest way to find subcontracting opportunities for your security guard company is to get certified by a government agency that requires its larger vendors to work with smaller agencies on security guard contracts.
For instance, if you are a veteran-owned business there was a time, and I’m not sure if it’s the same today when the federal government had a requirement that many contracts that were won by larger firms (also known as prime contractors) had to subcontract parts of that contract to veteran-owned business.
Similarly, on the state and local level, many prime contractors are required to subcontract part of the security guard contracts to women-owned and minority-owned businesses.
Another way to be successful at subcontracting is finding larger companies that have requirements that they can’t meet with internal staffing. For instance, there are security companies that do business with large customers in which that security company can’t cover the necessary geographic locations…in those cases, they may subcontract. Another example might be security companies that have to provide armed security officers. If the security company doesn’t have enough armed officers to fill the contract requirements or they prefer not to provide armed services they may subcontract that portion of the contract.
Subcontracting Security Contracts Can Be Hazardous To Your Health
Although subcontracting is a great way to grow your business, it’s not all sunshine, lollipops, and rainbows. The most important consideration in signing a subcontracting agreement is the relationship and understanding that you have with the prime contractor. If you find yourself partnered with the wrong prime contractor, they can make your life miserable. Late payments, coopting your employees, or just being general pains in the bottom. I have been fortunate in that I have had great outcomes with the companies that I have subcontracted with but your mileage may vary. So like everything else, be careful of what company you work with and be careful of the contract that you sign. I’ve heard of smaller businesses being driven out of business because a prime contractor would stretch payments out 3, 4, or even 5 months.
If you have experience as a prime or a sub on a security guard contract I’d love to hear what your experience was like, so please leave your comments below.
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By Courtney Sparkman
OfficerReports.com is a software company that provides security guard companies with an easy way to monitor their officers, better manage their operations, and win new business. Take a tour of our software to see how we combine Electronic Reporting, Real-Time GPS based Tour Tracking, and GPS based Clock In and Out into one easy-to-use platform.
