Selling a Physical Security Services Business

Most physical security services businesses sell on a multiple of cash flow. Owner-operator shops are often priced off SDE, while larger teams are priced off EBITDA. Integrators with strong job costing and real recurring revenue from monitoring or service agreements usually trade higher than project-only installers. Guard-heavy companies can trade well, but the multiple depends heavily on contract terms, client retention risk, and payroll compliance. Hardware-heavy revenue often gets discounted if markup is thin or volatile. Use Rejigg’s free valuation calculator to estimate a range based on your numbers and recent transaction multiples.

Yes. Many Physical Security Services deals can be financed with an SBA 7(a) loan, but lenders dig into cash flow quality and operational risk. For guarding, they focus on timekeeping controls, wage compliance, claims history, and how easily contracts can terminate or be reassigned. For integrators, they look for job-level margin proof, WIP and backlog conversion, and whether the business depends on one estimator or one license holder. Rejigg’s SBA loan calculator helps you model payments and sanity-check what the cash flow can support.

Many sales close in 3–9 months once you are truly ready to go to market. Physical Security Services deals can take longer when licensing transfers, guard card renewals, site access approvals, or customer consents sit on the critical path. Integration deals also slow down when buyers need to verify WIP, backlog, and exposure to long hardware lead times. The fastest path is a diligence-ready package: financials, contract register, license matrix, and proof of dispatch and timekeeping. Rejigg’s preparation guide lays out what to assemble first.

No. A broker can help, but many owners sell without one, especially when the business has clean records and a clear story. Brokers often charge 5–10% and mainly manage buyer access, NDAs, and diligence coordination. Rejigg gives you direct access to pre-vetted buyers, digital NDAs before anyone sees sensitive details, a built-in data room, and an offer dashboard to compare terms. You control pricing and process without paying a commission. Start by listing on Rejigg and follow the Owner’s Guide to stay organized.

Buyers value profit, not the amount of equipment you push through the top line. If a big slice of revenue is hardware with low markup, returns risk, and backorders, it can inflate revenue while adding little value. Most buyers will ask you to split labor and hardware gross profit, explain rebates and project registration economics, and show how you handle returns and warranty replacements. A clean breakdown usually improves price because it removes doubt about what the margin really is. Rejigg’s data room structure helps you share the breakdown and supporting vendor docs under an NDA.

Working capital is the short-term money the business needs to operate: current assets like AR and sometimes inventory or WIP, minus current liabilities like AP and accrued expenses. In integration, long lead times can tie up cash in equipment and partially completed jobs. In guarding, payroll often hits before client payments clear, so timing matters. Buyers usually set a working-capital target so they are not funding past-due bills or an AR hole at close. Rejigg’s negotiation guide explains how targets are set and negotiated.

Earnouts pay part of the price later if the business hits post-close targets. In Physical Security Services, they show up when revenue depends on a few big accounts, contract re-competes, or the owner’s estimating and sales work. Guarding earnouts often track retained billable hours or gross profit by contract. Integration earnouts may track booked margin, project completion, or service agreement retention. The main risk is control, since the buyer runs staffing, pricing, and spending after close. Rejigg’s deal tools help you compare offers with and without earnouts so you can judge risk, not just headline price.

Buyers typically ask for 3 years of financials plus trailing 12 months, tax returns, AR and AP aging, customer and contract lists, insurance and claims history, and a license and registration package for both the company and individuals. Guard businesses usually need timekeeping and payroll controls, post orders, and sample incident reports. Integrators usually need WIP and backlog support, job files, change orders, and vendor authorization details. A secure data room keeps the process moving and limits oversharing. Rejigg includes a built-in data room and a due diligence checklist aligned with real buyer requests.

Most buyers ask for a non-compete and a non-solicit to protect the contracts and the workforce they just bought. In Physical Security Services, this matters because customers can rebid quickly, and guards and techs can move as a group if they are recruited. Terms vary by state, and enforceability often depends on scope, duration, and whether the restriction is reasonable for the role and geography. It is worth having your attorney review state-specific limits early, since these terms can affect your post-sale plans. Rejigg’s deal negotiation guide helps you benchmark what is common.

Guarding businesses often trade on contract quality and operational controls, so buyers spend a lot of time on timekeeping, claims, and termination rights. Many buyers prefer an asset purchase to limit liability exposure, although structure depends on tax and legal context. Integrators tend to be diligenced around WIP, backlog, vendor authorizations, and the technical bench, and working-capital adjustments can matter when inventory and open jobs are large. In both models, a transition period is common to stabilize customer contacts and key staff. Rejigg’s offer dashboard makes it easier to compare structure and risk, not just price.

Buyers look at concentration through the lens of how fast the revenue could disappear. In guarding, a single campus or property manager can represent a lot of billable hours, and an easy termination clause can raise risk. In integration, concentration can come from a facilities relationship or a platform standard that drives repeat work. Concentration can be acceptable when contracts are sticky and performance history is strong, but buyers will ask for terms, reporting cadence, decision-maker stability, and retention evidence. Rejigg’s buyer vetting and NDAs help you share sensitive customer details more safely.

Buyers will usually split inventory into usable stock and dead shelf. Common problem areas include obsolete camera models, discontinued access control boards, equipment bought for delayed projects, and non-returnable special orders. A strong seller package includes an inventory list with cost, age, and what is reserved for specific open jobs. Deal treatment varies. Some buyers pay for usable inventory on top of enterprise value, while others fold certain inventory into the working-capital target. Keeping this organized reduces last-minute renegotiations when someone finally opens the shelf and counts what is there.

The biggest price hits usually come from continuity and liability risk. Examples include licenses or qualifying roles tied to one person with no backup, key contracts that cannot be assigned or can terminate on short notice, weak timekeeping controls in guard operations, and thin install margins caused by repeated fixed-bid overruns. Buyers also discount businesses with heavy callback volume, unclear claims history, or site requirements that live only in someone’s head. Most buyers can work with issues when they are documented and contained. Rejigg’s Owner’s Guide helps you surface and fix the common problems before diligence.

Most buyers want the same guards and techs showing up, the same supervisors handling issues, and the same dispatch rhythm. That usually means a communication plan, confirmation of pay rates and schedules, and a clean handoff of credentials like guard cards, badges, and site access. Retention bonuses are common for key supervisors, dispatchers, and senior techs, since losing them can destabilize coverage. This varies by market and by union or site requirements. Rejigg’s transition planning guide covers what to communicate and when.

Buyers typically request insurance loss runs, a summary of major incidents, and your investigation and client notification process. They often review use-of-force complaints, vehicle accidents for patrol work, and termination reasons on major accounts. They want to see consistent documentation: incident report templates, escalation rules, corrective actions, and training boundaries. Incidents happen in guarding, so the question is whether your system catches and contains them. Keep claims documents and incident SOPs in a secure data room, and share them only after an NDA and serious buyer qualification.

Confidentiality matters in Physical Security Services because clients may rebid, and guards or techs may leave if they expect schedule changes. Most sellers use staged disclosure: high-level information first, then customer names and contracts only after an NDA and clear buyer intent. Internally, limit knowledge to the smallest group until you have a path to close and a plan for supervisor and client communications. Rejigg supports this with pre-vetted buyers, digital NDAs before access, and permission controls in the data room so each buyer sees only what you approve.

Taxes vary based on entity type and deal structure, including an asset sale versus a stock sale, and whether you are a C-corp, an S-corp, or an LLC. The allocation between equipment, inventory, and goodwill can change your tax outcome, and depreciation recapture on vehicles, tools, and equipment can be material for integrators. Guard businesses often have less equipment and more value in contracts and goodwill, which shifts the allocation discussion. Your CPA should model scenarios early, since the highest purchase price can still produce lower after-tax proceeds. Rejigg’s negotiation guide helps you spot term changes that affect net proceeds.

A 30–90-day active transition is common, and it can run longer when the owner is the primary estimator, the main escalation point, or the license holder that keeps work legal. Guarding buyers may want continuity through a billing cycle or two to steady client contacts and supervisor routines. Integrator buyers may want help with key projects, vendor portals, and technical handoffs. Define the transition in writing, including hours per week, responsibilities, and decision rights, so it does not become open-ended support. Rejigg’s transitioning guide provides a practical framework.