One of the fastest ways to lose money as a security guard company, without even realizing it, is by pricing your services wrong.

It’s easy to get caught up in what competitors are charging or what a client wants to pay. But if your hourly rate doesn’t cover your true costs and leave room for profit, you’re just working harder for less.

In this post, we’ll cover the most common pricing mistakes that eat away at your margins, and how to fix them.

Mistake #1: Pricing Without Knowing Your Real Costs

A surprising number of companies set pricing without calculating their fully loaded hourly cost.

They consider wages, maybe payroll taxes, and then tack on a margin. But they forget things like:

• Insurance
• Recruiting and onboarding costs
• Administrative overhead
• Training hours
• Non-billable time (like breaks or meetings)

Why it matters:
If your cost per hour is actually $27 and you’re billing $30, you’re not running a healthy business. You’re one no-show or overtime shift away from a loss.

Mistake #2: Skipping Overhead

It’s easy to overlook indirect costs like office rent, admin staff, software, and compliance tools. But these are essential to running your operation, and they don’t disappear just because they aren’t on a job site.

What gets missed:

• Dispatchers and schedulers
• Billing and payroll systems
• Management salaries
• Business insurance
• Client service time

Tip: Build overhead into your hourly rate, not just into your end-of-month calculations. You’ll thank yourself later.

Mistake #3: Flat Markup Pricing

A lot of companies still use the “wage + X%” approach to build their rates. While it’s simple, it’s also flawed.

Why? Because your expenses don’t scale at the same rate as wages.

For example, if you pay an officer $18/hour and apply a 30% markup, you’re charging $23.40. But if your true cost of doing business is $26/hour, that “simple” formula just put you in the red.

Better approach: Use a cost-based pricing model that accounts for fixed and variable expenses, then add a targeted profit margin.

Mistake #4: Ignoring Market Data

It’s one thing to know your internal costs. It’s another to know what the market will actually bear, and how you compare.

What you should be watching:

• Regional competitors’ rates
• Industry benchmarks
• Contract size and duration norms
• Union vs. non-union markets
• Niche or vertical-specific pricing (e.g., retail, healthcare, construction)

Warning sign: If you’re constantly winning bids on price alone, you might be underpriced. Clients care about value, not just being the cheapest option.

Mistake #5: Not Updating Rates Regularly

Inflation, wage hikes, and insurance costs change constantly, but many companies go years without revisiting their rates.

Why this hurts:
Even a $1/hour increase in guard pay can erode thousands in annual margin if your pricing doesn’t move with it.

Fix: Review your rates at least once per year, or any time your costs go up significantly.

How to Fix It

Getting pricing right doesn’t need to be complicated. You just need the right process, and the right tools.

Here’s what helps:

• Build out a cost-based pricing template
  Include wages, taxes, equipment, training, admin, insurance, and margin.
• Use a pricing calculator
  Software like OfficerBilling makes this easy, helping you create client-ready, profit-smart rates in minutes.
• Review and adjust regularly
  Set a quarterly or annual review process to keep your pricing aligned with real costs and market trends.

❓ FAQs About Security Guard Pricing

How often should I update my pricing?

At minimum, review your rates annually. But you should also review whenever wages, insurance, or operating costs change significantly.

Should I show clients a breakdown of my pricing?

You don’t have to show every detail, but transparency builds trust. Consider sharing high-level breakdowns or value comparisons to justify your rate.

Is it okay to charge different rates for different clients?

Yes. Every site has different requirements, risk levels, and expectations. Your pricing should reflect that. Just be consistent in how you calculate and justify those rates.

How can I make pricing easier as a security guard company?

Use a tool like OfficerBilling to streamline rate-building, generate proposals, and track profitability across contracts. It saves time, and helps protect your margins.