In 2018, the demand for private security services was on the rise across Michigan, particularly in urban areas like Detroit. While recent efforts have led to reductions in violent crime, the need for reliable security services remains strong in 2024.-

Read on to learn:

• Michigan’s licensing requirements for security companies
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• Key strategies for building your client base
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• Tips for maintaining compliance and scaling your business

Let’s dive into why starting a security company in Michigan is a smart move.

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Why start a security company in Michigan?

Although violent crime rates have decreased by approximately 30% thanks to the ShotStoppers initiative, certain cities still face ongoing challenges with property crime, such as theft and burglary. 

According to FBI statistics, violent crime fell nearly 1% in 25 of Michigan’s largest municipalities in 2023 but was still 3% higher than in 2019. These ongoing concerns have led to increased reliance on private security services to safeguard property and individuals. 

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A step-by-step guide on how to start a security company in Michigan 

We’ll now share a 7-step guide to help you start your security company in the Great Lakes State: 

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Step 1: Understand Michigan’s licensing requirements

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In Michigan, the Department of Licensing and Regulatory Affairs (LARA) is the governing body that oversees the private security industry. To operate legally, you'll need to obtain a license from LARA.

• Application submission: The first step involves submitting an application to LARA. This application will require detailed information about your business, including ownership structure, proposed services, and planned operating locations.
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• Background checks: LARA conducts thorough background checks on all applicants to ensure they meet the state’s character and fitness standards. This includes a criminal history check and verification of any prior experience in the security industry.
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• Documentation: In addition to the application, you’ll need to provide various supporting documents, such as proof of insurance or a surety bond, business registration documents, and any relevant training certifications.
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• Fees: Be prepared to pay the required licensing fees, which may vary depending on the type and scope of your security services. It’s essential to factor these costs into your business plan.
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State-specific requirements

Michigan has specific requirements that security companies must adhere to:

• Age and education: The applicant must be no less than 21 years old and have a high school diploma or its equivalent.
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• Experience: The state mandates a minimum of two to four years of qualifying experience, which can include prior experience in the security industry, law enforcement, or military police.
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• Clean record: Applicants must have a clean criminal record, with no felony convictions or certain misdemeanor convictions within the past five years.
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• Insurance or bond: You'll need to secure either an insurance policy or a surety bond that meets the state's minimum coverage requirements.
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Step 2: Create a solid business plan
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The first thing you need to do is identify your target market. Will you specialize in residential security or perhaps focus on commercial security? Alternatively, you might find your niche in event security, ensuring the safety of large gatherings and events.

Next, you need to define your unique selling proposition. What sets your security company apart from the competition? Do you offer specialized training for your guards? Do you use cutting-edge tech? 

Pro tip: Clearly articulate your unique value proposition to attract clients and establish a strong brand identity.
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Consider your financial projections

You should also keep in mind the following variables related to cost: 

• Startup costs: Estimate the initial investment required to launch your security company. This includes expenses such as licensing fees, insurance, equipment, and marketing.
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• Operational costs: Project your ongoing expenses, including salaries, rent, utilities, and vehicle maintenance.
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• Pricing strategies: Determine your pricing structure based on your target market, competition, and desired profit margins. Consider offering different pricing packages to cater to various client needs.
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• Client acquisition: Develop a plan to attract and retain clients. This might include networking, online marketing, and targeted advertising campaigns.

For a more detailed view of the costs of getting a security company off the ground, consult our article on the topic.
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Use advanced software to help automate tasks

Consider how Belfry's management platform can help Michigan security businesses: 

• Scheduling made easy: Belfry simplifies the complex task of scheduling security personnel, ensuring optimal coverage for your clients while minimizing overtime costs.
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• License tracking: Stay on top of license renewals and expirations for your employees, ensuring compliance and avoiding penalties.
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• Communication hub: Streamline communication between management, guards, and clients, fostering transparency and responsiveness.
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Step 3: Register your security company
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Registering your business formalizes your operations and grants you the legal standing to operate within Michigan. Here’s a quick peek at what the registration process looks like:

• Entity selection: The first step involves choosing the right legal structure for your business. Common options include a Limited Liability Company (LLC), a corporation, or a sole proprietorship. 
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• Name reservation and registration: Once you've chosen a business structure, you'll need to select a unique and memorable name for your security company. Conduct a thorough search to ensure the name is available and not trademarked by another entity.
  
  After you've settled on a name, reserve it with the state and then proceed to register your business with the Michigan Department of Licensing and Regulatory Affairs (LARA).

• Licensing: As discussed earlier, getting the necessary licenses from LARA is a crucial step. Make sure you have all the required documentation and certifications to avoid delays in the registration process.
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Getting your documents in order

Next in line is the process of gathering the necessary documentation:

• Articles of organization/ incorporation: Depending on your business structure, you'll need to file either Articles of Organization (for an LLC) or Articles of Incorporation (for a corporation) with the state. These outline the structure and governance of your business.
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• Employer Identification Number (EIN): Get an EIN from the IRS. This unique identifier is necessary for tax purposes and opening a business bank account.
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Tips for ensuring compliance every step of the way

If you’re wondering how to start a security guard company in Michigan, navigating compliance should be one of your top priorities. Here are some handy best practices when it comes to remaining compliant:

• Local regulations: In addition to state requirements, check with your local municipality for any additional permits or zoning regulations that may apply to your security business.
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• Federal regulations: Be aware of any federal regulations that may impact your operations, especially if you plan to offer armed security services or handle sensitive information.
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Step 4: Secure the necessary insurance and bonds
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Having the right insurance coverage acts as a safety net, protecting your business from financial losses in the face of unforeseen events. 

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Insurance

General liability insurance is essential, safeguarding your business from claims of bodily injury, property damage, or personal and advertising injury caused by your operations or employees. It covers legal costs and potential settlements.

You are legally required to carry workers' compensation insurance in Michigan If you have employees. This insurance provides benefits to employees who suffer work-related injuries or illnesses, covering medical expenses, lost wages, and rehabilitation costs.  

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Bonds

Michigan typically requires a surety bond for security companies, with amounts starting at $25,000, but it may vary depending on the services provided and local regulations. This bond covers potential damages caused by your company or its employees, providing peace of mind to your clients. 

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Step 5: Hire and train security personnel
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Before you start the hiring process, familiarize yourself with Michigan's labor laws and employee regulations. You also need to make sure you're paying your employees at least the state-mandated minimum wage.

You'll need to be well-versed in Michigan’s overtime regulations, including who is eligible and how much to pay for hours worked beyond the standard workweek. Providing breaks and meal periods to your guards is also a legal requirement, ensuring they have rest time during shifts.

Tip: We’ve got a helpful guide on salary ranges by state so you can be competitive in terms of wages. 

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Recruitment and training explained

Use various channels to attract qualified candidates, such as online job boards, social media, and industry-specific recruiting platforms. Craft clear and compelling job descriptions that highlight the responsibilities and qualifications required for each position.

In Michigan, LARA must license security companies, and any guards providing specialized services, such as armed security, may need additional certifications or licenses. Assist your new hires in navigating the licensing process, ensuring they meet all the requirements and obtain their licenses promptly.

You should also provide training to your security personnel, covering topics such as conflict resolution, emergency response, report writing, and customer service. Ongoing training and professional development opportunities will help your team stay sharp and motivated.

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How Belfry can help

With Belfry, you can easily create and manage employee schedules, ensuring optimal coverage for your clients and minimizing scheduling conflicts. The platform also helps keep track of employee certifications and license expirations, avoiding lapses in qualifications. 

Additionally, Belfry streamlines communication between management and guards, facilitating real-time updates, incident reporting, and feedback. Our all-in-one platform is a key ally if you’re wondering how to start a security guard company in Michigan. 
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Step 6: Build your client base
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In a competitive market like Michigan, it's essential to implement effective marketing strategies and build a strong reputation to attract and retain clients. Here are some ideas:

• Networking: Forge relationships with potential clients, industry partners, and community leaders. Attend industry events, join local business organizations, and actively participate in community initiatives to expand your network and generate leads.
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• Online marketing: Establish a strong online presence through a professional website and active social media engagement. Use search engine optimization (SEO) techniques to improve your website's visibility and attract organic traffic. 
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• Community engagement: Participate in local events, sponsor community initiatives, and offer free security assessments to demonstrate your expertise and build trust within the community.

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Specialization is always an option

Consider specializing in niche markets to set your company apart from competitors and attract a specific type of client you're aiming for. You could, for instance, specialize in: 

• Event security: Provide security services for concerts, festivals, conferences, and other large gatherings. This requires specialized training and expertise in crowd management and emergency response.
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• Personal protection: Offer executive protection services to high-profile individuals or those facing potential threats. This niche demands highly trained and discreet personnel.
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• Corporate clients: Cater to the security needs of businesses, including office buildings, retail stores, and industrial facilities. 

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Learn from the best

Research successful security companies in Michigan and analyze their strategies to gain valuable insights. You could, for example:

• Examine how a company like Securitas leverages its global presence and extensive resources to offer a wide range of security solutions to clients across various industries. 
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• Consider how a smaller, local company like Griffin Security Services focuses on building strong relationships within the community and providing personalized service to its clients. 
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• Look at how Allied Universal uses technology and innovation to stay ahead of the curve and offer cutting-edge security solutions.

By studying the successes and challenges of other companies, you can glean valuable lessons and adapt their strategies to fit your business model.
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Step 7: Stay compliant and grow your business
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As your security company establishes itself and begins to flourish, it's imperative to maintain a proactive approach to compliance and growth. Staying ahead of the curve is crucial for long-term success. Here are a few tips on license renewals and regulatory updates:

• License renewals: Mark your calendar with license renewal deadlines and ensure all necessary paperwork and fees are submitted on time. Avoid any lapses in licensure, as this can disrupt your operations and damage your reputation.
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• Regulatory updates: Stay informed about any changes or updates to Michigan's security regulations. Subscribe to industry newsletters, attend workshops, and maintain open communication with LARA to confirm your business practices remain compliant.
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• Employee certifications: Keep track of your employees' certifications and training requirements. Encourage ongoing professional development to enhance their skills and knowledge.

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Tips for scaling your business

Though your concern now is how to start a security company in Michigan, you’ll eventually want to consider strategies for expansion and growth:

• Geographic expansion: Explore opportunities to expand your services to other cities or regions within Michigan. Conduct market research to identify areas with high demand for security services.
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• Service diversification: Consider adding new services to your portfolio, such as security consulting, risk assessments, or security training programs. This can attract new clients and increase revenue streams.
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• Strategic partnerships: Collaborate with other businesses in complementary industries, such as property management companies or event organizers, to expand your reach and tap into new markets.
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Use Belfry to run smoother and more efficient operations 

Now you know how to start a security company in Michigan. As your business scales, consider using the right tech to facilitate your management processes and run more efficient operations. 

Belfry is an all-in-one security management platform that simplifies day-to-day operations and supports business growth. 

Here’s how Belfry's software can help you deliver top-notch security services

• Compliance tracking: Set automated reminders for license renewals, employee certifications, and other compliance deadlines. This helps you avoid penalties and maintain a clean record.
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• Real-time reporting: Empower officers with an easy-to-use mobile app for electronic reporting, optimized patrols, and detailed client updates for enhanced transparency and accountability.
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• Scheduling and dispatch: Optimize scheduling and dispatch processes to improve efficiency and reduce costs, thanks to our mobile app. Make your clients receive timely and reliable service.

Schedule a Free Belfry Demo