Over the last couple of months, we talked about securing a customer’s business through people and technology. You can read the articles here.
This month, we turn our attention to securing a guard company’s most important asset – its business.
The security guard industry includes thousands of small and mid-sized firms. Many grow to a plateau and stay there. The owners/operators are usually too busy to plan adequately for growth, or they lack expertise in a key area. Still others decide the time is ripe for a sale.
Whether you’re looking to sell a guard company or acquire one, or simply wish to improve your bottom line, there are outside consultancy firms that can help the process run smoothly.
Security ProAdvisors is one such firm. Located in New Jersey, Security ProAdvisors has an extensive network of former chief financial officers, controllers, and operating executives, all of whom have worked in the security guard industry. We recently caught up with its founder and president Keith Oringer, to learn more:
Q. You held numerous positions with U.S. Security Associates before starting this business, including the president of a business unit. How many guards were under your control?
A. Approximately 3,000
Q. What were some of the biggest problems you faced there and how did you solve them?
A. The biggest problems were personnel issues which we solved by dealing with each issue and problem in a straight-forward manner to reach a satisfactory solution.
Q. You were with U.S. Security Associates for 20 years. What’s behind the decision to strike out on your own?
A. I was president of a major business unit with revenue of $100 million with U.S. Security Associates and helped build USA to over $1 billion in revenue. In August, 2014, the company brought in a new CEO, and with him came a reorganization and change in management. I started Security ProAdvisors in July, 2015.
Q. You didn’t start out in this business. Earlier on, you were with the accounting firm KPMG (formerly Peat, Marwick, Mitchell), and held various financial positions, including one with WR Grace. What sparked the interest in security?
A. Believe it or not, I wanted to be more than a numbers cruncher and get into the people business. There was an opportunity with Wells Fargo Guard Services that allowed me to get out from behind the desk while leveraging my experience as a CPA, so I made the move.
Q. There are many so-called “people businesses.” The question remains: why the guard industry?
A. I believed the security industry had a lot of growth and therefore entered the security guard business.
Q. You were a branch manager at Wells Fargo Guard Services. What was that like, and how does it differ from working at an accounting firm?
A. At Wells Fargo Guard Services, I worked with clients and employees which is more enjoyable than just doing analysis. Every day in the security guard industry is different.
Q. Tell us about Security ProAdvisors.
A. Security ProAdvisors has an extensive network of former chief financial officers, controllers, and operating executives all of whom have worked in the security guard industry. And we’re well connected with buyers and sellers of security guard companies and private equity companies, so we understand the market and are able to assess value accurately.
Q. What’s a “day in the life” like at Security ProAdvisors?
A. I said I wanted to get into the people business, and I certainly have accomplished that goal. I use a combination of tools to network, including social media and good old fashioned cold calling. And I spend a good amount of my time speaking with owners of guard companies.
Getting your name out there can be challenging, but I’ve been in the business for 25 years; most of my business come through referrals and networking.
Q. What’s the company’s focus?
A. We specialize in two areas: Advisory/Consulting, and Brokerage/Valuation, and cover just about everything you can think of. On the advisory side, a sampling of offerings include financial analysis, client retention review, sales and marketing, cost management and general liability assistance.
The majority of business – almost three quarters – comes from mergers and acquisitions, mainly on the seller side, but we also represent buyers. And we do it with strong, long-term strategic planning. For example, we offer advice on the right way to sell a business, its value, and how to get it ready for a sale. Even if you’re not in market to sell, we can help improve profitability.
Q. What are some of the drawbacks in providing these types of services?
A. You have to remember that there’s an emotional component to all of these transactions. Of the two units the consulting side is the more challenging. Owners sometime resist change in the belief that their way is the only path to success. Being on the outside, we can offer a different perspective as well as expertise on a range of issues. The challenge on the M&A side is more straightforward: client expectations. Sometimes people think their company is worth more than it is. We provide the research and analysis needed to ensure the best price.
Q. There are many brokerage and consulting companies that do what you do. What sets Security ProAdvisors apart?
A. Whether using us or someone else, any guard company looking for these types of services should hire someone who knows the business and has industry experience. Many brokers don’t, or are involved in other markets. Specialization matters.
Q. If a company is looking to sell, couldn’t they simply go it alone?
A. I’d advise against it. From a value point of view, you can realize more when you hire someone who understands the market. If you do it alone, you put yourself at risk with your competition because of confidentiality; if word gets out that you want to sell that could affect your customer base and destabilize the business.
Q. Have you ever had a deal you couldn’t make? That is, have you ever not been able to find a buyer?
A. Never happens; there’s always a buyer at the right price, and through my network of contacts, I’m able to make sure that both sides are happy.
Q. What’s the typical ROI?
A. It varies. Where a company is located, whether it’s a big city or small city: that all affects the final outcome. It also depends on the type of accounts a guard company has, and whether there’s synergies between the buyer and seller.
Q. We’ve talked a lot about the M&A side. Can you give me an example of what you can do for customers who aren’t looking to sell?
A. Well, as I mentioned before, I’m a CPA and have expertise on the accounting end of the business, so if you’re looking for financial advice, we can help. We can also help you innovate through the use of information and technology. For example, many guard companies use QuickBooks to track their financials, but the applications aren’t industry-specific. Our tech consultants can provide tailored solutions and better control of data so that you can better manage your business.
Q. Your customers hail from the guard industry. Within that specialization, what’s your niche?
A. We focus on the small and medium sized guard company. We operate in all 50 states, and have, at times, extended our reach internationally.
Q. Do you ever have someone outside the guard industry looking to buy a firm? What type of advice can you offer?
A. Yes. They need to understand the operations of the business before analyzing the numbers.
Q. Like other segments, the guard industry has experienced consolidation, How if at all, has this affected growth?
A. Consolidation isn’t new; it’s been going on since the ‘70s and will continue. Just recently, we saw the merger of Allied Barton and Universal, creating a mega-company. But even as this occurs, new guard companies, in the small to mid size range pop up regularly, a result of the growing concern over security and risk of threats.
Q. What would you tell those looking to pursue a career in the guard industry?
A. If you enjoy working with people, it can be a rewarding career.