Security company CFO services: bid the burdened guard-hour, not the base wage

The fully-burdened guard-hour

The wage is roughly the visible half of a guard-hour; the rest arrives on other invoices across the year. Before any bid goes out, every layer belongs in the hourly cost — the client is buying hours, and any layer you forget is margin you donate.

Margin goes on top of the full stack. A bid built as wage plus a habitual percentage is guessing at more than half of its own cost base — and in a business of multi-year contracts, a guess compounds. We rebuild the stack per site, not per company: a condominium concierge post and an industrial patrol carry different premiums, different WSIB exposure, and different supervision loads, so one blended rate misprices both.

Bidding discipline: the contracts you decline make the year

Every tender gets a walk-away number before it gets a price, and three contract clauses decide whether a bid that starts profitable stays profitable. Wage escalation: Ontario's minimum wage moves most years, and a multi-year fixed bill rate silently absorbs every increase unless the contract indexes it. Billable-hour definitions: training time, site orientation, and statutory-holiday premiums either bill to the client or come out of your margin — the contract should say which. Scope drift: extra patrols, incident reports, and ad-hoc coverage that creep in unbilled. We review the year's wins and losses annually; the goal is not a higher win rate but a higher margin on what is won. The walk-away number also prices credit risk — a large contract with a shaky payer is a bigger loan, not a bigger win. Won contracts then get a monthly site report: hours billed, hours actually paid, and the overtime share, so a drifting site is a conversation in month two instead of a write-off in year two.

Retention economics: turnover is a line item

Replacing a guard costs real money that never appears as a single entry: recruiting, the PSISA licence lead time, onboarding and training hours, site familiarization at lower productivity, and — the expensive part — overtime for whoever covers the empty shifts in between. Add the client-relationship risk of a revolving door on a marquee site, and paying above the wage floor is often the cheaper policy. But only pricing can fund it. That is the loop we manage: retention tracked as a monthly KPI, churn costed per departure, and bids priced so the wage strategy survives contact with the contract. Schedule stability is the cheapest retention lever of all — guards leave unpredictable rosters faster than they leave modest wages, so fill rates and last-minute shift changes sit beside pay in the retention review.

Scaling 24/7 coverage without margin leakage

A single 24/7 post is 168 hours a week — more than four full-time schedules before vacation, training, and sick coverage are counted. Growth in this business is therefore payroll growth: every new contract means guards paid biweekly from day one against a client that pays in 30 to 60 days, so each win consumes working capital before it returns any. We forecast the cash cost of every new contract before it is signed, watch overtime as its own ratio — unfilled rosters convert straight into time-and-a-half — and keep scheduling data tied to billing so every scheduled hour is either billed or explained.

The payroll engine itself — premiums, stat pay, high T4 volume — is covered by our payroll services. Cross-border issues are rare in guarding, but US parent companies, US-headquartered clients, and border-city contracts do come up; see our cross-border tax page for security companies. Engagements are fixed-fee and scoped after a discovery call, with Brampton and the GTA — one of the densest security markets in the country — as home turf. Details are on our advisory and CFO services page.