The Benefits of Organic Growth

 

Security firms, like firms in other industries, can grow in one of two ways:

• Organically, by adding clients, employees, and locations over time
• By merger or acquisition (M&A) with another security firm

In general, growing organically may be slower (though steadier) than merging with or acquiring another firm. But this approach offers benefits to both employees and clients.

 

Going (and Growing) Organic

A security firm is more than a uniform and a vehicle sign. It’s a culture, a set of policies and procedures, a philosophy, a way of doing business. Growing organically preserves, extends, and strengthens every one of those aspects.

What does it mean to employees and clients when firms grow organically? How are they affected when a firm grows by merger or acquisition? If your employer or security provider tells you it’s merging with another firm, or buying or being bought by one, what questions should you ask?

From our 23+ years in the industry, and hundreds collectively from our leadership, here are some answers.

 

Benefits of Organic Growth

Organic growth creates much less disruption for clients and employees. This strategy preserves the company’s culture. Service remains consistent. Clients see the same familiar faces providing security and protection. Employees keep their seniority and benefits, working for an employer they know and trust.

For many clients, their security team is the “face” of the organization. Security officers create the first impression that employees, clients, visitors, tenants, students, etc. see. Those officers are familiar and trusted faces. They not only know the people, but also the facilities, and they can spot when something isn’t right.

Clients also know that policies, procedures and service levels will remain consistent. They’ll receive the same reports and talk to many of the same managers.

Organic growth also benefits employees. As security firms grow, more opportunities are created for security officers and others who want to learn and grow. Growth means more locations, more promotions, and the chance to take on more responsibility.

 

The Current Landscape

Starting even before the pandemic, we’ve all seen a new wave of mergers and acquisitions in the security industry. Larger firms are growing by swallowing smaller firms. Small and medium-sized firms that have suffered financially during the pandemic are merging and being acquired.

Historically, mergers and acquisitions result in job losses. In many cases, employees who perform redundant functions will either be reassigned or terminated. Companies don’t need two HR or accounting departments, and operations teams are often asked to take on more clients in their portfolio.

For clients, a merger or acquisition means changes as well: new faces, new policies and procedures, and possibly price increases. If a firm takes on debt to acquire a competitor, often the firm will have to raise fees or reduce service to pay that debt.

For employees, hours and locations may change, and benefits and opportunities to advance may be reduced.

 

Questions to Ask

Clients who learn about a merger or acquisition that affects their security partner should do the same due diligence as when hiring a security firm. Don’t just ask, “What does this mean to us?”, but dig deeply into every aspect of operations.

• Review the current contract, item by item, confirming deliverables
• Ask whether current security officers or managers will change
• Check on the types and frequency of reporting, both day-to-day and incident reporting
• Know what your servicing manager’s portfolio size is and whether or not it will increase
• Find out what to expect when the contract is renewed
• Check current client references of the new firm, especially clients with similar security situations

 

Sunstates Security has grown organically by double-digit percentages year after year. To discuss the benefits of working with companies that grow organically, such as Sunstates, or to review your current security needs, please call Sunstates Security at 866-710-2019 or contact us.