Topmax Security - Market Feasibility - Case Study Example

Student Name: Tutor: Title: Business Plan Course: Executive Summary This report is a business plan for Topmax Security that intends to penetrate the private security industry in Australia. The security industry has been growing steadily due to the increased need of security by private and public organizations. The security company will target the low end market that represents a market niche that has not been served fully by existing security firms. The introduction explains the entire business idea and points out the important components of the report. The market feasibility accesses the viability of the business opportunity within the private security industry. The report gives important historical information and changes that have occurred in the security industry. The need of security is projected to grow with the coming of the information age in the country. The technical feasibility discusses the technical aspects of the business that will lay down the needed infrastructure for operation. Human resource feasibility outlines the human factor that will influence the success of the business by defining the roles of every member of the company. The financial feasibility analyses the financial projections and the sources of financing for the company. The conclusion provides a summary of the main issues in the business plan. Table of Contents Executive Summary 2 Introduction 3 Market feasibility 4 Technical feasibility 7 Human feasibility 8 Financial feasibility 10 Conclusion 11 References 12 Appendix 12 Introduction Use of private security in crime prevention as well as law enforcement activities has grown tremendously in the recent past. The private security industry is very important in every society since it bridges the gap that has been left by police through providing customized security services to individuals and organizations in private and public sector. The police force is encountered by huddles that face most huge bureaucratic organization. The private security industry in Australia is huge and shrewd strategic planning can lead to a security company to grow (Warren & Leitch, 2011). Majority of the security companies have confined themselves in cities and concentrated on high-end market. The low end market has not sufficiently been serves. This business plan presents the idea of Topmax Security that will use the low end market to penetrate the private security industry. The company targets to use service excellence and discipline of its workers as values that will entice customers to enlist for its services. The company is projected to breakeven in two and half years after inception. Growth plan will include partnership and joint ventures. The main source of finance is loans from financial institutions and contribution from partners. The transforming of the Australian society into an information society creates the need for more protection of information as a vital asset in an organization. Security is omnipresent and the demand for security will be ever present as people look for the best services. Market feasibility Private security is huge industry within Australia and security services impact every aspect of lives of people. There are double private security operatives in Australia as compared to police. After substantial growth in the past few decades the industry is in a phase of relative stability and more attention has shifted to issues of professionalism, consumer protection, and government regulation. The Australian private sector has been responding in a dramatic way to the increasing demand for diversified policing roles (Ács, Szerb & Autio 2011). The Australian security industry has followed the international trends with regard to its development and its counterparts from overseas; it appears to have enjoyed duration of intensive growth from the 1970s to the 1980s. Figures from Victoria show that from 1980 to 1990 the number of security firms that are licensed as well as security guards doubled (Percy, 2013). Australian Bureau of Statistics figures show labour force estimates for security officers and guards register only a slight growth from 1994 to 1998-from about 31,000 to around 32,750 (Gahan, Harley & Sewell, 2013). State-based licensing figures indicate that a bigger industry as compared from ABS data. It is evident that security operatives are more than conventional police by almost two to one due to immense growth in the Australian security industry. Security industry is omnipresent in daily life and it will keep on growing. Police numbers have not gone down relative to population but have been overtaken by private security. If unlicensed personnel are included, the gap can be quite big. Data indicate that there are above five thousand security as well as investigative businesses that have been registered in Australia and more than one hundred and ten thousand licenses issues particularly to individuals, however, only five companies comprise of almost half of security industry market share. The private security industry is expected to grow following increase in electronic monitoring and surveillance and cash-in-transit (Qiu & La, 2010). The security industry is projected to grow slowly in the next five years. In spite of a decline in reported crime over the past five years, cautious businesses and households continue to invest in security services as well as crime-prevention measures. The demand for investigative and security services is increasing following the heightened global terrorism fear, increase in the use of internet and growing incidences of cybercrime. In the present time technology plays a crucial role in prevention of crime, including closed-circuit television (CCTV), online security as well as protection from identity theft or fraud (Warren & Leitch, 2011). The industry is at maturity level but there is a market niche in the low-end market that is not being served by the security providers. The privatization of security has not called for any legislative amendments. Private security providers get substantive authority from law enforcement and self-defense of citizens and from the rights of property owners in controlling entry to premises as well as protect property. Some special provisions support private security and some recent developments within the law have increased the scope of private operators (Percy, 2013). Australia is moving from a society that is industrialized to an information society like other industrialized countries. The impact of this trend on private security industry is huge. There be growth in the industry as more public and private organizations hire security firms to protect their valuable asset-information. Majority of security firms have concentrated in the high-end market providing their security services to well off customers who can afford their services. Security is paramount and every individual has to feel secure in whatever environment they are in. Topmax Security will concentrate in the low-end market, providing affordable security to people who cannot afford expensive services from top-notch security companies. Despite the many numbers of security companies in Australia, there are groups of people who cannot affordable (Gahan, Harley & Sewell, 2013). Topmax Security will use the low end market to penetrate the security industry and later on it will be prudent to compete in the high-end market after gaining a sizeable market share. The company will focus in standing out as an excellence service provider with the keen interest of meeting the customer’s expectations. The external factors include in the security industry social issues like bias treatment of indigenous communities by security officers, the economic situation in the country, investor confidence, increasing threats of hacking and the geopolitical climate in the country. Barriers to entry in this industry include the technical know-how required to run a security firms and huge financial base that is needed in setting out the infrastructure of a security firm. Many entrepreneurs cannot meet the financial obligations and technical know-how of running a security firm. Technical feasibility Topmax Security will use modern technology to secure the homes and business premises of clients. The company will need the supply of modern equipment in providing security service and protection to its clients. Installation of CCTV camera is needed to record the activities around a client’s property or home (Warren & Leitch, 2011). The company will look for a credible manufacturer and distributor to provide the needed equipment. Alarm systems will be available for clients to raise any alarm or alert the company staff in case of any breach in security. The company requires a central premise to host its headquarters that will be in charge of coordinating activities of branches and Topmax spread in various parts of the country. The information technology department can be subcontracted to an IT firms that is renowned for providing excellent services so that Topmax Security concentrates on providing security. The information technology infrastructure will enable the various departments in the company to coordinate properly and respond to the needs of customers promptly (Wood, 2011). The company will engage the services of a website developer to come up with an attractive website for Topmax Security that will be an interactive forum for clients and the company. The company projects to grow steadily and get into partnership or joint ventures to increase access to more capital base. The company will expand into armoured security escort with time and after meeting the needed security regulations. In ten years the company will evaluate its chances of going public through sale of shares. The company will use main media channels to advertise its services to customers. Topmax Security will use both electronic and print media to put ads targeting low-end clients. Public relations articles through print media will be used to explain to the public the uniqueness of the services offered by the company. Personal selling will also be used to potential customers in their homes. Sales representatives will be used in marketing the services provided by the company (Qiu & La, 2010). Topmax Security will subcontract the advertising function to an advertising firm but decide the content of the advertisement. The confidentiality and privacy of clients will be important to Topmax Security in order to maintain a reputation of trusted partner. The company has to keep up with changes in information technology that are bound to affect its operations (Percy, 2013). More sophisticated information technology infrastructure will be developed to deal with challenges that come with the information age. Compliance with set laws and regulations is a prerequisite for Topmax Security to operate. The company will have a legal expert that will ensure that it complies with federal and state laws that guide the operations of private security firms. The business has to be legitimate in the eyes of the law. The company will comply with the provisions in the constitution with regard to security and ensure there is no violation of any security standards. Human feasibility The company will be owned jointly by a maximum of five partners who will play an important role in sourcing for financing. The owners will elect a director who will act as the company CEO. The company will have a security manager who will be in charge of all aspect of security. The security manager will develop a strategic plan and implementation policies that will see the company grow steadily as it penetrates the market. The IT subcontracted company will install and service security equipment in coordination with manufacturers. Locks, alarms and CCTV will be installed in the clients’ business premises or homes (Prenzler & Sarre, 2012). The control room operator will be in charge of monitoring security cameras, access control as well as alarm systems. He will alert the security guards in case of anything or incident. The guards or security officers will provide protection through static guarding, call out, screening, patrolling, and cash-in transit. The security officers will be very important in the strategic growth of the company and providing excellent service to customers. Topmax Security will require the services of forensic officer in scrutinizing evidence and retired service men to train the security guards. The officer will train the security guards security competencies. The company will also identify a manufacturer that will supply quality and unique uniforms for security guards. Discipline and provision of excellent service will be the agenda of the company staff (Ács, Szerb & Autio 2011). The company has to meet government legal regulations because it commences its operations. The company will need a finance officer who will be in charge of financial matters of the business including budgeting for other departments of the company. Financial strategic planning is important and top management of the company will participate actively in drawing up the financial plan. Employees will be motivated through giving them bonuses and paying for overtime (Klyver & Bager, 2012). It will be important to listen to any grievances raised the employees and give them an opportunity to suggest solutions. Security guards have an opportunity to grow through the ranks to management level. The employees will be recruited through a competitive process by use of a recruiting firm. Training will be done internally and in cooperation of other established security firms. The company can subcontract training of employees to trusted partners renowned in security matters. Performance appraisal and upgrading of skills and competences will be part of the growth strategy. Financial feasibility The company will look for financing from commercial banks and corporative societies. Contributions from partners and friends will be important in starting out the company. Financial risks entail high interest rate charged by financial institutions and inflation due to increased cost of living. The company will charge households and business considering the size of the area to be covered and the value of property involved (Schaper, 2016). The price will be charged according to the security needs of the customers. The security service will be charged monthly but any alarm response will be charged 25% on top of the monthly charges. The company requires $420,750 to launch the business idea. The guards or security officers will receive a constant salary and bonuses according to their performance. The company is projected to breakeven in two and half after inception. The gross profit margin after removing all the expenses is projected at 25% while the net profit margin is projected at 15%. The company is expected to break even in two and half years. The company runs the risk of paying damage to property where it is charge of security and mandatory insurance cover will be required in order to pay off any claims from clients (Edwards, 2010). Any financial bust in other sectors has a great impact on the operations of the business. The global financial crisis in 2008/08 affected many companies leading to some of them to collapse. The pressure from investors and strain of interest rates can affect the company’s performance negatively. The financial market has its own turbulences that are beyond the control of Topmax Security Limited. The company management will have to watch out on financial risks that can come about changing regulation in the financial industry. Changing regulations in the financial market can lead to shrinking profits and a dip in the investor confidence. Conclusion The company main agenda will be to create a corporate culture that will emphasize on excellence customer experience. The customer is king and the company staff will be trained on etiquette and how best to handle case from clients. The customer service will be available 24/7 and staff member will be expected to scrutinize every case with uttermost keenness. Topmax Security is projected to grow steadily and penetrate the high end market within three years. Despite the security industry being at the mature phase in its life cycle, the transformation of Australian society from industrialized to information society creates the need of having more need for protection of information as a major asset of organization. The need for protection and security from both public and private organizations leads to growth in the private security industry. Security is fundamental and people in the low end market have been neglected when to personal and property protection. The low end market presents an opportunity can will help Topmax Security to penetrate the security industry. References Ács, Z.J., Szerb, L. & Autio, E., 2011. Global entrepreneurship and development index 2011 (Vol. 400). Cheltenham, UK/Northampton MA, US: Edward Elgar. Edwards, J., 2010. Australia after the global financial crisis, Australian Journal of International Affairs, 64(3), pp.359-371. Gahan, P., Harley, B. & Sewell, G., 2013, Managerial control of work in the private security industry in Australia. Urban (in) security: Policing in neoliberal times. Toronto, Red Quill Books. Klyver, K. & Bager, T.E., 2012. Entrepreneurship policy as institutionalized and powerful myths, International Journal of Entrepreneurial Venturing. Percy, S., 2013. Regulating the private security industry (No. 384). Routledge. Prenzler, T. & Sarre, R.T., 2012. The evolution of security industry regulation in Australia: A critique. IJCJ, 1(1), pp.38-51. Qiu, M. & La, B., 2010, Firm characteristics as determinants of capital structures in Australia, International journal of the Economics of Business, 17(3), pp.277-287. Schaper, M. ed., 2016, Making ecopreneurs: developing sustainable entrepreneurship, CRC Press. Warren, M. & Leitch, S., 2011, Protection of Australia in the cyber age, International Journal of Cyber Warfare and Terrorism (IJCWT), 1(1), pp.35-40. Wood, F.Q., 2011. Entrepreneurship in Australia: the missing links, Melbourne. Appendix Start-Up expenditure and Expenses Worksheet Item Cash Required Land 20,000 Capital equipment 50,000 Computer 5000 Licensees and permits 10,000 Lease improvements 15,000 Utility hook up & installation 5,000 Advertising (preopening) 21,000 Insurance 100,000 Other 8000 Total estimated one-time cash requirement 216,000 Start-up operating expenses Item $ Owners salary 3000 Employees salary and wages 120,000 Rent 8,000 Promotion expenses 5,000 Supplies and postage 1500 Vehicle expenses 9000 Telephone 3000 Travel 2000 Interest 15,000 Maintenance 5,000 Other 5000 Total cash operating expenses 166,500 Add: one-time cash requirement 216,000 Add: 10% safety factor 38,250 Total cash required for Start-up. 420,750 Read More