Spending on security by U.S. businesses has grown dramatically, expected to top $377 billion this year, up from $319 billion in 2013 and $341 billion last year, according to a 2014 report.
That study, the “United States Security Industry Survey of 2014,” by the Institute of Finance & Medicine and the American Society of Industrial Security (now known as ASIS International), found that spending on security products, such as alarms, video surveillance and automated locks and entry devices, has nearly tripled from $11.7 billion in 1990 to a predicted $34 billion in 2015. The study found that 19% of U.S. companies plan to increase spending on alarms this year, with 14% increasing spending on perimeter protection (fencing) and 33% expecting to spend more on the fastest growing segment of the security products industry, video surveillance. Spending on surveillance infrastructure and cable are predicted to double by 2018.
A large, but unknown percentage of that will be spent by small businesses.
The core value of security to a small business
Steve Leitz, director of small business for Boca Raton, Fla.-based Tyco Integrated Security (TycoIS), said his firm sells small businesses on security as a return on investment.
“Going without security is a huge mistake. When they do that they put everything at risk,” Leitz said. “And it’s so unnecessary. You can reduce your risk with a few simple offerings.”
“You have to quantify potential risk of loss and potential productivity gains. Having video evidence can be very useful in refuting fraud claims. We’ve seen false claims thrown out even before going to court when video evidence shows what really happened. That provides an added comfort for a small business owner,” he said.
Mark Trackman, owner and president of the American Alarm Corporation in Long Grove, Ill., has worked in the security industry for 40 years. “You have a lot tied up in your business and want to protect your investment,” he said.
Trackman said that close circuit camera and TV systems (CCTV) save businesses money in different ways.
“Employees and customers don’t steal as much when they know someone is watching. Employees don’t goof around as much and are more productive. An owner can keep track of employees coming and going. And you can see where customers are congregating to know where you might place impulse items that can improve sales,” he said. “Security systems do a lot for small businesses.”
Steve Oplinger, chairman of the Physical Security Council for the Alexandria, Va.-based American Society for Industrial Security, now known as ASIS International, said security systems, particularly cameras and CCTV systems, can be used as management tools. Oplinger, a Palm Coast, Fla.-based security systems designer, said he installed a security system in one of a restaurateur’s 16 pizza parlors for free noting that if the system didn’t improve his bottom line he could keep it without cost.
“Within the first two weeks he lost 25% of his employees. He ridded himself of his ‘silent partners’ (who had been stealing from him). But even with the staff reduction, he was still operating more profitably,” Oplinger said. “He had us install the system in all the restaurants. That’s how I define return on investment.”
Security is cost effective
Small businesses don’t have to break the bank to protect themselves, said Danny Jones, general manager of Hobart, Ind.-based Security Industries, part of The American Group (TAG).
Jones said the technology has improved so much and the costs dropped so significantly that small businesses can now afford much higher levels of security than only a few years ago. “It’s not your grandpa’s burglar alarm anymore,” Jones said “Everything is much more sophisticated”
He said today’s technology advances make it possible for a business owner to monitor parking lots, building perimeters and even review recent camera recordings from a smart phone on a beach in Hawaii.
“Start with lighting,” said Jones, who has been in the security business for 30 years. “A well-lit parking lot is critical to people’s safety, particularly in the winter, when it gets dark at 4:30 p.m.”
He said small businesses at a minimum should light all entrances and exits as well and if they have the resources, erect security fences when appropriate to keep outsiders from walking onto their property. Stepping higher on the security ladder, he suggested gatekeepers that control access to vital buildings through automated locks that require employee key fobs or security ID cards.
Jones said motion lights add another level of security, letting intruders know that they’ve been detected and triggering cameras to record security breaches. “They don’t record all day long, but the motion lights trigger them to turn on for off hours. You can store 30 to 60 days on a single storage card. Years ago that would have taken dozens of VHS tapes.”
He said that the recordings from digital cameras can be uploaded offsite to a cloud or server, preventing intruders from stealing or destroying the film.
“Some thieves think they’ll walk out with the hard drive, not knowing you’ve got a secondary backup offsite,” Jones said. “If you can stop even one theft, break-in or act of vandalism, you’ve probably paid for the cost of the cameras and possible the whole security system.”
“The software exists now to allow many different electronic devices to link together,” he explained. “And it helps law enforcement.”
He said many small businesses add additional levels of security by building vestibules to office buildings with strong locks and unbreakable glass windows that prevent easy entry and allow a further security stopping point. Advances in materials sciences have produced glass products that are “bulletproof, shatterproof and will absolutely stop intrusion.
“Those also are effective in reducing heating and cooling loss, another payoff,” he said.
Many new door locks also have electronic components that can include digital keypads and entries that control heavy duty deadbolt door strike systems. “Nobody will kick that in. That’s your first line of defense.”
Wide range of security issues and types
Tom Hebda, general manager of Lombard, Ill.-based Tri-Cor International, said perimeter access control equipment and services, like barrier gates, long-range readers (similar to toll road transponders) landline and cellular telephones, wireless intercoms, cameras and other access controls, keeps honest people honest.
“We replace mechanical keys with card access, allowing business owners to completely control their building and monitor where people can go and for how long. Owners can restrict people on a hierarchy basis: allowing the owner or managers 24/7 access and employees more limited access based on their schedules. And all this can be controlled through a computer.”
Adam Steury, a commercial account executive for Tyco Integrated Security in Fort Wayne, Ind., said when he performs security reviews he tries to imagine himself in a burglar or robber’s shoes.
“Why would I target you? If you’re located in a strip mall and everyone is secured except you, who do you think I’ll break into first? If I break in after-hours, how much can I steal? Is preventing that worth installing a $1,000 to $2,000 system? If the cost of protecting your assets is less than the value of the assets, it’s worth it,” Steury said.
More than Security
ASIS International’s Oplinger said he is unaware of an industry formula small business owners can use when shopping to determine the right cost and scope of a security system.
“That’s because no two businesses are the same,” he said. “My security costs at a Mc Donald’s franchise in a well-trafficked, higher crime urban area will be higher than the same McDonald’s franchise in a small, rural town. They both need security systems, but those should be predicated on the needs of that particular facility in that location and what the owner feels is necessary to protect his investment.”
He said that if a restaurant franchise costs millions of dollars in fees, property, building and product supplies, staff and materials and security costs $30,000, “In the scheme of things, it’s really pennies. That $30,000 is protecting your millions in investment.”
And installing security systems offers more than just protection from intruders
Oplinger said the information gleaned from the cameras can even be instructive, improve profits and even build employee morale. He recounted one customer who spent 30 to 60 minutes per week reviewing the camera recording to thank and compliment employees who went above and beyond their daily duties.
“That owner increased his bottom line by 34%,” he said.
He said making employees feel safe and comfortable in their workplace is a growing priority. “One newer development we’ve seen is the growth of panic buttons. Many people don’t know they’re available and can usually be added to an existing system for around $100. In a roundabout way, having a security system is like having an insurance policy.”
Jeff Belaski, co-owner and co-founder with Chef Michael Donono of Sacramento’s The Waffle Experience, said their breakfast and lunch eatery is located in an industrial park across from a vacant lot.
“At night this place is quiet and kind of isolated. But I sleep better knowing we’re secure,” said Belaski, who formerly owned a mortgage company. “I can check our cameras from my home 16 miles away. That was one of the big selling points. It’s given me peace of mind.”
He said he and his partner spend more money on their TycoIS security package— which includes motion sensors, keypads, flashing strobe lights, high security door locks, interior and exterior cameras, passcodes for computers and inside silent alarm— because they care about their staff.
“When I leave here, I set the alarm and I’m done. If it goes off, police will call me. I can watch what’s going on live and feel secure that my valuables are protected.”
He said the partners have their whole lives wrapped up in their business.
“We wanted to protect our assets. Our employees are our family and we take care of our family and want everyone to be safe. If spending a little more insures their safety and peace of mind, it’s worth it. You can’t treat security like an afterthought. That would be like getting into a car without a seatbelt.”