Thinking of Buying a Security Business in Australia? Here Are 3 Vital Questions to Ask

The Australian investigation and security services industry generates $13.9 billion in revenue in 2025, employing more than 92,000 people across 6,700 enterprises.

Industry profit margins average 11%, with total profits reaching $1.5 billion, and revenue is forecast to grow at 2% annually through 2031, surpassing $15.3 billion.

Rising crime rates, increased demand for corporate protection, and new government legislation for critical infrastructure are fuelling consistent demand. At the same time, technological shifts such as AI-based monitoring, predictive surveillance, and integrated security management are reshaping how firms operate.

1. Is the Business Financially Sustainable and Profitable?

Why It Matters:

Security services combine labour-intensive operations with emerging technology costs. Understanding cost control and contract diversity is essential to sustaining profitability in a highly competitive sector.

What to Check:

• Revenue and profit margins – Benchmark performance against the 11% industry average to ensure operational efficiency and strong pricing strategies.

• Cost structure – Wages account for nearly 50% of total revenue, reflecting the industry’s labour intensity. Firms that manage subcontracting efficiently or adopt automation tools typically achieve higher margins.

• Client contracts – Long-term service contracts with corporate clients, events, or government agencies (common among major players like MSS and Wilson Security) help stabilise revenue and reduce volatility.

• Technology investment – Businesses that leverage integrated monitoring systems, access control, and AI analytics improve operational efficiency and attract larger, tech-conscious clients.

2. How Competitive Is the Business’s Market Position?

Why It Matters:

The Australian market is fragmented, with over 80% of revenue generated by smaller firms, but large operators dominate major government and defence contracts. Standing out requires strong relationships, compliance, and innovation.

What to Check:

• Client concentration – Firms serving diverse sectors such as retail, healthcare, and critical infrastructure are less exposed to demand swings.

• Geographic presence – NSW accounts for 36% of all security establishments, followed by Victoria and Queensland. Businesses operating in these states gain access to denser markets and more contracts.

• Licensing and compliance – Check adherence to the Security Industry Act 1997 (NSW) and Private Security Act 2004 (VIC), as breaches can jeopardise contracts and reputations.

• Reputation and technology adoption – Partnerships with tech firms (e.g., Gallagher Security) and government contracts offer competitive differentiation in an increasingly digital security environment.

3. Is the Business Aligned with Industry Trends and Future Growth?

Why It Matters:

Security providers that adapt to new threats and technological change are best positioned for growth. The rise in cyber threats, digital payment systems, and AI integration will redefine how the sector operates over the next decade.

What to Check:

• Critical infrastructure compliance – The Security of Critical Infrastructure Act amendments (2024) have increased demand for specialised consulting and integrated physical-cyber protection services.

• Technology integration – AI-driven facial recognition, predictive analytics, and robotics are rapidly expanding opportunities in surveillance, monitoring, and event management.

• Market trends – Retail theft rose 47% in Victoria in 2024, pushing supermarkets and small businesses to invest in advanced security measures like anti-theft gates and AI surveillance.

• Cashless economy impact – Traditional cash-in-transit services are shrinking, but firms diversifying into monitoring, consulting, and data security are capturing new growth.

Ready to Invest in a Thriving Security Business?

With stable growth, strong margins, and rising demand for integrated physical and digital protection, Australia’s security industry offers solid potential for investors.

Success depends on maintaining regulatory compliance, securing long-term contracts, and leveraging advanced technologies to deliver scalable and reliable protection solutions.

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