Starting a Security Company in Colorado | A Step-by-Step Guide

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Colorado Security Company

Starting a security company can be a lucrative business opportunity in Colorado, especially in today’s world, where the demand for security services is rising. However, Colorado requires careful planning, a thorough understanding of the industry, and diligent execution to ensure success. This article will provide a comprehensive guide on how to Start a Security Company in Colorado and help you navigate the various steps involved in setting up your own Limited Liability Company.

Webinarcare Editorial Team will help you gain knowledge through thorough research and market study. Before starting your Colorado security company, all the steps in this article must guide you.

How to Start a Security Company in Colorado

What is a Security Company in Colorado

A security company in Colorado is a business organization providing varying protection services to individuals and other businesses. These services can range from personal protection, akin to bodyguard services, to security systems for large corporations. Such companies aim to safeguard their clients’ assets by mitigating potential threats and breaches. State laws regulate them; they must obtain appropriate licenses and certifications before starting their operations.

To start a security company in Colorado, one may form a Limited Liability Company (LLC). Setting up an LLC in Colorado adds credibility to the business, protects personal assets, and often simplifies tax filing processes. With an LLC, the company’s assets and liabilities are separate from those of its owners. Therefore, the owner’s personal property cannot cover the company’s debts.

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How to Start a Security Company in Colorado

To form an LLC for a security company, there are various steps you need to be aware of, especially if you will form it in Denver. Here are the necessary steps and proper guidelines for starting a security company. 

Step1: Research the Market and Competition

Before starting a security company, studying the market and competition in Colorado is essential. This will give you a better understanding of the existing security companies, their services, and their target clients. You can use various resources such as the internet, local business directories, and networking with security professionals in your area.

While researching the market, focus on identifying the demand for various security services, such as armed or unarmed security guards, alarm monitoring, and security systems installation. This will help you determine the type of services your company will offer and the target audience.

Step 2: Develop a Business Plan

A well-thought-out business plan is crucial for starting a security company in Colorado. The business plan should outline your company’s goals, target market, services, marketing strategies, and financial projections. It should also include an analysis of the competition and potential challenges your company might face.

A solid business plan will help you stay organized and focused on your objectives and will also be required when seeking financing or investment for your security company.

Step 3. Choose a Business Structure

When starting a security company in Colorado, you must choose a business structure that best suits your needs and meets the legal requirements. Here are the most common business structures to consider:

Sole Proprietorship

This is the simplest business structure, where you, as the owner, have full control over the business and are personally responsible for all debts and liabilities. This may be suitable for small security businesses with minimal risk exposure.

Partnership

Starting a limited partnership or general partnership in Colorado is also an ideal business structure since it is owned by two or more individuals who share the profits, losses, and responsibilities. This can be a good option if you’re starting a security company with a partner and want to share decision-making and financial responsibilities.

Limited Liability Company (LLC)

An LLC combines a corporation’s and a partnership’s benefits. Owners, called members, have limited personal liability for the company’s debts and actions while also enjoying flexible management options. This is a popular choice for small to medium-sized security companies, as it provides some protection for personal assets.

Corporation

A corporation is a separate legal entity owned by shareholders. It provides the most protection from personal liability but also involves more regulations, paperwork, and costs to set up and maintain. Corporations in Colorado are typically more suitable for larger security companies with multiple employees and substantial assets.

When starting a security company in Colorado, consult with a Business Attorney in Colorado to determine the most suitable business structure for your specific needs and goals. We recommend to start an LLC since it offers limited liability protection for your business.

– WEBINARCARE EDITORIAL TEAM

Step 4: Register Your Business

Once you’ve chosen a business structure, register your security company with the Colorado Secretary of State. This typically involves filing the necessary paperwork and paying a registration fee. Here are the things you need to apply for or hire to register your Colorado security company.

Choose a Name

Choosing a name for your Colorado security company is important in establishing your brand identity and reflecting your services. Here are some tips and suggestions to help you choose a name:

  • Keep it Simple and Memorable: Choose a name that is easy to pronounce, spell, and remember. This will make it easier for potential clients to find and remember your company.
  • Incorporate Keywords: Including words related to security, safety, or protection in your company name can help potential clients understand what services you provide. Some examples of keywords are “guard,” “patrol,” or “surveillance.”
  • Reflect on Your Niche: If your Colorado security company focuses on a specific niche, such as residential, commercial, or event security, consider incorporating this into your company name.
  • Consider Using Your Location: Incorporating the name of your Colorado or a specific city or region can help potential clients identify your company as a local business and establish a connection to your service area.
  • Check for Availability: Before settling on a name, ensure it is not already used by another security company in your area or registered as a trademark. You can check the availability of a name by searching the Colorado Secretary of State Business Database Search‘s website and the United States Patent and Trademark Office (USPTO) website.

Based on these tips, here are some sample names for a security company in Colorado:

  1. Colorado SecureGuard Services
  2. Colorado Sentinel Protection
  3. SafeShield Security Colorado
  4. Colorado Premier Patrol
  5. Colorado Homeland Security Solutions
  6. Colorado Watchtower Security Services

Remember to choose a name that reflects your company’s values, services, and target market while being unique and memorable. There is a complete guide on Colorado Business Name Search for you to have a proper Colorado security company name. 

In Colorado, if you do not wish to file your security company right away but want to hold the name that you have decided on, then you can reserve your security company name for 120 days. You must file a name reservation application with the Colorado Secretary of State to keep the name. 

You can register your business under a different legal name if your preferred name isn’t available. Once you have chosen a name, you can submit an application for Colorado DBA (doing business as). 

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Hire a Registered Agent

In forming a security company in Colorado, the role of a Registered Agent is crucial for ensuring compliance with state regulations and maintaining a line of communication with the state government. A Registered Agent is a person or entity responsible for receiving important legal documents, and government notices on behalf of your security company. Here are some key roles and responsibilities of a Registered Agent in Colorado:

  • Legal Document Reception: A Registered Agent receives legal documents, including lawsuits (also known as service of process), subpoenas, and other official correspondence related to your business. They promptly inform you of legal actions or requirements affecting your security company.
  • Government Correspondence: A Registered Agent receives official notices, correspondence, and documentation from the state government, such as Annual Report notifications, tax notices, and other compliance-related information.
  • Compliance Assistance: A Registered Agent will help your security company maintain good standing in Colorado by promptly notifying you of legal and compliance-related matters. This can be crucial for avoiding penalties, fines, or even the dissolution of your business.
  • Maintaining a Physical Address: A Registered Agent must have a physical street address (not a P.O. Box) within Colorado, where they are available during normal business hours to receive legal documents and government notices. This is particularly important for businesses that do not have a physical office location in the state or for out-of-state business owners.
  • Record-Keeping: A Registered Agent may also offer additional services, such as maintaining and organizing your business records, tracking filing deadlines, and assisting with annual report submissions. 

You can serve as your Registered Agent, appoint a friend or family member, or hire the Best Colorado Registered Agent Services.

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File The Articles of Organization 

If you form an LLC for your security company, you must file the Colorado Articles of Organization, which costs $50. It is crucial to provide accurate and complete information on this document, as errors or omissions may result in delays or rejection of your filing.

Create an Operating Agreement

An Operating Agreement in Colorado is a legal document outlining the ownership structure, management, and operating procedures of a Limited Liability Company (LLC). While not always required by law, having an operating agreement is highly recommended for security companies in Colorado to ensure clear communication and expectations among the owners.

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Obtain an Employer Identification Number

You must first obtain an Employer identification number (EIN) in Colorado from the IRS if you will open a bank account or hire an employee for your Colorado security company. 

The application of an EIN in Colorado can be through the following:

  • Apply Online- The online EIN application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that the Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is four weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

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Step 5: Obtain Licenses and Permits

Starting a security company in Colorado requires obtaining specific licenses and permits. These may vary depending on your location and the services your company will offer. Some of the common licenses and permits needed for a security company include the following:

  • Security Company License: This mandatory license allows you to operate a security company in Colorado. The requirements for obtaining this license may vary depending on your location but generally include submitting an application, paying a fee, and passing a background check. The cost of filing a security company license ranges from $250 – $1,000 (depending on the license type).
  • Security Guard Licenses: If your company employs security guards, they must be licensed in Colorado. This typically involves completing a state-approved training program, passing a background check, and paying a licensing fee.
  • Firearms Permit: If your company provides armed security services, you and your employees must obtain firearms permits. The requirements for obtaining a firearms permit in Colorado may include completing a training course, passing a background check, and paying a fee.
  • Business License: Colorado may require a Business License. The business license fee in Colorado ranges from $50 – $300.

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Step 6: Get Insured

Insurance is crucial to starting a security company in Colorado. You’ll need to obtain various types of insurance to protect your business and employees, including:

  • General Liability Insurance: To protect your company from claims of bodily injury, property damage, and personal injury resulting from your services.
  • Workers’ Compensation Insurance: To cover medical expenses and lost wages for employees who are injured on the job.
  • Professional Liability Insurance: To protect your company from claims of negligence or failure to perform professional duties.
  • Commercial Auto Insurance: If your company uses vehicles for business, you’ll need commercial auto insurance to cover accidents or damage.

You can apply for Colorado Business Insurance for your Colorado security company. 

Step 7: Hire and Train Employees

Hiring and training qualified employees is essential for the success of your security company in Colorado. When hiring security guards, look for individuals with previous security experience, military or law enforcement backgrounds, and strong communication skills.

Once you’ve hired your employees, you must provide them with the necessary training to perform their duties effectively. This may include state-approved security guard training programs, firearms training, specialized first aid, crisis management, and customer service courses. In addition, before hiring and training employees for your Colorado security company, you must obtain an EIN with the Internal Revenue Service.

Step 8: Invest in Equipment and Technology

Your Colorado company must invest in high-quality equipment and technology to provide top-notch security services. Some essential equipment for a security company in Colorado includes:

  • Uniforms and badges for your security guards
  • Firearms and non-lethal weapons (e.g., pepper spray, stun guns)
  • Security vehicles
  • Surveillance cameras and alarm systems
  • Communication devices, such as radios or smartphones
  • Computer hardware and software for managing your business operations

Step 9: Market Your Security Company

Effective marketing is essential for attracting clients and growing your security company in Colorado. Some marketing strategies include creating a professional website to showcase your services and expertise; printing and distributing business cards, brochures, and flyers; advertising online, in local newspapers, and on radio or television; offering discounts or promotions to attract new clients; networking with local business owners and community organizations; and participating in trade shows and industry events.

Step 10: Provide Excellent Customer Service

Providing excellent customer service is crucial for the success of your security company in Colorado. Strive to meet or exceed your client’s expectations by providing high-quality security services, addressing their concerns promptly, and maintaining open communication. You’ll build a strong reputation and encourage repeat business and referrals by consistently delivering exceptional customer service.

FAQs

How do I start a security company in Colorado?
To start a security company in Colorado, you must obtain a license from the state’s Private Investigation and Security Advisory Board.
What are the requirements to obtain a security company license in Colorado?
To obtain a security company license in Colorado, you must meet the board’s minimum qualifications for experience, education, and training.
How much does it cost to get a security company license in Colorado?
The application fee for a security company license in Colorado is $700.
What liability insurance do I need for my security company in Colorado?
In Colorado, the required minimum amount of liability insurance for security companies is $1 million.
What types of security services can I offer in Colorado?
Security companies in Colorado can offer a variety of services, including armed and unarmed security, security assessments, VIP protection, and event security.
Do I need to have a business plan to start a security company in Colorado?
Yes, having a business plan is a critical aspect of starting a security company in Colorado. It should outline your goals, target market, competition, staffing, and finances.
Can I operate a security company out of my home in Colorado?
No, security companies in Colorado are required to have a physical office with a posted address.
Can I hire security guards who do not have a license in Colorado?
No, all security guards in Colorado must be licensed by the Private Investigation and Security Advisory Board.
What is the hourly rate for security guards in Colorado?
The hourly rate for security guards in Colorado varies depending on the region and experience level, but ranges from $12 to $25 per hour.
How can I attract clients for my security company in Colorado?
You can attract clients for your security company in Colorado by networking with businesses and community members, advertising your services, offering competitive pricing, and providing excellent customer service.
How can I compete with other security companies in Colorado?
You can stand out from other security companies in Colorado by offering unique services, exceptional training of your security guards, competitive pricing, outstanding customer service, and building strong relationships with clients.
Do I need a background check to start a security company in Colorado?
Yes, all company owners, managers, and other key personnel must undergo a background check to receive a security company license in Colorado.
Can I carry a firearm as a private security guard in Colorado?
Yes, if you are an armed security guard in Colorado, you must have a concealed weapons permit, complete proper firearms training, and have a liability insurance policy in place.
Is professional security guard training required in Colorado?
Yes, all security guards in Colorado must complete a training program approved by the Private Investigation and Security Advisory Board.
Can my security company work with the government in Colorado?
Yes, security companies can work with the government to provide security services at government facilities in Colorado.
What is the process to renew my security company license in Colorado?
You must renew your security company license every two years in Colorado. To do so, you must complete an online application and pay the state’s renewal fee.
What are the consequences of operating an unlicensed security company in Colorado?
Operating an unlicensed security company in Colorado is a punishable offense and can result in fines and legal consequences.
How can I expand my security company in Colorado?
Expanding your security company in Colorado may involve reaching out to other cities, offering additional services, and hiring and training more securityguards.
Do I need to maintain records for my security company in Colorado?
Yes, Colorado law requires security companies to maintain accurate records of client engagements, employee training and credentials, and financial transactions.
What is the average time it takes to get a security company license in Colorado?
The processing time for a security company license varies by state, but in Colorado, it usually takes between two and six months.
Can out-of-state security companies operate in Colorado?
Yes, out-of-state security companies can apply for licensing in Colorado to offer their services.
How can I stay up-to-date on regulations and laws regarding security companies in Colorado?
You can stay current on security company regulations and laws in Colorado by regularly checking the Private Investigation and Security Advisory Board’s website, attending industry events, and networking with other security business owners.
Do I need to have a certain amount of experience to start a security company in Colorado?
Yes, in Colorado, security company owners must have previous experience in the security industry.
Can police officers operate their private security businesses in Colorado?
Many police officers have private security businesses in Colorado, but there are potential conflicts of interest that they must be aware of.
Can former felons operate a security company in Colorado?
It depends on the nature of the offense. In Colorado, the Private Investigation and Security Advisory Board look at each person’s criminal history to determine eligibility for a security company license.
Do security companies in Colorado need to supply their own equipment?
Yes, security companies in Colorado are responsible for providing equipment such as uniforms, vehicles, radios, custom-identified coding, badges, and more.
Can I subcontract work to other security companies in Colorado?
Yes, licensed security companies in Colorado can subcontract services or work with other security companies to provide more substantial contracts.
Can I advertise my security company in Colorado on social media?
Yes, social media advertising is an affordable and effective way to promote your security business in Colorado.
What types of ID can Colorado security guards accept for detection of age verification?
Colorado law only recognizes Colorado driver’s licenses, Colorado DMV identification cards, military identifications, passports, tribal identification, Mexican Consulate ID cards, and permanent resident cards.
What kind of licensing is required to start a security company in Colorado?
In Colorado, you need to obtain a private security employer license before starting a security company.
Do I need to have experience in the security industry to start a security company in Colorado?
While experience in the industry can be helpful, it is not a requirement to start a security company in Colorado.
How do I register my security company in Colorado?
You can register your security company in Colorado by completing the necessary paperwork and paying the applicable fees with the Colorado Secretary of State.
Are there any specific insurance requirements for starting a security company in Colorado?
Yes, security companies in Colorado are generally required to carry certain types of liability insurance.
Do I need to have a physical office to start a security company in Colorado?
It is not a requirement to have a physical office to start a security company in Colorado, but you will need a mailing address to register your business.
Is there a minimum age requirement to start a security company in Colorado?
Yes, you must be at least 18 years old to obtain a private security employer license in Colorado.
Are there any ongoing training requirements for security company employees in Colorado?
Yes, employees of Colorado security companies are required to complete ongoing training to maintain their certification.
What types of security services are most in-demand in Colorado?
There is a high demand for security services in various industries, including retail, hospitality, and healthcare.
How can I make my security company stand out in Colorado?
Offering exceptional customer service and customized security solutions can help your security company stand out in a competitive market like Colorado.
What types of technology should my security company invest in?
To stay competitive in the Colorado security market, it may be worth considering investing in advanced security technology like facial recognition or asset tracking.
Can I hire former law enforcement officers as security guards for my company in Colorado?
Yes, you can hire former law enforcement officers to work as security guards for your company in Colorado.
How important is meeting regulatory compliance for a security company in Colorado?
It is crucial for a security company to meet regulatory compliance and remain in good standing with the state of Colorado.
Is it possible to operate a security company in Colorado from out of state?
It is possible to operate a security company in Colorado from out of state, but you will still need to meet all Colorado-specific licensing and regulatory requirements.
Are there any resources available to help me start a security company in Colorado?
The Small Business Administration and the Colorado Secretary of State website offer resources and guidance for starting a security company in Colorado.
How long does it typically take to start a security company in Colorado?
The timeline for starting a security company in Colorado will depend on various factors, including the completion of required training, obtaining necessary licenses, and securing funding.
How can I find clients for my Colorado security company?
Networking within your industry and showcasing your company’s experience and expertise will help attract new clients to your Colorado security company.
Can I operate under a trade name in Colorado for my security company?
Yes, you can operate your security company under a trade name in Colorado as long as the name is registered with the state.
How can I protect my security company from liability in Colorado?
By carrying the necessary insurance and meeting all regulatory compliance requirements, you can help minimize potential liability for your Colorado security company.
Are there any tax benefits for starting a security company in Colorado?
Colorado does offer certain tax incentives for new businesses, which could be beneficial when starting a security company.
What kinds of background checks are required for security company employees in Colorado?
Employees of security companies in Colorado are required to undergo fingerprinting and a criminal background check.
Do I need to create a business plan before starting a security company in Colorado?
While not mandatory, creating a solid business plan can help guide the success and growth of your Colorado security company.
How much startup capital do I need to begin a security company in Colorado?
The amount of startup capital required will depend on factors such as the size of your company and the equipment and technology necessary to operate.
Is it possible to franchise a security company in Colorado?
Yes, it is possible to franchise a security company in Colorado as long as all necessary regulatory requirements are met.
What sets Colorado’s security industry apart from other states?
Colorado’s unique mountains and various industries, including agriculture and technology, create a prime market for security services that differ from other states.
Can I hire security guards from staffing agencies for my Colorado security company?
Yes, staffing agencies often provide trained and certified security guards that can be hired for your Colorado security company.
Are there any grants available for starting a security company in Colorado?
There are various grant opportunities in Colorado for small businesses, including those starting in the security industry.
How involved should I be in the daily operations of my Colorado security company?
Being actively involved in the daily operations can help ensure your Colorado security company is successful and meet compliance requirements.
Can I use my experience as a security guard to start a security company in Colorado?
Yes, having prior experience as a security guard can provide valuable knowledge and help get the business up and running.
Can I start a Colorado security company with a partner?
Yes, starting a security company in Colorado with a partner can help provide additional resources and expertise.
What are some common mistakes to avoid when starting a security company in Colorado?
Failing to meet regulatory requirements, underestimating costs, and limited market research are some common mistakes to avoid when starting a security company in Colorado.

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Conclusion

Starting a security company in Colorado can be rewarding and profitable. By following the steps outlined in this guide, you’ll be well on your way to establishing a successful security business in your area. Remember to be patient and persistent, as building your client base and reputation may take time. Your security company can thrive in the competitive Colorado market with dedication and hard work.

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