At a glance
Can a Kansas guard company open with $100,000?
Yes – under a disciplined founder-scale configuration. This statewide planning model assumes an independent Kansas LLC providing only unarmed contract guard and patrol services, with ten guards on the roster, one used patrol vehicle, remote-first administration, and practical capacity of 1,600 regular billable guard-hours per month. The owner handles sales, scheduling, quality control and administration but does not routinely fill billable guard shifts.
The pricing model is cost-up, not a claimed statewide market quote. Kansas Security Guards had a May 2025 statewide median wage of $17.83 per hour; this plan pays $19.25, an 8% recruiting premium, then layers statutory payroll costs, coverage relief and a modeled workers' compensation allowance. The wage source is the U.S. Department of Labor-sponsored CareerOneStop 2025 Kansas wage table.
Startup scope
Payroll float – not gear – sets the Kansas startup budget
A guard company can look inexpensive because it has little inventory and no production build-out. That is misleading. Employees may be paid weekly or biweekly while commercial clients pay on 30-day terms. A founder therefore finances wages, payroll taxes, insurance and fixed overhead before the first meaningful client cash arrives.
| Use of funds | Lean | Typical | Premium |
|---|---|---|---|
| Entity, local compliance & professional setup | $2,500 | $4,000 | $6,000 |
| Insurance deposits / initial premiums | $6,000 | $8,000 | $12,000 |
| Patrol vehicle and upfit | $10,000 | $19,500 | $32,000 |
| Uniforms, duty gear & radios | $4,000 | $5,500 | $8,000 |
| Scheduling tech & remote-admin setup | $1,500 | $3,000 | $6,000 |
| Recruiting, screening, training & pre-opening payroll | $4,000 | $6,000 | $9,000 |
| Branding, site & launch selling | $1,500 | $2,500 | $5,000 |
| Initial net working capital | $1,000 | $1,500 | $2,000 |
| Opening operating-cash reserve | $43,000 | $45,000 | $60,000 |
| Contingency | $3,500 | $5,000 | $8,000 |
| Total project cost / founder cash required | $77,000 | $100,000 | $148,000 |
The Typical $100,000 is also the modeled founder cash requirement because no committed debt, equipment financing, grant or reimbursement is assumed. A lender-funded vehicle could reduce permanent equity, but it would add debt-service break-even and should be subtracted only after a real approval and draw schedule exist. The $1,500 initial net working capital is limited to prepaids and timing items; there is no opening inventory and no separate refundable deposit assumed. The $8,000 insurance line is treated as pre-opening cash, not as refundable collateral; actual carrier deposit/refund terms require a quote. The $45,000 operating-cash reserve is separate unrestricted cash, not a duplicate “working capital” bucket.
Typical sources-and-uses bridge
$28,000 vehicle/gear/technology setup + $12,500 compliance, recruiting and launch expense + $8,000 insurance opening cash + $1,500 initial NWC + $45,000 operating-cash reserve + $5,000 contingency = $100,000 total project cost.
Committed debt, equipment financing, landlord allowances, grants and reimbursements are $0 in the Base financing case, so founder cash required and peak interim founder cash are both $100,000. These are planning-use classifications, not tax-capitalization conclusions.
Text alternative: the ten startup uses sum to $100,000; the $45,000 operating-cash reserve is the largest component.
Launch path
The critical path is local clearance, insurance and hiring
Do not treat the launch as a generic entity-formation checklist. The business can form its LLC and obtain an EIN quickly, but it cannot responsibly promise guard coverage until its local firm/guard licensing, insurance, background screening, staffing and client post orders line up.
LLC, EIN, bank, payroll and Kansas employer accounts.
Confirm city/county firm and officer rules before signing a lease or client.
Workers' comp, liability and commercial auto must match contract requirements.
Backgrounds, drug screens, local permits and training can overlap.
Finalize post orders, scheduling, reporting, uniforms and escalation contacts.
| Deliverable | Prerequisite | Authority / owner | Planning time | Fee / critical gate |
|---|---|---|---|---|
| Kansas LLC | Business name / registered agent | Kansas Secretary of State | Filing time: confirm at portal | $75 articles fee + current filing-service fees |
| EIN and banking | Entity formed | IRS / bank | IRS online EIN can be issued in minutes | EIN: $0; bank underwriting varies |
| Employer accounts | EIN / hiring plan | Kansas DOL / Revenue | Not published as one statewide SLA | Register before payroll and withholding filings |
| Local firm / guard permissions | Final operating jurisdiction and roster | Varies by city/county | Modeled 2 – 6 weeks; verify locally | Varies by jurisdiction; may require screening, permits and training |
| Insurance binding | Services, payroll, vehicle and contract limits | Carrier / broker | Modeled 1 – 3 weeks | Local quote required; do not start uninsured |
| Guard hiring and clearance | Job standards / permit rules | Employer + local authority | Modeled 2 – 5 weeks, partly parallel | Background, drug screen, permit and training costs vary |
| Client mobilization | Cleared roster + insurance + signed scope | Founder / client | Modeled 1 – 2 weeks | Post orders, reporting and payroll float must be ready |
Kansas LLC economics changed in 2026. The Secretary of State's permanent regulation lists a $75 application and recording fee for domestic LLC articles of organization, effective February 27, 2026, while the same fee regulation shows online biennial-report service components. Use the live filing portal for the exact checkout total. See the Kansas Secretary of State 2026 fee regulation. The IRS says an EIN is free and eligible online applicants can receive it in minutes; see IRS EIN guidance.
Licensing and employment
Kansas separates private patrol from detective licensing
The canonical company is deliberately narrow. It sells guard and patrol coverage, not private investigations, detective work, alarm installation or armed executive protection. That matters because the Kansas private-detective statute expressly exempts a “private patrol operator” while actually providing private patrol services on the property being protected. If the business adds investigative services, the analysis changes and the Kansas Attorney General's private detective licensing rules should be reviewed before selling the service.
Pure private patrol is outside the state detective-license requirement while the operator is actually providing patrol service on the protected property. This does not erase local licensing.
Kansas generally requires non-agricultural employers above $20,000 gross annual payroll to secure workers' compensation coverage. This model is far above that threshold.
Kansas lists a 1.75% new-employer unemployment rate on a $15,100 taxable wage base for 2026; experienced-employer rates vary.
The workers' compensation rule comes from the Kansas Department of Labor. The same department's 2026 Employer Services rate table supplies the unemployment assumptions. Federal payroll cost also matters: 2026 employer Social Security is 6.2% and employer Medicare is 1.45%, according to IRS Publication 15. This model keeps those statutory amounts separate from the insurance and coverage-relief allowances.
Local variation and address checks
These examples prove why a statewide article cannot average local law into a fictional Kansas permit. They are not the Base case. Confirm the company's business address and every jurisdiction where guards will work before quoting a client.
| Jurisdiction | Firm requirement | Guard requirement | Current evidence / check |
|---|---|---|---|
| Wichita | City private-security-agency ordinance applies; current firm fee should be confirmed | $50 city fee + $57 KBI CHR fee for a new applicant; annual permit, $40 renewal | Intent letter, drug screen and temporary permit process published by city |
| Kansas City, Kansas | Guard applicant must present a letter from a licensed security company; verify current firm license separately | Published police page lists $52 applicant fee and background review | Local ordinance/process; confirm current company licensing before mobilization |
| Topeka | 2026 fee schedule lists private security firm license at $300 and renewal at $100 | 2026 schedule proposes $40 new / $30 renewal versus prior $30 / $25 | Confirm which proposed fee is in force when applying |
Primary local sources: City private-security applicant page, police security-guard permit page, and 2026 municipal fee schedule. Local fees are shown as examples, not averaged into statewide law.
Operating economics
At 1,440 billed guard-hours, Base revenue is $51,120 a month
Revenue is built from the natural unit: a billed guard-hour. The Base case charges $35.50 per hour and sells 1,440 hours per month, or 90% of the 1,600-hour regular-capacity band. Downside uses 1,050 hours at $33.50; Upside uses 1,560 at $37.00. None of the cases exceeds the stated capacity.
Base revenue formula
1,440 billed guard-hours × $35.50 net service revenue per hour = $51,120 per month = $613,440 annualized.
“Revenue” here excludes sales/use tax collected for the state and assumes normal credits are already netted. Kansas tax guidance lists security among services that do not involve taxable tangible-property work; the company should keep separately sold/rented equipment or installation work out of this pure-guard contract because those streams can have different tax treatment. See the Kansas Department of Revenue service examples and its Security Companies and Systems guide.
| Metric | Downside | Base | Upside |
|---|---|---|---|
| Billed hours | 1,050 | 1,440 | 1,560 |
| Capacity utilization | 65.6% | 90.0% | 97.5% |
| Net bill rate / hour | $33.50 | $35.50 | $37.00 |
| Revenue | $35,175 | $51,120 | $57,720 |
| Variable guard-service cost | $25,305 | $34,704 | $37,596 |
| Passive-basis contribution | $9,870 | $16,416 | $20,124 |
| Fixed non-owner cash costs | $6,150 | $6,150 | $6,150 |
| Fixed owner-replacement labor | $6,500 | $6,500 | $6,500 |
| Normalized passive-owner cash operating profit | – $2,780 | $3,766 | $7,474 |
| Working-owner pre-tax business cash benefit | $3,720 | $10,266 | $13,974 |
Text alternative: Base revenue is 45.3% above Downside, while Upside is 12.9% above Base.
Cost structure
One guard-hour costs $24.10 before fixed overhead
The model starts with a $19.25 wage – not the statutory minimum wage – because dependable staffing is a commercial constraint. The 2025 Kansas median is $17.83, while this plan pays above that benchmark. Per billed hour, it then adds $1.47 employer FICA, $0.18 modeled Kansas UI/FUTA, $1.45 for paid relief/training coverage, $1.30 for workers' compensation risk, and $0.45 for uniforms, reporting and small consumables. Those planning allowances total $24.10.
| Unit bridge | Per hour |
|---|---|
| Net client bill rate | $35.50 |
| Guard cash wage | – $19.25 |
| Employer FICA | – $1.47 |
| Kansas UI + FUTA planning allowance | – $0.18 |
| Relief / paid training allowance | – $1.45 |
| Workers' compensation planning allowance | – $1.30 |
| Uniform / reporting consumables | – $0.45 |
| Passive/economic contribution per billed hour | $11.40 |
The $11.40 contribution is 32.1% of Base revenue. It does not absorb rent, general liability, marketing, accounting or owner-management replacement labor; those belong in the fixed-cost numerator for break-even. Because the founder is not assumed to work billable guard posts, there is no variable owner-replacement labor to add back at unit level. If the founder routinely fills posts, the model must move the relevant owner labor into unit contribution instead of pretending those hours are free.
Variable guard-service cost at 1,440 billed hours. Of this, $27,720 is cash wages; the rest is payroll burden, relief, workers' comp allowance and consumables.
$1,650 non-WC insurance, $900 remote-admin/facility, $650 vehicle fixed operations, $750 software/phones, $900 sales, $450 professional/compliance, $500 recruiting/training and $350 banking/miscellaneous.
Security-class workers' comp and liability can move materially with guard duties, claims, contract limits and vehicle use. The $1.30/hour WC and $1,650/month non-WC allowances are modeled – not published Kansas rates. Bind quotes before accepting a low-margin contract.
Two cost lines can break the Base case fastest. First is wage pressure: every $1.00 increase in direct hourly cost across 1,440 hours reduces monthly cash by $1,440 unless billing rises. Second is insurance: a $1,000 monthly adverse quote directly cuts the $3,766 passive profit to $2,766. Client contracts should therefore include sensible price-review language and should not lock multi-year rates before labor and insurance renewals are understood.
Owner economics
The owner's labor is worth more than the residual profit
A working owner and a passive owner do not own the same economic job. In the Base case, the business has $10,266 per month left after guard-service costs and non-owner fixed cash overhead. A passive owner must replace the founder's sales, scheduling, administration and quality-control labor. The model values that role at $6,500 fully loaded per month – $5,200 cash wage plus a 25% modeled employer burden – leaving $3,766 residual business profit.
Economic compensation for management work. It is not an owner draw and it is not a guaranteed salary to the founder.
Normalized cash operating profit after replacement labor. D&A is not reliably modeled, so this article does not label the result EBIT or EBITDA.
Replacement labor avoided + residual profit. Annualized: $123,192 before maintenance capex, debt service and owner income taxes.
Base owner bridge
$51,120 revenue – $34,704 variable guard-service cost – $6,150 fixed non-owner cash cost = $10,266 working-owner pre-tax business cash benefit.
$10,266 – $6,500 fixed replacement-manager labor = $3,766 normalized passive-owner cash operating profit before D&A.
A $450 monthly maintenance-capex reserve for vehicle, radios and equipment reduces stabilized working-owner cash potentially available to $9,816 before tax. No debt service is modeled, and no personal income-tax reserve is presented because the founder's entity election, household situation and tax attributes are not known. An owner draw or distribution is a financing/equity movement, not an operating expense. The $100,000 opening case is owner-operated: hiring the $6,500 replacement manager from month 1 would consume roughly another $26,000 through the four-month ramp, so a passive-from-day-one launch needs a larger reserve or separately committed financing.
Break-even and cash
Passive break-even is about 1,110 guard-hours a month
Break-even changes with the ownership basis. The Base bill rate is $35.50, variable cost is $24.10 and contribution is $11.40 per billed hour. That 32.1% contribution margin is used consistently below. The company's 1,600-hour capacity is adequate, but only if the roster is actually scheduled and clients pay on time.
| Measure | Numerator / basis | Revenue | Billed hours |
|---|---|---|---|
| Cash-survival break-even | $6,150 fixed non-owner cash costs | $19,151 | 539 |
| Sustainable working-owner break-even | $6,150 fixed + $5,000 target owner compensation | $34,721 | 978 |
| Passive-owner break-even | $6,150 fixed + $6,500 replacement manager | $39,393 | 1,110 |
| Base stabilized cash after maintenance capex | Working-owner, pre-tax, no debt | $9,816 cash/mo. | 1,440 |
| Founder-equity payback | $100,000 month-0 founder contribution; no distributions months 1 – 4 | Month 15 | Working-owner basis |
Text alternative: passive break-even is 1,110 hours versus 1,600 hours of capacity; Base volume is 1,440 hours.
The payback result uses owner cash flows, not the shortcut of project cost divided by accounting profit. The founder contributes $100,000 at month 0. The $45,000 cash reserve is already part of that contribution, so ramp losses funded from it are not counted as a second equity injection. The model makes no owner distributions in months 1 – 4; from month 5 onward, it distributes up to $9,816 per month while preserving at least the modeled cash floor. Cumulative founder cash crosses zero in month 15 in Base, month 35 in Downside and month 12 in Upside under the same no-debt, working-owner logic.
Kansas market context
A statewide revenue TAM is not publicly clean enough to quote
A reliable Kansas market-revenue amount for six-digit NAICS 561612 is not publicly determinable from the readily available category tables used here. The U.S. Census Bureau's 2023 Annual Integrated Economic Survey reports $40.659 billion of U.S. employer-firm revenue for Security Guards and Patrol Services, but that national total should not be multiplied by Kansas population share and mislabeled a measured state market. See Census AIES NAICS 561612.
Kansas statewide median guard wage in May 2025. The model pays $19.25 to improve recruiting odds.
2023 U.S. employer-firm revenue for NAICS 561612. It is not a Kansas TAM and is not used to set this company's sales plan.
The decision-relevant market test is whether reachable Kansas clients can support this capacity-constrained monthly book at roughly $35.50 net per hour.
The U.S. Census definition for NAICS 561612 is also useful for keeping the concept comparable across states: establishments primarily provide guard and patrol services. Security-system installation belongs elsewhere. That boundary protects the model from silently mixing labor-heavy guarding with equipment-heavy alarm work.
Financial line: variable guard cost. Early KPI: qualified applicants per opening and overtime hours. A $1/hour direct-cost miss is about $1,440/month at Base volume.
Financial line: billed hours and receivables. Early KPI: largest client as % of hours and days sales outstanding. Losing one 400-hour post can push the company toward passive break-even.
Financial line: WC and liability. Early KPI: claims frequency and renewal indication. Obtain quotes by service type; do not price higher-risk posts with a generic margin.
Financial line: launch delay and compliance cost. Early KPI: cleared guards / scheduled guards by jurisdiction. A signed client does not override local officer requirements.
Financial line: operating-cash reserve. Early KPI: DSO and payroll weeks funded. Extend terms only after testing the cash schedule.
Before committing capital, validate the actual customer set rather than a broad TAM: industrial sites, construction projects, health facilities, multifamily properties, events, distribution operations and institutions that outsource security. Ask for requested hours, shift pattern, post duties, insurance limits, billing terms, cancellation clauses and expected start date. Those facts move the model more than a statewide population statistic.
Sources and method
What is official, modeled and still needs a quote
Research was reviewed August 27, 2026. Dollar outputs use 2026 planning dollars unless the source period is stated. The canonical configuration remains one independent unarmed Kansas guard-and-patrol LLC with ten guards, one vehicle, no public storefront and 1,600 monthly regular billable hours. Statewide wage data is used directly; local licensing examples are kept local and are not averaged into Kansas law.
| Source / publisher | Geography / period | Evidence type | How used |
|---|---|---|---|
| Kansas Legislature, K.S.A. 75-7b03 | Kansas / current 2026 statutes | Official fee or rule | Defines the private-patrol exemption from the detective act |
| Kansas Secretary of State fee regulation | Kansas / effective Feb. 27, 2026 | Official fee or rule | $75 LLC articles fee; filing-service context |
| CareerOneStop / BLS OEWS | Kansas / May 2025 | Reported government data | $17.83 statewide median; $19.25 modeled recruiting wage |
| Kansas DOL Employer Services | Kansas / 2026 | Official fee or rule | 1.75% new-employer UI; $15,100 wage base |
| Kansas DOL Workers Compensation | Kansas / current | Official fee or rule | Coverage trigger; premium itself remains quote-required |
| IRS Publication 15 | U.S. / 2026 | Official fee or rule | Employer Social Security and Medicare rates |
| Kansas Department of Revenue publications | Kansas / current guidance | Official fee or rule | Pure security-service taxability context; equipment treated separately |
| Three local authority examples | Three Kansas jurisdictions / 2026 review | Official fee or rule | Shows local firm/guard permit variability; no statewide averaging |
| U.S. Census AIES | U.S. / 2023 | Reported government data | $40.659B national context; not converted into Kansas TAM |
| Financial model assumptions | Kansas statewide / 2026 planning basis | Derived calculation + modeled planning assumption | Bill rates, insurance allowances, overhead, ramp, reserve and owner-replacement labor |
Evidence quality is highest for the patrol-law exemption, LLC fee, payroll tax rules, UI parameters, workers' compensation obligation and statewide wage series because those are direct government sources. It is moderate-to-low for the $35.50 billing rate, insurance allowances, vehicle budget, overhead and replacement-manager burden because those are planning assumptions rather than observed Kansas averages. The largest uncertainty is insurance plus the exact local permit stack at the eventual address and client sites.