Private Military Companies (PMC) provide security and military services by taking over certain tasks, usually covered by regular forces based on Governmental and/or private contracts. Note that the services and expertise offered by these companies are more or less similar to those of governmental security, military, or police forces, but on a smaller scale.
Note that it is difficult to obtain data about private military companies and contractors in the United States, due to proprietary business secrets. Although these companies serve as proxies of the state, they are not legally allowed to share information with the public on their actions, organization, or labor force.
Nevertheless, the industry is worth over $100 billion and has grown exponentially, especially after the September 11, 2001 attacks, thanks to their concrete relations with political establishments.
Steps on How to Start a Private Military Company in 2022
Table of Content
1. Conduct Market Research
When looking to start and run a private military company in the United States, you must perform thorough research into the requirements you need before starting your business. Have it in mind that this is a risky industry, and so many things could go wrong owing to inadequate planning and information. Owing to that, it is critical to be prepared and to thoroughly research and evaluate your insurance policies to ensure that you’re fully covered and protected.
a. Target Audience for a Private Military Company?
The ideal target audience or those that require the military services and expertise of a private military company cuts across numerous industries and sectors including;
- Multi-National Corporations
- Oil Companies
- International Organizations
- Humanitarian agencies
- Non-Governmental organizations
- The United Nations
b. Is a Private Military Company a Profitable Business?
Yes, private military companies are very profitable business organizations that trade in professional services complicatedly linked to warfare. According to recent reports, these companies have grown constitutionally, into the security landscape of many countries, whether these are rich or poor.
c. Are There Existing Niches in the Industry?
Yes, there are existing niches to consider when starting this business. Before starting a private military company, it is necessary to consider the type of security you want to provide. Agreeably, it might be tempting to offer numerous services to appeal to different clients, however, note that this strategy can backfire if you’re not truly equipped to fulfill each service type. Nonetheless, here are niches in this business to consider.
- Facility guarding (no arms)
- Physical security services
- Security Consultants
- Security training
- Risk and threat analysis
- Information services
- Facility guarding (armed)
- Fixed security services
- Mobil armed escort
d. Who are the Major Competitors?
- Boughton Protection Services/BPS
- Custer Battles
- Defion Internacional
- GlobalEnforce, Inc.
- IANO Group Inc
- ITT Corporation
- MPRI, Inc.
- MTCSC, Inc.
- MVM, Inc.
- Northbridge Services Group
- Northrop Grumman
- Obelisk, International LLC
- Pathfinder Security Services
e. Are There County or State Regulations or Zoning Laws for Private Military Companies?
Yes, in the United States, private military companies are generally licensed (as businesses), registered, and regulated (in their domestic operations) mainly under state and/or local law rather than federal law. Have it in mind there is no comprehensive federal-level legal regime for the basic regulation of private military companies and their activities.
Although a well-detailed web of federal statutes, regulations, and other federal agency requirements – primarily those established and promulgated by the Department of Defense (DoD) – does offer complex, although still incomplete, legal structure covering vast aspects of private military company procurement, oversight, and accountability
f. Is There a Franchise for Private Military Business?
No, there are no private military franchise opportunities anywhere in the world. The private military industry is strictly regulated, and although these companies serve as proxies of the state, they are not legally allowed to share information with the public on their actions, organization, or labor force.
g. What Do You Need to Start a Private Military Company?
- Adequate licensing
- A detailed business plan
- Equipment like radios, flashlights, guns, and all other necessary security gadgets
- Uniforms and gear
- Office furniture and supplies
- Website development
- Patrol vehicles
- Private soldiers
Choose a Memorable Business Name
- Peace Squad
- Core Balance
- MaxWeapon LLC
- AlS Squanter
- Team Saviour
- Far Coast
- Link Power Inc.
- Forward Eagle
- Absolute Power
- Vanguard Troops
- 12 Cyclones
- Body Pad
- Victory Foxtrot
- Purebred LLC
- Easter Royal
- Elite Squad
- Weapons and Experts
- Grey Energy
- King’s Men
Register your Business
a. What Type of Business Structure is Best for Private Military Company?
Just like any other business, private military companies are registered businesses with corporate structures. They also vary massively in size, ranging from small consulting firms to huge Transnational Corporations. Regardless of the size of your private military company, an LLC is the most suitable, especially owing to the limited liability protection it offers.
You can start your private military company as a limited liability company (LLC) and maybe convert it to a ‘C’ corporation or even an ‘S’ Corporations in the future that’s if you have the plans of going public. Converting to a ‘C’ corporation or ‘S’ corporation will give you the platform to grow your private military company, generate capital from venture capital firms, stock market, enjoy a separate tax structure, and also easily transfer ownership of the company; easily.
b. List Steps to Form an LLC
- Choose a Name for Your LLC.
- File Articles of Organization.
- Choose a registered agent.
- Decide on member vs. manager management.
- Create an LLC operating agreement.
- Comply with other tax and regulatory requirements.
- File annual reports.
c. What Type of License is Needed to Open a Private Military Company?
- General Business License
- Business Insurance
- Federal Firearms License
- Health and Safety Permit
- Operational State Facility Inspections (If you have an office)
- State Department approvals
d. What Type of Certification is Needed to Open a Private Military Company?
Although not mandatory when starting or opening a private military company, here are top industry certifications to consider;
- Security 5 Certification
- First Aid, CPR, and AED Instructor
- Private Security Professionals of America Certifications
- Certified Protection Officer Instructors
- Certified in Security Supervision and Management (CSSM)
- International Foundation for Protection Officers (IFPO) Certification
e. What Documents are Needed to Open a Private Military Company?
Truth be told, this will depend on your business location and business structure. Nonetheless, basic documents you need to open a private military company in the United States include;
- Employment Contracts
- Operating Agreement
- Memorandum of Understanding (MoU)
- Company Bylaws
- Business Plan
- Non – disclosure Agreement
- Insurance Policy
f. Do You Need a Trademark, Copyright, or Patent?
Aside from your business name, logo, and other unique materials relating to your business, there would be no need to file for a trademark, copy or patent, unless you decide along the line to invest in security technologies and software. Nonetheless, if you want to file for intellectual property protection and also register your trademark in the United States, simply start the process by applying with the USPTO.
Do your Cost Analysis and Budgeting
a. How Much Does It Cost to Start a Private Military Company?
This will genuinely vary from at least $170,000 to countless billions of dollars, depending on your business size, services, and contracts you intend to execute. As a top contractor with government agencies or multinational companies, you’ll need to make huge investments in equipment and other military hard gear. Consider the fact that you’re building a private army.
This army will have to be well fitted, strong, and reliable enough (militarily) to go into battle. For some private military companies, these investments include planes, helicopters, light arms. So, the cost of starting a private military company will surely depend on your business size and the sort of military service you intend to offer.
b. What are the Cost Involved?
- The Total cost of incorporating the Business in the United States of America – $1,250.
- The cost of insurance, permits, and license – $150,000
- The cost of renting a suitable office facility with enough space(Re-Construction of the facility inclusive) – $94,000.
- The Cost for equipping the office (computers, printers, fax machines, furniture, telephones, filing cabins, safety gadgets and electronics et al) – $220,000
- The cost for acquiring military equipment, gadgets, accessories, and uniforms – $4.9 million
- The Cost of Launching an official Website – $700
- Other miscellaneous – $200,000
c. What Factors Determine the Cost of Opening a Private Military Company?
- Business Niche
- The Choice of Location
- The Required Licenses and Permits
- The Size of Facility
- Grade of Technology and Equipment
- The Cost of Hiring and Paying a Business Consultant and Attorney
- The Cost of Furnishing and Equipping the Private Military Company Facility
- The Cost for Insurance Policy Covers
- Cost of Recruiting and Training Your Staff and Soldiers
d. Do You Need to Build a Facility?
Yes, you will need office space to handle business dealings and also store equipment. Note that the cost per square foot on a private military facility will vary massively from one project to another. This is quite true when you compare the costs of commercial projects in different areas of the country, as well as the types of commercial buildings.
However, expect to spend $238–$286 per square foot to build a single-story commercial office building, $569 on the high end and $474 on the low end to build a mid-rise building, and around $545–$654 per square foot for a high rise building.
e. What are the Ongoing Expenses for Running a Private Military Company?
- Facility lease or rent
- Security team’s salaries
- Office employees salaries
- Utility bills
f. What is the Average Salary of your Staff?
- Chief Executive Officer – $115,500/year
- Weapons Engineer – $104,368 /year
- Human Resource Officer – $80,807/year
- Weapons Specialist – $77,279 /year
- Military Contractor – $61,955 /year
- Entry Level Weapons Engineer – $55,828 /year
- Front Desk Staff – $42,190 /year
g. How Do You Get Funding to Start a Private Military Company
- From personal savings and sale of personal stocks and properties
- From investors and business partners
- From the sell shares to interested investors
- Applying for a loan from your bank/banks
- Pitching your business idea and applying for business grants and seed funding from, government, donor organizations, and angel investors
- Soft loans from your family members and your friends.
Write a Business Plan
a. Executive Summary
Owing to the current political climate in the United States, with increasing fears of terrorist activity, and the current economic climate, which promises a massive demand in general and in outsourced services especially, 12 Cyclones is launching at the perfect time.
12 Cyclones intends to provide our clients with an expansive line of armed, unarmed, and technologically advanced security services. Established in Richmond, Virginia, 12 Cyclones will contract ex-military professionals in an armed capacity and well-educated weapon engineers to provide our clients with top-notch services and solutions.
b. Products and Service
- Armed and unarmed security services
- Workforce training
- 3D/Additive Manufacturing
- Cyber security
- Cyber Command
- Unmanned Vehicles
c. Mission Statement
At 12 Cyclones, our mission is to remove worries for clients who require security solutions for their buildings, facilities, and events by making available excellent customer service for clients and in-depth training for their employees.
At 12 Cyclones, our vision is to aggressively expand during the first three years of operation. We also intend to lobby and invest in campaigns that will allow our company to generate contracts from the US Federal Government.
d. Goals and Objectives
At 12 Cyclones, we intend to establish a competitive advantage through high levels of customer service and assurance. We will always strive to be more than just a partner in the security and protection of clients’ assets, with armed guards and security technology as a major tool in that protection. We at 12 Cyclones will also carefully audit a client’s security situation and work with them on plans to upgrade and maintain that security.
e. Organizational Structure
- Chief Executive Officer
- Weapons Engineer
- Human Resource Officer
- Weapons Specialist
- Military Contractor
- Entry Level Weapons Engineer
- Front Desk Staff
a. SWOT Analysis
- Virginia’s Military Bases
- Military Bases’ Proximity to Each Other
- Proximity to Washington, D.C.
- Access to Logistics Infrastructure
- Educated Workforce
- Military Experience
- Zoning and Land Use Regulations
- Worker Shortage
- Lack of Public-Private Partnerships
- Overreliance on DOD
- Access to Capital/Funding
- Workforce training
- 3D/Additive Manufacturing
- Cyber security in Virginia
- Cyber Command Becoming Combatant
- Unmanned Vehicles
- Changes in Virginia Laws
- Aging Workforce
b. How Do Private Military Companies Make Money?
Smaller private military companies that offer simple services will charge clients an hourly rate or flat fee for services. However, bigger companies who have government, corporate or commercial clients tend to sign multi-year service contracts. Howbeit, when starting out, these types of clients can be very difficult to get.
c. Payment Options
- Payment via bank transfer
- Payment via online bank transfer
- Payment via check
- Payment via mobile money transfer
d. Sales & Advertising Strategies
- Create better contract proposals
- Use strong customer value propositions (CVPs) to set yourself apart from the competition.
- Create a blog to offer security tips, news, and company information, sharing news about awards and other company achievements.
- Ensure that our website is up to date and easy to navigate.
- Ask customers to provide testimonials that we can use on our corporate website and in advertising.
- Leverage an advertising firm well renowned in the industry
a. How Much Should You Charge for your product/Service?
This will more or less depend on the services being offered by your private military company. For unarmed security, you can charge around $10 and $25 per hour. For armed security, you can charge from $35 to $100, depending on the complexity of the job and the client involved.
However, note that private military contracts, including both short and long-term contracts, can garner a much enticing total fee for services. A good number of private military companies tend to charge “by the job,” thereby the company is charging a contract fee. These fees can amount to several millions of dollars per contract. Sometimes, a client pays monthly, semi-annually, or annually for services and renews the contract for many years.
b. How Much Profit Do Private Military Company Owners Make a Year?
Have it in mind that reliable and detailed statistics are difficult to find because many private military contractors work for the CIA and every part of their agreements is confidential. Howbeit, most companies earn around $300 and $750 a day per military contractor or between $9,000 and $22,500 per month.
c. What Factors Determine the Amount of Profit to Be Made?
- The size of the private military company
- Business location
- Business management style
- Approach to business and contracts
- The number of years in business
- Contact and network
e. What is the Profit Margin of a Private Military Company?
This will also depend on the size of the company, its potential clients, and the services rendered. However, well-established private military companies can make around $40,000-$60,000 per security guard, per year. Net profits will surely vary depending on insurance costs, labor costs, and regulatory costs in your business location.
f. What is the Sales Forecast?
Note that after the initial investment and launch, a lean first year, and the establishment of a good facility and training space in the second year, the business is expected to expand through its financing after three years.
- First Fiscal Year (FY1): $460,000
- Second Fiscal Year (FY2): $1,340,000
- Third Fiscal Year (FY3): $4,000,000
Set Up your Office
a. How Do You Choose a Perfect Location for a Private Military Company
- Proximity to military bases
- The demand for the services of private military services
- The purchasing power of the location
- Accessibility of the location
- The local laws and regulations in the community/state
- Traffic, parking and security et al
b. What State and City are Best to Open a Private Military Company?
- Colorado Springs, Colorado
- Charleston, South Caroline
- Anchorage, Alaska
- Honolulu, Hawaii
- Tacoma, Washington
- Washington DC.
- Virginia Beach, Virginia
- Pensacola, Florida
c. What Equipment is Needed to Operate?
Note that the niche and services you choose to offer will determine the sort of equipment you need. However, the basic needs of any private military company include;
- Walkie Talkie
- Writing Material
- Digital Camera
- Tool Belt
- Other equipment including; guns, digital display systems, vehicle tracking, CCTVS surveillance, guard dogs, baton, pepper spray, hand gloves, tear gas, etc.
Most often, a private military company will need a team of 3 to 5 security professionals to start. Aside from helping you recover the initial startup costs, it also helps to build a business revenue stream faster, since you can take up more jobs. However, as the company expands and becomes more well-known, you can seek additional employees and contractors as finances allow.
Launch the Business Proper
A private military company can be run on a small or large scale. When starting, it is necessary to partner with local HOAs, landlords, and local businesses to help you secure your initial security contracts and grow from there. However, if you already have the contacts and networks, you can start lobbying for contracts with the DOD.
a. What Makes a Private Military Company Successful?
- Credibility is everything
- Listening carefully to client concerns
- Understanding what the client does not know
- Training staff and contractors carefully and maintaining their training and certifications (e.g. to carry firearms)
- Monitoring the quality of staff and contractors to offer quality assurance
b. What Happens During a Typical Day at a Private Military Company?
For private military companies, a typical day involves arranging security-related documents like incident reports and proposals, strategic or tactical initiatives, and reviewing these documents. You will also have to offer ongoing training and education for staff and contractors, plan movement and details for special and high-risk events, and analyze financial reports to make sure operations are never in distress.
Also note that you will have to maintain your business and contract budget for all military and security operations, order security-related supplies and equipment, make arrangements for operations and activities with law enforcement (and other agencies), and be present at meetings and professional seminars. When the contract permits, you may also have to arrange and offer support during emergencies.
c. What Skills and Experience Do You Need to Build a Private Military Company?
- Critical thinking
- Weaponry usage
- First aid and CPR
- Interpersonal communication
- Risk management
- Calm under pressure
- Attention to detail
- Good leadership skills