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Starting a Private Military Company – A Complete Guide

Are you interested in starting a private military contractor company? If YES, here is a complete guide to starting a private military company with little money and no experience.

Okay, so we have provided you an in-depth sample private military company business plan template. We also took it further by analyzing and drafting a sample private mercenary services marketing plan backed up by actionable guerrilla marketing ideas for car private military companies. In this article, we will be considering all the requirements for starting a private military company. So put on your entrepreneurial hat and let’s proceed.

Why Start a Private Military Company?

The need for a secured environment cannot be relegated to the background in our today’s world full of chaos and graphical waste of lives, as a matter of fact; there are organizations that can’t operate if they don’t have private military as security guards.

For example; oil companies that work in rigs in hostile environment or construction companies that work in areas prone to violence would need armed security personnel to provide security for them in order for them to carry out their operations. That is where private military companies come in.

At the end of the Cold War between the United States and the now balkanized USSR, the world’s standing armies began to get smaller. Meanwhile, the nature of warfare was changing. Low-intensity conflict began to replace large-scale wars. In such a conflict, armed force is just one small part of an expansive menu of social, economic and political tools available to engage an enemy.

Accompanying this silent wars trend was a dramatic increase in the use and proliferation of advanced weapon systems. Maintaining these systems became a serious challenge. Soldiers spent more time monitoring weapons and learning how to operate them. With resources already stretched thin, armies were having trouble keeping up.

Floating a private military company is a little bit challenging simply because of the various huddles and governmental challenges you need to scale through before you can be issued license from the United States government. You are expected to have a sound military background, relevant certifications and clean criminal records. Once you are able to secure your license, you will still be expected to abide by the rules and regulations governing the business or else your license will be revoked and your company shot down.

Starting a Private Military Company – A Complete Guide

  • Industry Overview

According to a 2008 study by the Office of the Director of National Intelligence, private contractors make up 29% of the workforce in the United States Intelligence Community and cost the equivalent of 49% of their personnel budgets.

  • Interesting Statistics About the Private Military Contracting Industry

The Department of Defense (DOD) has an annual budget of over $500 billion as of 2011. A significant portion of these funds are used to purchase equipment and supplies from private civilian contractors. Although many military contractors are large corporations, contracts are also awarded to small businesses that provide products and services needed by the DOD.

The industry is growing with some estimating annual contracts in the $10-$20 billion range and others citing numbers as high as $100 billion. Though a worldwide phenomenon, the United States and Great Britain account for over 70% of the world’s market for their services.

Dramatic growth in the number and size of private military companies occurred at the time of the end of the Cold War, as Western governments increasingly began to rely on their services to bolster falling conventional military budgets. Some of the larger corporations are: Vinnell and Military Professional Resources Inc. in the United States; G4S and Keeni-Meeny Services in the United Kingdom; Lordan-Levdan in Israel and Executive Outcomes in South Africa.

The services of private contractors are used around the world. P. W. Singer author of Corporate Warriors: The Rise of the Privatized Military Industry says “In geographic terms, it operates in over 50 different countries. It’s operated in every single continent but Antarctica.” Singer stated that in the 1990s there used to be 50 military personnel for every 1 contractor, now the ratio is 10 to 1. He also points out that these contractors have a number of duties depending on who they are hired by.

In developing countries that have natural resources, such as oil refineries in Iraq, they are hired to guard the area. They are also hired to guard companies that contract services and reconstruction efforts such as General Electric. Apart from securing companies, they also secure officials and government affiliates.

Starting a Private Military Company – Market Research and Feasibility

  • Demographics and Psychographics

The demographic and psychographic component of those who need the services of a private military firm spreads across the public sector, the organized private sector.

  1. Governments
  2. Multi-National Corporations
  3. Oil Companies
  4. International Organizations
  5. Humanitarian agencies
  6. Non-Governmental organizations
  7. Media Personal
  8. The United Nations

List of Niches Within the Private Military Contracting Industry That You Can Specialize in

  1. Logistics
  2. Arms trade
  3. Escort services
  4. Combatant services
  5. Technical services
  6. Training and re-training.

The Level of Competition in the Private Mercenary Industry

There’s always going to be competition. Some of it will be good for you, and some of it will be bad for you. Accept it as part of life. Just keep in mind that you’re in business because you feel you can do a better job; you can do it more efficiently; and you can do it with greater satisfaction to your customers than anyone else. Be aware of the competition, but don’t worry about it. Just stick to your own business plan and you’ll be okay.

List of Well Known Brands in the Private Military Industry

The market for private military forces is enormous, so it’s no surprise that many different companies have emerged to capitalize on the billions of available dollars. The following is a list of popular private military companies that have existed or currently exist:

  1. BlackWater Corporation Worldwide
  2. Control Risks
  3. DynCorp
  4. Erinys
  5. Executive Outcomes
  6. Global Strategies Group, formerly Global Risk Strategies
  7. Kroll
  8. Military Professional Resources Inc. (MPRI)
  9. Olive Group
  10. Sandline International
  11. Triple Canopy
  12. Vinnell

ECONOMIC ANALYSIS

The private military company business is really terribly expensive to get into. Once you have the necessary equipment, insurance, and supplies, you’re ready to roll. The hard part is going to be drumming up business. Now days, just about any small business is going to be very competitive, due to the fact that so many people have lost their military jobs over the last few years since the cold war, and many of them are going into business of security themselves. If you work hard and do a good job, then business will come your way.

Starting a private military company is not like starting a mom and pop business in a street corner in down town Chicago, IL; it is indeed a serious business hence critical economic analysis must be conducted to ensure that the risks and other threats associated with starting a business from the scratch or investing in a business idea are mitigated.

If you are considering starting a private military company in the United States, your concern should not be restricted to just acquiring an office facility and equipping the facility or hiring the best hands in the industry, you should also be concerned on how to attract clients and secure mouthwatering security contracts.

On the average, setting up and running a private military business in the United States can be cost effective simply because you don’t have to maintain a large workforce when you don’t have a security contract to execute. With key good company’s profile, highly trained, highly qualified and highly experienced staff members in your team, you won’t have to struggle much to win security contracts when you submit your bids.

Is a Private Military Company Worth Starting from Scratch or is Buying a Franchise Better?

Personally, I don’t see the need for you to even consider buying a franchised operation. There’s just too much real help available for the “independent” to go to the considerable expense and obligation of a franchise. Starting from scratch, and as an independent, this is most assuredly a low-investment, low-overhead type business the kind we recommend for anyone and everyone who’s determined to make it on his own.

Although there is the possibility of buying a franchise from a successful private military company or even partnering with a big security company if you are considering owning an investment in the security industry.

One thing is certain, people are motivated to start a business based on various factors and incentives. If you are looking towards building a business that you intend controlling, a business brand that you hope to one day transfer ownership to your children and perhaps also sell franchise in future, then starting from the scratch should be your best bet. But if you only interested in making money and multiplying your wealth, then you may as well buy the franchise of a successful private military company that is willing to sell its franchise.

Possible Threats and Challenges of Starting a Private Military Company

Generally in the private military industry, both the already established private military companies and start – up security companies are subject to threat and challenges from government policies, global economic downturn which usually affects spending and unforeseen natural disasters (disasters that may cause setback).

Another threat that you are likely going to face when you start your own private military company is the arrival of a well – established private military company in the location where your business has strong presence.

Starting a Private Military Company – Legal Issues

  • Best Legal Entity to Use for a Private Military Company

Choosing a legal entity for a business is a huge determinant of the size the business will grow into, so choosing the right entity is very straightforward especially if you decided to grow the business big in the long term. While many business owners remain as a sole proprietor, there are others who form a corporation or a Limited Liability Company (LLC).

There are a number of tax and legal protections that you are afforded when you do so. Therefore, check with a tax or legal professional on the benefits of the different types of business entities and whether you should consider having your business become such an entity.

No doubt starting a private military company is indeed a serious business which is why the legal entity you choose will go a long way to determine how big the business to can grow. Choosing a legal entity for a business such as a private military company is some worth straightforward especially if you decided to grow the business big.

When it comes to choosing a legal entity for your private military company you have the option of choosing from a general partnership, a limited partnership, an LLC, a “C” corporation, or a “S” corporation. It is important to clearly state that these different forms of legal structure for business has its own advantages and disadvantages; which is why you must weigh your options properly before making your choice on the legal structure to build your private military outfit on.

These are some of the factors you should consider before choosing a legal entity for your private military company; limitation of personal liability, ease of transferability, admission of new owners and investors’ expectation and tax issues. If you take your time to critically study the various legal entities to use for your private military company, then you will agree that limited liability company; an LLC is the most suitable. You can start your private military company as a limited liability company (LLC) and in future convert it to a ‘C’ corporation or even a ‘S’ corporations especially when you have the plans of going public.

Upgrading to a ‘C’ corporation or ‘S’ corporation will afford you the opportunity to grow your private military company so as to compete with major players in the security industry; you will be able to generate capital from venture capital firms, stock market, you will enjoy separate tax structure, and you can easily transfer ownership of the company; you will enjoy flexibility in ownership and in your management structures as well.

Catchy Business Name ideas Suitable for a Private Military Company

Your private military company business name will be the first impression for your security business. Whatever the name is, it does not have to be flashy and lousy, make it less attention seeking as possible. Based on whichever name it is, it must create fear and make your clients feel safe. Consider the following names for your start-up;

  1. AirScan
  2. Allied Barton
  3. Arma
  4. Armor Group
  5. Asia Security Group
  6. Black Element
  7. Black Tiger International
  8. Blue Mountain Group
  9. Bohemia Interactive
  10. Chubb Security
  11. Corps Security
  12. Cubic Defense Applications
  13. Draken International
  14. Finnish Defense Forces
  15. H.O.S.T. Company
  16. G4S Risk Management
  17. GardaWorld
  18. Global Defense Systems
  19. HB Solutions
  20. International Intelligence Limited
  21. Jack Desmond Worldwide
  22. Paladin Tactical Solutions
  23. Pinkerton Government Services
  24. Red Sand Solutions
  25. RSB Group
  26. Securitas AB
  27. Sharp End International
  28. The Brink’s Company
  29. Triple Canopy
  30. Washington Group International

Best Insurance Needed for a Private Military Company

In the United States and of course in most countries of the world, you can’t operate a business without having some of the basic insurance policies that is required by the industry you want to operate from. Besides, the nature of the security industry requires that you have the proper insurance cover in place or else you will be forced out of business if anything goes wrong with the security contract you are handling.

So, it is important to create a budget for insurance and perhaps consult an insurance broker to guide you in choosing the best insurance policies for your private military company; it is their duty to help you assess the risks involved in the type of security business you intend running and then advice you accordingly.

Here are some of the basic insurance covers that you should consider purchasing if you want to start your own private military company in the United States of America; General insurance, health insurance, risk Insurance, payment protection insurance, liability insurance, workers compensation, overhead expense disability insurance and, business owner’s policy group insurance.

INTELLECTUAL PROPERTY PROTECTION

If you are considering starting your own private military firm, then you should consider filing for intellectual property protection. Filing for intellectual property protection for your firm is not only limited to your company’s logo and other documents, and but also protecting of course the name of your company.

If you want to file for intellectual property protection and also register your trademark in the United States, then you are expected to begin the process by filing an application with the USPTO. The final approval of your trademark is subjected to the review of attorneys as required by USPTO.

Is Professional Certification Needed to Run a Private Military Company?

Even though to operate legally, you must obtain a business license to operate the business, it is not technically required by law to employ licensed and certified personnel. To work for a private contractor agency as a security professional, workers must earn a private military contractor license or registration with their state.

Applicants typically need to hold a certain amount of training or experience and must pass a private military contractor exam. They may also need to undergo fingerprinting, and pass a criminal background test. Any security contractors who carry weapons must also be properly registered with their state.

List of Legal Documents Needed to Run a Private Military Company

Register your business with the government. Laws vary by state. Talk to your state Department of defense and Department of Licensing to receive the forms that you need to establish your business and to learn if you need a license to do b. You can notify the federal government of your business by applying for an Employer Identification Number (EIN). You can also create a business name for yourself and file a “Doing Business As” or “DBA” notice.

These are some of the basic legal document that you are expected to have in place if you want to start a cleaning business in the United States of America;

  • Certificate of Incorporation
  • Business License
  • Business Plan
  • Non – disclosure Agreement
  • Memorandum of Understanding (MoU)
  • Apostille
  • Employment Agreement (offer letters)
  • Operating Agreement
  • Company By laws
  • Operating Agreement for LLCs
  • Insurance Policy

Writing a Business Plan for your Private Military Company

You’ve probably heard quite a lot of humdrum involving business plans. The reason for that is that they are extremely important especially in a carpet cleaning business. Consider it a roadmap for your business, one that will show you where to go during which stages. For now, however, we’ll have a look at those initial figures you’ll need to get yourself going.

Now, setting up a business plan to help start a carpet cleaning business isn’t rocket science and does not necessarily involve a business consultant’s input. The key to any business plan is to make a list of those things you will be spending money on and how much you will be getting in.

You might wonder why you need to have a business plan. You already know what kind of services you could offer. All you need is to find a client to start your bookkeeping business. If you need to do some marketing, you might say “I will think about it along the way”.

However, one of the most important management functions is planning. Without planning, you don’t know which way your business is going and you cannot measure your progress. A lot of small businesses fail because of poor planning.

Here is a list of items in your business plan to consider:

  1. Summary of Business Plan
  2. Management and Operating Plan
  3. Competitive Analysis
  4. Market Analysis and Marketing Plan
  5. Financial Plan
  6. Summary of Business Plan

A Detailed Cost Analysis for Starting a Private Military Company

There are several expenses that you would have to make before successfully launching your own private military company. It is important to state that the location you choose to launch your business will definitely impact on the overall cost of starting the business which is why it is very important to have concluded and analyzed your feasibility studies and market survey before drawing up a budget and sourcing for funding for your business.

Here are some of the basic costs you must look towards fulfilling when starting a private military company in the United States of America;

  1. The Total Fee for incorporating the Business in United States of America – $750.
  2. The budget for Insurance, permits and license – $5,000
  3. The Amount needed to rent a suitable office facility with enough space in the United States of America (Re – Construction of the facility inclusive) – $50,000.
  4. The Cost for equipping the office (computers, printers, fax machines, furniture, telephones, filing cabins, safety gadgets and electronics et al) – $15,000
  5. The cost for acquiring security equipment, gadgets, accessories and uniforms – $100,000
  6. The Cost of Launching an official Website – $700
  7. Additional Expenditure (Business cards and Signage) – $2,500
  8. Other miscellaneous – $10,000

Going by the report from our research and feasibility studies, we will need about $200,000 to set up a small scale private military firm in the United States of America.

On the average, you would need over 500,000 US dollars to start a medium scale private military company in the United States of America. If you choose to start a large scale private military company, then you should look towards budgeting about 4 million US dollars and above. This money includes paying military experts that will be on your employee / payroll.

  • Financing your Private Military Company

Beyond traditional financing, you have a range of options when it comes to raising money. Some suggestions:

  1. Your own resources: Do a thorough inventory of your assets. People generally have more assets than they immediately realize. This could include savings accounts, equity in real estate, retirement accounts, vehicles, recreation equipment, collections and other investments. You may opt to sell assets for cash or use them as collateral for a loan. Take a look, too, at your personal line of credit. Many a successful business has been started with credit cards.
  2. Friends and family: The next logical step after gathering your own resources is to approach friends and relatives who believe in you and want to help you succeed. Be cautious with these arrangements; no matter how close you are, present yourself professionally, put everything in writing, and be sure the individuals you approach can afford to take the risk of investing in your business. Never ask a friend or family member to invest or loan you money they can’t afford to lose.
  3. Partners: Using the “strength in numbers” principle, look around for someone who may want to team up with you in your venture. You may choose someone who has financial resources and wants to work side-by-side with you in the business. Or you may find someone who has money to invest but no interest in doing the actual work. Be sure to create a written partnership agreement that clearly defines your respective responsibilities and obligations.
  4. Government programs: Take advantage of the abundance of local, state and federal programs designed to support small businesses. Make your first stop the U.S. Small Business Administration; then investigate various other programs. Women, minorities and veterans should check out niche financing possibilities designed to help these groups get into business. The business section of your local library is a good place to begin your research.

Choosing a Suitable Location for your Private Military Company

Choosing a location for your business is not what you should do without due consultation. The truth is that if you get it wrong with the location where you have decided to pitch your business tent, you are more likely going to struggle to make headway with the business.

One of the major reasons why businesses struggle, fail and eventual close shop is the fact that the owners decided to choose a wrong location for the business. As a private military contractor, situating your firm in a country or state hostile to your cause will kill your business from onset.

Nonetheless, if you are able to build a successful security company brand, you can pitch your business in any part of the world and still make success out of the business- especially if you run a security consultancy and advisory business. Conversely, if you are just starting out; especially if you are a newbie in the industry, it is important that you locate your business in an area with healthy business activities.

Starting a Private Military Company – Technical and Manpower Details

Your manpower as a military contracting firm depends on the scale at which you operate, if you operate on a small scale, you will only be the one running the business but if you choose to expand and go medium then you will need at least 4 more workers, anything above 4 employees means you are operating on a large scale.

Whichever scale you wish to operate will determine your manpower need and it is important for you to know that the industry is labor intensive which only needs people to man the equipment.

  • Equipment Needed to Start a Private Military Company

Technically, the contractor can buy anything that is not on the ITAR Arms List without asking anyone anything. If it is an ITAR (International Trade in Arms Regulation) controlled item, he must get special disposition from the U.S. Government and or the government he is supporting, as there must be an End Users certificate.

These are only issued by authorized and recognized government agencies, such as Ministries of Defense and Interior (Police). Further in order to use lethal equipment and or equipment that may interfere with the Air Defense, Air Space Control, GSM, and or radio frequencies, they have to have permission and coordination of the government in the territory in which they are going to operate.

For especially sensitive equipment, it is normally GFE or Government Furnished Equipment. Which means in order to do the job, the government will provide the equipment and you (the contractor) operate and maintain it.

Starting a Private Military Company – The Marketing Plan

  • Marketing ideas and Strategies for a Private Military Company

Even before the acquisition of equipment, you need customers. Your problem is going to be in reaching these prospects, impressing upon then the benefits of your service, and getting them set up with an appointment for you to do the work.

In most cases, you’ll be favorably impresses with the work, and will only have to pay with a copy of the finished flyer for the student’s portfolio, and a recommendation or testimonial about his work for you. Even if there should be a charge for the work you have done at the college, it will be a reasonable one.

Contracting with an advertising agency will probably take longer and will cost a significant amount of money. However, you might be able to contact a staff member who does private work on the side. But you should set a specific date for completion of the project, and agree to pay no more than half the total estimated cost until the job is finished, and meets with your approval.

The next step is to take this original of your flyer to a printer, and have printed whatever number of copies you want to start. Most quick print shops will be able to print up to 20,000 copies, and deliver in a reasonable time, with nominal costs. If you decide to start with more than 20,000 copies, you will do better by going to a regular commercial printer. Larger quantities that would take a quick print shop all day can be handled by a commercial print shop in a few hours.

While your flyers are being printed, you should be lining up your delivery people -local Brownie or Cub Scout Troops. No big problem here. Either look up their local headquarters office in your phone book or call a friend or two with children about the right age for the name and phone number of troop leaders. Arrange to pay these scout troops $10 for each thousand circulars they hand out door-to-door.

One other thing before you start handing out your flyers, be sure that you have someone available to answer the phone and set up appointments for you. It’s usually best to have a woman do this; it makes the caller think of your service as an established business. You can pay an answering service to handle these calls for you, but if your wife or a friend is available that would be even better. It is, however, imperative that a “live voice” answer your phone. People have some strange ideas about answering machines, and most businesses find they do much better not using them.

Possible Competitive Strategies for Winning Competitors in the Private Military Industry

Even before the acquisition of equipment, you need customers. Your prospects are all the businesses and organizations you can convince. Your problem is going to be in reaching these prospects, impressing upon then the benefits of your service, and getting them set up with an appointment for you to do the work.

Contracting with an advertising agency will probably take longer and will cost a significant amount of money. However, you might be able to contact a staff member who does private work on the side. But you should set a specific date for completion of the project, and agree to pay no more than half the total estimated cost until the job is finished, and meets with your approval.

Possible Ways to Increase Client Retention for your Private Military Company

Once you have the skills and your equipment ready, it is time to start sourcing for clients and most times based on your pedigree and past records, your clients will look for you. It is important for you to decide the category of military business you want to opt for. To create awareness for your business, you should develop a business proposal and send to likely clients. You should also consider opening a website.

Strategies to Boost your Brand Awareness and Create a Corporate identity for your Private Military Company

A good way to boost your corporate reputation and create an impression is to invest in a uniform and dress neatly at all times. You should also have your employees wear uniforms and be of proper conduct. This will ensure that you are properly branded. You must also ensure that you handle your client’s property with care and observe all safety rules.

You should know that most client’s would be observing you while you work and therein lies the success of your business because the probability of a client calling you back for another job or recommending you to other people depends on their first impression of you and the way you handled their job.

Creating a Suppliers/Distributors Network for your Private Military Company

As a private military firm, be on the lookout for opportunities and referrals from other firms who are not in your niche. So also, utilize you chances by contacting your banks, non-governmental organizations, government agencies, and multi-national corporations to patronize and help them with their security needs.

Tips for Running a Private Military Company Successfully

The business of military contracting is a very risky venture that will later come with several court litigations and petitions due to the excesses of your personnel. As a business owner, you will succeed more in this field if you can train your military personnel to tone down these excesses. If they don’t, a bunch of the millions you make will be used in settling lawyers and paying damages in the long run.

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