Security Issues

Crimes against people and crimes against property can significantly add to your cost of doing business for many types of small businesses. Shoplifting, employee theft of inventory (sometimes euphemistically called "asset shrinkage"), and theft of business property are all too common and costly. Crimes against business owners, employees, customers, and others who enter the premises are less common, but can be more tragic and traumatic when they occur.

While you'll never be completely free from the effects of crimes against your business, there are decisions that you can make about your facility that can lessen the likelihood and impact of crime on your business. Primarily, these decisions concern facility location and building security.

Site selection. Where you decide to locate the facility can have a great effect on the security needs of your business. If you locate in a high-crime area, you'll likely need to invest in more facility security features than if you locate in a low-crime area. This could lead a prospective business owner to say, "So I'll only think about putting my facility in the most crime-free area that I can find." However, remember that higher-crime areas are usually significantly cheaper in terms of rent, and if you can save 60 percent of the cost of your rent, you can buy a very nice security system and still come out ahead.

Another consideration is that higher-crime areas are often underserved in terms of retailers and other businesses. Some small business owners have found they can make a good living by accepting the risks of a operating in a particular neighborhood where there's little or no competition.

Building security features. What kind of security features you'll need will depend on what kind of business you operate, and on how severe you think the crime threat to be. Common building security features include:

Security guards. Depending on the severity of threats your business faces, you may find it advisable to augment your building security features by using security guards. You can either employ such guards directly, or contract with private security service companies for them. Although you can have a guard stationed at the site around the clock, most small businesses that use security services opt for a guard that periodically checks the facility after hours. Leaving trained guard dogs to roam the locked facility after closing is another alternative.


Before you decide to use security guards on your business premises, ask your insurance agent about how this affects your liability coverage. You should be particularly careful about this if your guards will be armed, or if you will be using unattended guard dogs. The last thing you want is to end up paying a legal judgment to a burglar!