Where security systems contractors lose money
5 things cost security systems contractors money without ever becoming a line item, and each one traces to a step you can install. Security systems contractors average 22% gross margin, 16% overhead and 6% net profit at $1M to $5M of revenue. The CFOS target at that size is 25% gross margin, 15% overhead and 10% net, and the 4 points left on the table is where those mechanisms live. Figures for all 7 revenue bands are in the table below.
Security systems ranks 6th of 6 in electrical and technology on net profit, and it has heavier overhead than the 48-trade average. Here is every figure, across all 7 revenue bands.
Security systems by revenue band
| Metric | $1M to $5M | $5M to $10M | $10M to $25M | $25M to $50MModeled | $50M to $100MModeled | $100M to $500MModeled | $500M+Modeled | CFOS target at $1M to $5M |
|---|---|---|---|---|---|---|---|---|
| Overhead | 16% | 15% | 14% | 13% | 12% | 11% | 10% | 15% |
| Gross margin | 22% | 24% | 25% | 26% | 28% | 29% | 31% | 25% |
| Net profit | 6% | 9% | 11% | 13% | 16% | 18% | 21% | 10% |
| Metric | $1M to $5M | $5M to $10M | $10M to $25M |
|---|---|---|---|
| Overhead | 15% | 14% | 13% |
| Gross margin | 25% | 26.5% | 27.5% |
| Net profit | 10% | 12.5% | 14.5% |
Modeled extension of the survey curve, not reconciled against the licensed CFMA Benchmarker. That applies to the 4 bands above $10M to $25M, and no CFOS target is published for them.
Gross margin and overhead come from figures CFMA, Jones Maresca and other sources publish by trade and size, and they are before tax figures. Net profit starts from gross margin less overhead and is then adjusted for taxes and a few other expenses, so it is stated after taxes. It is published as its own average and is not calculated from the other two on the page.
CFMA reports net income before taxes, so a CFMA figure is higher than an after tax figure on the same business. CFMA's 2025 medians are 7.1 percent before interest and taxes and 6.7 percent net income before taxes. Read a net profit figure here against CFMA's with that difference in mind.
Above the $10M to $25M band the gross margin and overhead rows are a modeled extension of the same curves. They have not been reconciled against the licensed CFMA Benchmarker, so read those bands as a model and not as a survey result.
Run On CFOS. Run On CFOS Trade Benchmark Reference: Security systems. 2026. Sulphur Prairie Operations, LLC. https://runoncfos.com/trades/security-system. CC BY 4.0.
Figures on this page were last revised 2026-08-21. Published under CC BY 4.0, which permits reuse of any figure here, including commercially, as long as the credit above travels with it. The same figures in machine-readable form: /benchmarks.json.
Trade level gross margin and overhead come from figures CFMA, Jones Maresca and other sources publish, and Run On CFOS publishes net profit as a separate average stated after taxes. The CFOS targets beside them are from the book CONTROL: C.F.O.S. Construction Financial Operating System, published with the full reference at runoncfos.com.
- 2024 Construction Financial Benchmarker, Executive Summary, Construction Financial Management Association, 2024.
- 2025 Construction Financial Benchmarker, Executive Summary, Construction Financial Management Association, 2025.
- 2025 Performance Benchmarks, Construction Companies, Jones Maresca and Company, 2025.
- Run On CFOS Trade Benchmark Reference, Sulphur Prairie Operations, LLC, 2026.
Sourcing and method: the methodology page.
Which bands are measured. The 4 bands above $10M to $25M extend the survey curve further out and have not been reconciled against the licensed CFMA Benchmarker. How every figure was built is explained on the methodology page.
5 problems specific to security systems
Everything is mounted and terminated, and none of it works until the owner's IT group cuts the VLAN. You roll a crew for forty doors, nine have no power transfer, and you leave. Gear bought in month six to beat lead times uses up a year of manufacturer coverage before the owner ever accepts the building. You wire five figures for VMS and access licenses at PO, and the GC rejects them on stored material because there's nothing on a pallet to photograph.
Each one below points at the item, the unit, the clock, or the party that makes it a security systems problem, and it says which step fixes it.
| Mechanism | Why it's specific to this trade | Step |
|---|---|---|
| Your Last 20% Waits Behind the Owner's IT Department | The Division 28 head-end lives on the owner's network, so cameras, controllers, the VMS, and the access control server all need IP addressing, a dedicated VLAN, PoE ports, firewall rules, AD service accounts, and often a cybersecurity review before you can program one device. Every one of those belongs to the owner's IT department, a group that signed no contract with the GC and has no schedule obligation or liquidated damages exposure, so the GC can neither accelerate them nor extend you for them. Every other trade on the job finishes when its own work is finished, while you finish when somebody else's network engineer finds time. | Project management |
| Dead Openings: Division 8 Buys It, You Pay for the Re-Trip | Electrified locks, electric strikes, power transfer hinges, and EPTs are specified, bought, and installed under Division 8, and they do nothing at all until you terminate them. If a hollow metal frame shipped without the factory prep, or the hardware supplier value engineered an electrified function down to a mechanical one, or the wrong transfer device went in, the opening is dead and you found out by driving to it. You don't have a contract with the hardware supplier, so there's no backcharge path, and the GC files the whole thing under coordination. | Project management |
| Warranty Starts at Ship Date, Yours Starts at Turnover | Cameras, controllers, power supplies, and readers have warranty measured from ship or purchase date, and on a 20 to 24 month build that clock keeps counting while the gear waits in your warehouse and then in a ceiling. Your contract still owes a full twelve months from substantial completion, so the overlap you genuinely have shrinks every time procurement does its job well. This is the trade where the schedule fix and the warranty exposure are the same purchase order. | Job cost structure |
| GCs Won't Pay Stored Material on Software Licenses | Per channel VMS licenses, per door access control licenses, server OS, and the annual SMA all get bought at PO to fix the software release and the price, and none of them exist as a physical object. Every other material line on the job can be photographed on a pallet with a serial tag and paid at 90 percent, while yours can't be photographed at all. The maintenance clock also starts at activation, so a year of coverage the owner is paying for is used up while the building is still under construction. | Job cost structure |
| A 30-Day Camera Quote Against an 18-Month Buyout | Your material is finished imported hardware quoted off a manufacturer or distributor price list valid thirty days, against a buyout that closes six to eighteen months after bid. There's no public index and no hedge for cameras, panels, readers, and switches, and no GC recognizes an escalation clause on them, so the entire movement is yours. The trade working next to you on the same job can at least argue copper, while your price can be revised by email. | Estimating system |
Security systems against the other 47 trades
| Metric | Security systems | Electrical and technology average | All 48 average | Rank |
|---|---|---|---|---|
| Overhead | 16% | 15.5% | 15.1% | 32nd of 48 |
| Gross margin | 22% | 22.8% | 22.1% | 20th of 48 |
| Net profit | 6% | 7.3% | 7% | 38th of 48 |
Security systems sheds 6 points of overhead between $1M to $5M and $500M+, against 6 for electrical and technology as a group. Inside that group, Electrical is the most profitable at 9%, and Fiber, Solar and Telecom all have 15% overhead, the leanest. Security systems is neither, which is the usual position and the one with the most room in it.
Other electrical and technology trades
What owners ask
What overhead should a security systems contractor have?
Security systems shares its overhead figure with 12 other trades at this revenue, which is what the published data resolves to. It averages 16% at $1M to $5M and 10% at $500M+, as a percentage of revenue. That is 0.5 points above the electrical and technology average of 15.5%. The CFOS target at $1M to $5M is 15%. The CFOS target is one point leaner than your trade's industry average at your revenue.
What gross margin should a security systems contractor have?
Security systems shares its gross margin figure with 12 other trades at this revenue, which is what the published data resolves to. It averages 22% at $1M to $5M and 31% at $500M+, as a percentage of revenue. That is 0.8 points below the electrical and technology average of 22.8%. The CFOS target at $1M to $5M is 25%. The CFOS target recalculates at your revenue: whatever gross margin produces the net profit target once overhead is paid, never below your trade's own industry average.
What net profit should a security systems contractor have?
Security systems shares its net profit figure with 3 other trades at this revenue, which is what the published data resolves to. It averages 6% at $1M to $5M and 21% at $500M+, after taxes, as a percentage of revenue. That is 1.3 points below the electrical and technology average of 7.3%. The CFOS target at $1M to $5M is 10%. The CFOS target recalculates at your revenue: 10 percent after taxes, or 3.5 points better than your trade's industry average, whichever is higher.
What profit margin should a small security systems business have?
Owners usually mean net profit when they say profit margin, and for security systems at $1M to $5M that's 6%. Gross margin is a different number, 22%, and it's what's left after job costs but before overhead. Overhead is the 16% between the two. A small security systems business holding 6% net is at the published figure for its size, and the CFOS target at that revenue is 10%.
Does security systems get more profitable as it grows?
Overhead is the number that moves. Security systems sheds 6 points between $1M to $5M and $500M+, which is in line with the 6 points electrical and technology sheds as a group. Net profit starts 1 points under the 48-trade average, so the room is in the overhead line before it's anywhere else.
Where does security systems rank against the other trades?
Security systems is 6th of 6 in electrical and technology on net profit. Electrical is the most profitable at 9%. Fiber, Solar and Telecom have the leanest overhead at 15%. Gross margin ranks 20th of 48 and overhead ranks 32nd.
That's the industry average and the CFOS target for security systems at every size. Want your own books set beside them? The Financial Health Snapshot builds a CEO Report from your last twelve months, sets every figure against your trade, and walks you through it on a 60 minute call. SPM The Construction CFO (Sulphur Prairie Management, LLC) is a separate firm, and the same author leads it.
Everything on this page is something you can install yourself, and CONTROL is the order to do it in. If you would rather buy the finished result, SPM The Construction CFO does this work for security systems contractors as a service. It is a separate firm, Sulphur Prairie Management, LLC, led by the same author.
Wrote CONTROL, the 8 step system behind these figures. More about the author.