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Signal 88 locking down security biz


The technologically enabled patrol division allows multiple local businesses to share patrols.

Just about every new business claims to be the Uber of whatever or the disruptor of an entire industry.

So when Signal 88 co-founder and CEO Reed Nyffeler says, “We’re really a market disruptor,” it’s taken with more than a grain of salt. But looking across the security industry, it’s clear he’s no jargon-happy huckster. There really isn’t anything else like Signal 88 in the security industry.

According to an all-encompassing white paper by Robert H. Perry, a security industry watcher and transactional enabler, Signal 88 is shaking up a large pond populated by a handful of very large fish. Outsourced security makes up $23 billion of the $43 billion market, and three large players make up 44 percent of that sub group.

“Entrepreneurship is dying, fewer people are taking risks, the franchise heyday was in the ‘90s,” said Nyffeler.

That means security is a big, tired and risk-averse industry ripe for disruption, no matter how cliché the term has become. Since being founded in 2003 in Omaha, Nebraska, the company has disrupted the status quo at a breakneck pace. It’s now in the hands of 180 franchise owners with 400 territories.

As for services, they look a lot like a typical security company on the surface. There are patrol services, event services, dedicated security services and other custom solutions. Behind the scenes though, there is a lot of infrastructure that enables franchisees like Jeff Carlyle to focus on the real business.

“They give us the technology platform, all the back office support like payroll, training, some of the hiring—things that the general law enforcement background might not have,” said Carlyle. “That allows the operator to really focus on operations and sales.”

He, along with business partners Mark McClure and Rick Dunn, pooled their resources and now manage several territories they started and several they acquired. Each had a law enforcement background and plenty of work ethic, but the thought of starting their own company was a tricky proposition.

The technologically enabled patrol division, for instance, is a big seller. What Carlyle calls a differentiator for the brand allows multiple local businesses to share patrols, keeps cost down for clients and means guards aren’t just staring out the window.

Reed Nyffeler,

Reed Nyffeler, CEO of Signal 88, has sold a mere 12 percent of identified markets and has 180 franchise owners.

“A normal security guard is very expensive, and they work for about 10 minutes and then just sit there and wait for something to happen,” said Dunn. “But with the patrol aspect, they have a nice-looking truck with a light bar and a computer—basically a police package. And you can share with four or five companies in the local area.”

The technology isn’t just for the guard to check email, either. It feeds logs directly to the franchisee, allowing them to show clients exactly what is going on.

“It’s all live. Information goes right to the main board and is stored,” said Dunn. “It’s verifiable, we can prove we were there and prove what he was doing. I think a lot of the newer managers--the younger managers--really like that.”

The group said costs were low to start for a territory of 100,000 people. The most recent franchise disclosure document put the range at $75,000 to $268,400 including franchise fees. While the group didn’t disclose financial performance, the FDD showed an average gross revenue of about $468,000 with a 35 percent gross profit percentage.  

Carlyle said the foundation of the business is landlords maintaining security at their apartments. But suburban business alcoves and events are big money-makers as well.

Nyffeler said the only problem is finding enough franchisees to manage the demand for Signal 88 service. It’s created financing programs and a bevy of resources, but Nyffeler is looking for more people to fill out the country. He said just 12 percent of identified markets have been sold.

“If we find a capable, quality franchisee, we’ll do everything possible to get them into the brand,” said Nyffeler.

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