Our Man in the Field: Security for Profit?

Translating your security budget into a form the accounting staff can understand and use

For the past 20 years or so, I have been promoting security as being a profitable venture, if done properly. For the past 20 years or so, I have watched as security directors all over the world promote their annual budget or make requests for security upgrades. And for the past 20 years, I have watched as budget after budget has been revoked, shot down, or put off by the corporate bean counters. So I have spent the last few years consulting with various security directors and dealers on how to design a proper budget request. After all, if done properly, security is one of the most profitable functions that a corporation can do. That's right -- security can generate a countable, useable, cash profit. The key is to learn how to present and demonstrate.

Start with Problems
Let's start with the problems, and once these are deciphered, it will be easier to see why security budgets are difficult to get passed through the money guys. First, most security directors and security sales people do not come from a background that includes Accounting 101. Second, most security directors and security sales folks are not or have not been independent business people that have had to bare themselves in front of a non-personal banking group. This is a curable problem if you are willing to take a look at things from the other side.

Thirty years ago, I went in for my first corporate loan. I showed up in blue jeans with a crumpled piece of paper with some notes about the business that I wanted to start. I also had a note from the owner of the bank saying that he would back me up. I sat down with the head of the commercial loan department and proceeded to get the lesson of a lifetime. He asked what I needed and I said $20,000. He smiled and asked to see my business plan. I showed my crumpled paper. He smiled again and asked me why I was wasting his time. Undaunted, I showed him the note from the owner. He smiled again and shook his head. He then proceeded to explain to me that his job was to protect the owner of the bank from making foolish investments. He then suggested that I come back when I was serious about the venture. I stammered and asked him what I should do to show that I was serious. He said, "Pretend that you are loaning me $20,000 and then ask every question that you can think of to protect your investment. Organize the questions and answers into a report and then study the results. If you think that you are confident that I have a plan where I can and will pay you back, you did your job."

I left and went to work. I took a week's vacation from my job and spent the next 20 hours a day working on questions. I ended up with a 45-page report with graphs, studies, payment schedules, proposed incomes, markets, etc. I put on a suit and went back to the same man with five copies of my business plan. We reviewed the work and he was impressed. When he asked me what I intended to do with the extra copies, I told him that I was going to hand deliver them to each of the loan council members. I wanted to give them time to review my business plan before the next day's meeting. The net result was that I got my loan. I started LRC Electronics Company and went on to complete 20 very successful years of repairing CCTV equipment. I also was never turned down for a loan or budget again. Lessons were learned.

OK, so the stage is set. Let's review a few of the other problems with most security budget requests. They tend to be:

1. Financially unrealistic: Often, too much is asked for all at once. Or the request was too fancy or technical for the bean counters to understand. Often these unrealistic proposals didn't provide a progression over a couple of years.
2. Seen as unnecessary: There is a lack of perception of the need for security or updates by the corporate leaders. This means that you didn't present your case well or you didn't prove your needs sufficiently or you didn't present your case to enough key people for support.
3. Lack of funding: There is no funding available due to the timing of your presentation. Maybe you waited until the last moment. Perhaps you presented it too late in the corporate year to be considered for the next budget planning session. Maybe the bean counters don't understand why you are asking for the money and only see the purchase as "new toys." Maybe -- and this is the big one -- you didn't "speak bean"!

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