Calculated Bootstrapping: How to Grow Your Security Business Without Capital Investment

July 5, 2024
Costly borrowing can make a project or initiative’s ROI zero quickly; however, there are ways to grow without spending if you are willing to roll up your sleeves to bootstrap your way to success.

This article originally appeared in the June 2024 issue of Security Business magazine. Don’t forget to mention Security Business magazine on LinkedIn and @SecBusinessMag on Twitter if you share it.

Financial analysts, entrepreneurs, seasoned business owners, and new entrants into the security industry are all taking a closer look at profitability and cash flow. Most agree that we are currently navigating an unstable period in our economy characterized by strong headwinds, higher interest rates, and inflation – all of which impact capital allocation.

Costly borrowing can make a project or initiative’s ROI zero quickly; however, there are ways to grow without spending if you are willing to roll up your sleeves to bootstrap your way to success.

Bootstrapping in business refers to the process of starting and growing a company using only internal resources and revenue generated by the business itself, without relying on significant external investment or loans. This is not necessarily the best option; in fact, it could be a harder way (or more time-consuming way) of doing things.

This approach emphasizes self-sufficiency, frugality, and sustainable growth. It is not just a way for established businesses to grow, but also a method often chosen by entrepreneurs who want to maintain control over their business and avoid diluting ownership by taking on external investors or loans.

The emphasis is on achieving positive cash flow and self-sustainability. Bootstrapped companies grow organically, reinvesting profits back into the business to fuel expansion and development​​.

Key Characteristics of Calculated Bootstrapping

Several successful companies have used bootstrapping to grow their businesses. One example is Mailchimp, which started as a bootstrapped company focusing on sustainable growth and customer-centric development. Similarly, Basecamp grew by prioritizing profitability and sustainability without relying on external capital. These companies exemplify how bootstrapping can lead to significant success through strategic planning and efficient resource management​​.

Calculated bootstrapping – or growing a business by carefully planning and following a self-sufficient, frugal, and sustainable strategy – can be accomplished following some key principles:

Revenue generation: The primary goal is to generate revenue quickly without spending. This ensures the business can support itself and fund further growth without needing external capital. Are you maximizing your existing opportunities?

Frugality: Careful financial management is crucial. Bootstrapped businesses prioritize essential expenditures and seek cost-effective solutions. This means using existing tools and resources​​.

Self-funding: Often involves using personal assets such as home office space or personal computing equipment to minimize costs​​. This ensures you do not bet the farm.

Sustainable growth: The emphasis is on achieving positive cash flow and self-sustainability. Bootstrapped companies grow organically, reinvesting profits back into the business to fuel expansion and development​​.

Have a plan: Make sure you brainstorm, research, and carefully outline what you are doing and the necessary steps to complete any project or initiative.

Five Ways to Put it into Practice

Calculated bootstrapping involves making strategic, cost-effective improvements to enhance business efficiency and profitability. By maximizing platform resources, conducting regular account audits, implementing efficient processes, enhancing sales and follow-up strategies, ensuring continuous training and alignment, optimizing inventory management, and strengthening customer relationships, businesses can significantly grow their RMR and strengthen their bottom line.

These steps not only improve operational efficiency but also create a more streamlined, customer-focused business that is well-equipped for long-term success in the security and/or alarm industry.

By focusing on the following five key areas, you can ensure sustained growth and profitability, positioning your business for success in a competitive market:

1. Maximize the platform. Using existing platform resources – such as those offered by, Resideo, DMP, or Alula – to their fullest is essential. These platforms and others offer tools and features that can enhance marketing efforts and upsell opportunities.

Creating targeted campaigns for additional services like video monitoring, home automation, or solar panel integration can increase average revenue per user (ARPU) and improve customer retention by providing more value. For example, platform-provided BI tools can help identify upsell opportunities among the existing customer base. By offering additional services that integrate seamlessly with what customers already have, a security company can enhance their experience and increase their loyalty. Furthermore, these upsells often come with higher margins, directly boosting the bottom line.

These platforms also offer automation tools that streamline routine tasks, enabling your team to focus on more strategic activities. Consider automating the synchronization of customer data with a central monitoring station – this reduces the time spent on manual data entry and minimizes the risk of error.

Automated systems can also trigger alerts for routine maintenance or contract renewals, ensuring that nothing falls through the cracks, and customers remain satisfied. You can also study the ROI of using integrated Customer Relationship Management (CRM) software, such as WorkHorse, that can streamline processes and create a single point of entry for data.

2. Conduct an audit. Regular account audits help identify and correct discrepancies, ensuring accurate billing and central station linkage. This practice is crucial during periods of growth, where errors can easily occur. Reviewing customer packages to promote bundled services over a la carte options can also lower average cost per user (ACPU) and customer satisfaction.

Audits should focus on identifying inactive accounts, accounts with incorrect billing, or never billed, and those with underutilized services. For example, you might find accounts being billed for services they no longer use or have never activated. You can also cross-reference invoices from the platform and central station against customer billings. You might have one or two accounts that have never been invoiced.

Not too long ago, we helped a customer find a rather large “leak.” After analyzing some pivot tables, we noticed a group of accounts that had been incorrectly onboarded and had the wrong service packages. It revealed a $22,800-a-year problem that had been going on for some time (total loss was about $90K over the life of the leak).

3. Enhance sales and customer follow-up processes. A structured sales and follow-up process can significantly impact business success. Training a sales team to follow up with customers after installation helps address issues and opens opportunities for upselling. Continuing follow-up conversations and keeping them friendly and focused on customer needs can lead to better reviews, higher satisfaction rates, and stickier accounts.

Sales follow-up should be seen as an opportunity to deepen relationships with customers. For example, after installing a new security system, a follow-up call can ensure the customer understands how to use all the features, as well as provide an opportunity to offer additional products that complement their current setup. This approach not only boosts sales but also enhances the customer's perception of service quality. Ensure your team is responsive, knowledgeable, and empowered to resolve issues quickly.

4. Train and align. Continuous training and alignment across all departments ensure that employees are well-versed in the products and services offered. Regular training sessions on platform tools and resources during any downtime keep the team updated on best practices. Standardized sales processes and clear communication channels maintain consistency and quality in service delivery.

Training should be comprehensive and ongoing, covering not only the technical aspects of your products but also effective sales techniques and customer service best practices. This ensures that all team members can confidently address customer questions and present your offerings in the best light. Share an elevator pitch with your staff or ask them for one and share that with the team. Additionally, aligning the entire team around common goals and procedures fosters a cohesive company culture focused on delivering exceptional value.

5. Optimize inventory management. Effective inventory management is crucial for minimizing costs and maximizing efficiency. By keeping accurate records of inventory levels and usage patterns, you can avoid overstocking or running out of essential items. Check the warehouse, the vans, your garage, the second-floor closet, and Mom’s attic for parts and tools. Regularly reviewing your inventory can help identify slow-moving items that can be phased out or offered at a discount to free up space and capital for more in-demand products.

About the Author

Jorge Olivieri

Jorge Olivieri is a Managing Partner with, a strategic business consulting firm. He is a seasoned strategic sales expert with more than 20 years of experience, including roles at and his own security business. Connect with him on LinkedIn at

[email protected]  - 240-550-1010