In developing a good operating budget for this security company, the company will consider the various risks exposed to physical and personal security of the targeted individuals and properties. It has previously been noted that this risks increase with the increase in technological development. It is important to note that for instance between the years of 2003 to2005 the security cost as a percentage for the IT budget increased from about 10 to 30 percent for half of the respondents. Although it has it has been found out in the previous years that the security budget has increased between 3-5 percent as a result of increase in technology, the figure is likely to increase even faster in the coming years. This is because the need for security increases with technological advancement. This is due to security reinforcement which will involve employing more personnel and advanced equipments to cope with the increasing technology (David S. Katz, 2003).

The first stage in development of the budget will involve risk assessment. This includes the risks posed to the target individuals and properties. This will include; physical assets for example real assets, and automobile, personal financial assets such as cash, investments, credit cards, human who also includes oneself, immediate family and pets. After identification of the assets, we will rank them in terms of risk probability so as to help in the budgeting in terms of money allocation. Next it is important to come up with a list of threats which may include fire, floods, theft tidal waves, terrorism, and, sickness. The next stage is identification of possible vulnerabilities. Vulnerabilities are broken down into various categories, which may be high, medium or low. In calculating vulnerabilities we will consider instances such as the behavior of the targeted individuals. For example, do they like to party too much? Are there drunkards? What time of the night do they go back home?  What is the security situation in their residential areas among others? After considering the vulnerabilities the final step is calculation and resource allocation (Fennelly, 2003).

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Moving by the statistics of the previous years an increase in risks to both physical and personal security has been noted. This automatically calls for an increase in budget allocation in all areas of security. Beginning with assets, it has been found out that the risk possibility is medium. However there has been an increase in robbery incidents particularly in highway robbery and thefts in real estates. There is a projected increase of these incidents in the next financial year by 4 percent as compared to this year. The budget allocation to the security of all assets will be 2 million dollars. This will include; security against cash theft 500000$, automobile theft 800000$, pet theft 20000$, house breakages 500000$. This will cover up for the patrol expenses, increase in security personnel and reinforcement of security arsenals. Due to the increased risks that the security personnel are exposed to as well as increase in numbers, the company has seen it fit to increase the medical allowance as well as health insurance. All this is budgeted to be 500000$ (Blyth, 2008).

The risk assessment of terrorism has been found to high as compared to the previous fiscal years. This has been coupled along with a medium likelihood of terrorist attacks following the killing of the main mastermind of the Al-Qaida terrorist group assuming its member might seek revenge. Therefore the budget allocation for anti terrorism has been increased to 10 million dollars. Following the recent of tidal waves along the coastal regions, the rescue groups need to be provided with more marines and swimming costume due to the reinforcement in order to deal with such issues more efficiently. Also, due to the recent increment of fire incidents, the fire brigade needs to be provided with more modern fire fighting equipments. A beef up in their number is also crucial. This will require an increase of 3 percent to the current budget hence making the total sum to reach 2 million dollars. Therefore, the total budget for the next fiscal year will be 14.5 million dollars.