How to start a private investigation business

By March 16, 2015Private Investigator

When we see a private investigator on TV, he or she is usually depicted in a glamorous way. In reality, however, it takes a lot of research, planning, hard work, and experience to start your own private investigation business. If you’re wondering how to start a private investigative business, read on.

Licensing and fee requirements

First and foremost, since every state is different, it is important to check your state’s private investigator licensing and fee requirements. As a general rule, however, most states begin by requiring that you be 18 years of age or older, have a specific amount of experience, a clean criminal record and be a U.S. citizen. It is likely that your state will also require that you obtain a business license in addition to the private investigator license to comply with state and federal tax codes. Additionally, you may have to notify the city where you conduct business in order for you to be taxed appropriately.

Gaining experience

Each state requires some type of experience before you can apply for a private investigator license. To meet this requirement you might:

1. Gain experience by volunteering as an intern with a private investigation company. By becoming an intern you can
easily learn how to search for information, edit surveillance videos, and become familiar with that
agency’s processes. Very often, companies will hire interns upon their completion of the internship.

2. Enroll in a private investigation training and education program.

3. Obtain a job in a similar industry such as loss prevention, law enforcement or the military.

4. Earn a college degree in criminal justice, law, or police science. In some states college course work can
substitute for job experience.

Once you know all the requirements for your state, you can begin to take the necessary steps towards meeting them.

Applying for your license

After you have fulfilled the experience qualifications, you are ready to apply for a license. At this point you must also determine what your business structure will be. The two most common choices are a sole proprietorship or a limited liability corporation (LLC). The basic difference between the two is that as a sole proprietor your personal and business assets can be combined giving you greater liability should you ever be sued, whereas with an LLC these assets are separate and your liability is limited to your business assets only.

Insurance and bonds

As with the individual state requirements for obtaining a private investigator license, each state also has their own requirement for insurance and bonds. Once again, insurance and bond pricing varies and is usually paid annually. Remember that most states will not renew a private investigator license without proof of insurance. However, this is one cost of doing business that is well worth the protection and peace of mind it provides should something go wrong with a case.

Decide what services you will offer

By now you have all the necessary experience to offer a specific service and specialize in all the complementing aspects of that service. For example, if you are specializing in insurance fraud several other services you might offer are surveillance, recorded statements, and accident scene investigations. Although there are companies that offer a wider variety of services, as a new private investigation business you do not want to take on more than you can handle. It is better to be viewed as a specialty firm rather than a firm offering many services but is not an expert on any one of them.

Some specialty services to consider may be:

1. Insurance fraud investigations
2. Domestic investigations
3. Criminal and/or defense investigations
4. Missing persons
5. Computer forensics


As a new private investigation business, one the best things you can do right away is to join a private investigation association in your state. A great benefit of membership in an association is that you will be able to reach out to veteran investigators for assistance with questions or problems.

It goes without saying that it is in your best interest to build strong relationships, whether it be with clients, potential clients or co-workers. If you consistently strive to maintain a good reputation, people will have no problem coming to you when they need help and will easily feel comfortable recommending you.

All in all, Your total estimated costs from licenses, fees and insurance, to a website and miscellaneous equipment should be approximately between $3,000 – $4,000 (this includes working from home instead of renting a fancy office and eliminating high marketing costs). While you may not find all the glamour and hype of a TV series, if being a private investigator is your life’s dream, don’t be afraid to get started on making that dream come true.

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