How to Build a Private Investigating Firm

Starting a private investigation firm is a good career opportunity.

According to popular mythology, becoming a private investigator is a way to tap into adventure and romance. Many would-be PIs fantasize about being like Humphrey Bogart in "The Maltese Falcon." In fact, starting and running a private investigation firm is more about tedium and boring details. You'll spend your time investigating and reporting on low-level crime such as insurance fraud, or looking for proof that a spouse is cheating. You might also be hired to help a corporate client figure out if a competitor is stealing intellectual property. But being a PI is an interesting career in which you can earn a six-figure income.

Instructions

1. Start small, with realistic expectations. Because private investigation can be a crowded, competitive field in many areas, such as major cities, begin the process of becoming a PI by working at related tasks and gaining practical knowledge. For example, recommends industry resource Investigators Anywhere (IA), get a job as a "gofer" at a law firm to see the kinds of issues that arise in combative legal encounters such as hotly contested divorces or lawsuits. Or work as an assistant to an insurance adjuster if you want to get into that side of the business.

2. Get educated. Because of the national breadth of the private investigation industry, plenty of national, regional and local education programs are available. Among established online educators that offer comprehensive coursework in private investigation are Penn Foster Career School and Detective Training's Private Investigator Training School. Completion of basic coursework, testing and certification usually requires three to six months or longer. Check local career schools and colleges to see if they feature private investigation education as part of their criminal justice program.

3. Create a business strategy that exploits key aspects of your community. For example, in some areas, divorce or real estate proceedings might offer the best opportunity. In another area, the potential might lie with insurance investigations or corporate espionage. Investigate your local or regional market and determine where you are most likely to find an open niche. Then create a plan for how you will cash in on that niche.

4. Do the math and plan your business accordingly. Know your earning potential and how you will have to manage costs to make a decent living. PI firms typically charge an hourly rate of $40 to $100, plus expenses, according to IA. The national average is closer to $50 to $55 an hour. To justify rates higher than about $65 an hour, you usually must be located in a major city or specialize in a particular skill in high demand and low supply, such as corporate counterespionage. If you grow your firm to the point where you want to hire additional investigators, expect to pay $25,000 or more a year in base salary, notes IA. Top guns in firms with major clients command as much as $75,000 a year.

5. Get licensed. Most states require that PIs have a license, reports IA. In states that do not require licensing, some counties and cities do require it. Investigate the laws in your state, county and city and make sure to be fully compliant. Little reciprocity exists between states, so be cautious of any interstate activities before you know the law in the other state. In general, it is illegal to solicit PI work in a state where you are not licensed.

6. Solicit clients. Your ability to market and sell your services will be as important as your investigation skills. Advertise in the local phone book. Establish a presence on a social networking service such as LinkedIn or Facebook. Join the Chamber of Commerce, the Rotary and any other business-related group where you're likely to encounter prospective clients. Take brochures and business cards with you to all meetings and events, and distribute them liberally. Keep an ear open for opportunity, such as an emerging insurance scandal or high-profile divorce case. Be the first to call and offer your services.

References

• Investigators Anywhere: FAQs About How to Become a Private Investigator
• Penn Foster Career School: Private Investigator
• Detective Training: Private Investigator Training School