#45: How to Start a Private Investigation Company

Introduction on How to Start a Private Investigation Company

Individuals wanting to start a private investigation company will come from a variety of backgrounds and have a variety of experience.  Each state will vary in regards to the experience needed to begin a private investigation business from extensive experience to no experience at all.  In the state of Washington for instance, an individual can obtain a business license by paying a fee of $600 and taking an examination to obtain their private investigation agency license.  An individual can also obtain their license by having 3 or more years of verifiable investigation experience and paying the $600 fee.  Washington also requires you carrying a bond or insurance and have no criminal convictions.  Other states may not require any licensing so be sure to check with your state on their requirements.

This article will cover typical questions in a general manner.  Every state is different but you should be thinking about each step before you start.  Some steps will need to be taken at the same time.

How to start a private investigation company


Before you are able to start your own private investigation business, you must determine your state’s licensing requirements.  By knowing the requirements that need to be met, you are able to take the necessary steps towards meeting the requirements.

In most states the following requirements need to be met:

  • You must be 18 years or older
  • You must have a specific amount of transferable experience or actual experience
  • You must have a clean criminal record
  • Be a United States citizen


Regardless of your state’s requirements on starting a private investigation business, you will need to gain some experience and learn the laws that directly and indirectly affect the private investigation industry.  Gaining experience will allow you to provide a variety of services to your future clients and help you determine what your areas of the private investigation industry you may want to specialize in.  Below are few resources that will help you get started with your investigative experience.

1.)    How to gain private investigator experience article

2.)    P.I Now’s list of the Top 25 Investigation Schools

3.)    College coursework in criminal justice in some states can substitute on the job experience.

4.)    If a test is required by the state, see if there is a study booklet or practice exam

5.)    Read private investigation books on the market.  Click here for private investigation books I recommend.

6.)    Get hired on with a company as a private investigator or an intern.


To find your state’s requirements, a helpful website to view CRIME TIME.

After determining your state’s requirements, fees, licensing requirements, submit all your information to the state.

In most cases, you will need to obtain a business license through the state as well as through the agency that governs private investigation agency licensing.


There are many business structures that are available for businesses.  Typically in my experience I have only observed two models. The two models are the Sole Proprietor and the Limited Liability Company or (LLC).

The sole proprietor is one of the easiest business models to begin with however it also carries the most liability.  An example of liability is if you are sued for any reason.  Your business and personal assets are combined as a sole proprietor.  Essentially the individual suing you can pursue your personal assets.

With an LLC the business owner can separate his personal assets from his business assets.  If you are sued, the individual suing your business can only pursue business assets.  For the dictionary definitions of LLC or Sole Proprietorship click on the provided links.


Your state will likely require that you obtain some sort of general business license.  In Washington state the license is called a Master Business License. The city you conduct business in will likely require you let them know so you can be taxed appropriately.


As previously stated each state will have different requirements in regards to the type of insurance or bond that is needed.  In most cases you will need 1 million in omission and errors insurance.  The price for this will vary but for some point of reference, I personally pay around $750.00 per year for insurance.  This is a small price to pay to protect you in case something goes wrong with an investigation.  The state of Washington will not renew a private investigation agency license without proof of insurance.


In order to determine what type of clients you would like to attract to your business, you must first determine what services you will offer.  Hopefully, by this step you have the experience needed to perform the services you are selling.

There are several categories that private investigators typically fall into.  The following are a few examples of private investigator career paths:

1.)    Insurance Fraud Investigator

2.)   Domestic Investigator

3.)   Criminal Investigator

4.)   Missing Person/Skip Trace Investigator

5.)   Computer Forensic Investigator

6.)   Defense Investigator

There are many companies in existence today that do not specialize in any one thing.  These companies provide 20 to 30 different services.  This may work for many companies however I would suggest focusing on about 10 different services for your company that complement each other.

An example of the services an Insurance Fraud Investigator perform include the following:

1.)    Scene Investigations (ie: slip and fall, vehicle accidents)

2.)   Recorded Statements

3.)   Alive and Well Checks

4.)   Activity Checks

5.)   Surveillance

How do these 5 things complement each other?  Each one of these services may lead to another service.  For example, if a recorded statement is taken from a claimant and the statement reveals something that contradicts something with the individuals claim the client may add a surveillance assignment to the case.

If you conduct an activity check on a claimant and determine something of importance for the client, a recorded statement could be assigned or future surveillance on the individual.

Having a smaller number of services allows you to become viewed as someone that is specialized and possibly better then the company that offers more services but isn’t an authority  at anyone one thing.


One of the best things I did as a new private investigation agency owner was to join a private investigation association.  I joined WALI, which stands for the Washington Association of Legal Investigators.  So of the great features of belonging to an association is being able to reach out to veteran investigators for answers or recommendations that you can’t answer.  You will find out that no matter how much experience you have in the private investigation industry, someone  always know more.  In addition you are placed on the association directory and are given discount pricing a private investigation seminars held by your association.


It’s easier said than done but the importance of continuing your education can not be emphasized enough.  Go to seminars and take courses in things that you can add as services. You will find that this can be difficult as you try to work as much as possible while maintaining some sort of work life balance in this industry.  Never the less you should attend seminars at the very least whenever possible.


There are many days in the beginning of my business that I would not have worked if it had not been for the relationships I had built with others in the industry.  Whether it be a client, potential client or former coworker, it is without a doubt in your best interest to build relationships.  If you build a good reputation then people will have no problem coming to you when they need help with work.


NOTE: You will have to market the heck out of your company, build relationships, and build a website.  You will also need to know how to present your information in a professional reports.  I will write articles on these additional things in the future.  So keep reading and watching the videos.





  1. I have been interning at a PI firm here in Las Vegas. I am moving to the Seattle area next summer. My plan is to apply for my PI license and agency license at the same time. ( I want to work for myself from the get go.) Do you have any recommendations on study material for both test?

    • Hi Cyndi,

      Great question. I got my agency license after having about 8 years experience and being licensed in the state for several years. I didn’t have to take the test. I’m not completely sure but I think they have material to review prior to taking the test.

      I would recommend reaching out to WALI because I know there are many of those in official positions that have taken the test and could answer that better than I. If you don’t get the answers you are looking for by doing that then let me know and I will try to find out the answer for you.


  2. I would like to be a PI to work for my self but I have a 14 yo felony assault does this make me null and void? Im in washington state. A PI once told me he could get me licensed even tho im a felon.

  3. I am currently, in law enforcement, will it be easier for me to get my PI license once I retire in another 2 yrs

  4. Just wondering, i have been in corrections for 3 years, and have a bachelor in criminal justice, would i still need to take any state testing to get a license? I am in washington state by the way. thanks for the help.

    • Good question Chris,

      It’s been awhile since I had to go through the process in Washington. If you are just getting a license to work for someone I think you are fine. You would just have to take the 1 day class which Linda Montgomery puts on in the Seattle area. For a company license I am not sure. They do have a test for licensing if someone’s experience doesn’t make the cut on experience. I think it just comes down to what they consider experience. I had been working for other companies for many years in Washington state so it wasn’t difficult for them to verify my experience.

      Here is a link to their requirements. http://www.dol.wa.gov/business/pi/piagency.html

  5. I have over 10 years investigating child abuse and neglect cases, a Bachelor degree in Criminal Justice and 1 year working for the police dept. I am in North Carolina. What do I need to do to open my own business my friend and I want to start a domestic investigation agency.