#62: Cost of Starting a Private Investigation Business. This is what I paid


When starting any business a future business owner wants to know what the potential cost of doing business each year will be.  The initial cost to start doing business for me was small because I had some of the equipment needed before I pursued my own business license.  Hopefully after reading this many of your questions will be answered regarding the initial cost of starting a private investigation business.

Before you become overwhelmed with what seems like a steep initial cost for equipment and licensing remember that these costs can be recovered after only a couple weeks of work (assuming there is work to be had).  It is also important to remember that some of these costs I will be talking about include what I had to pay because I work in the state of Washington.  Licensing or Insurance may be different for your state so be prepared for a cost that may be higher than the one I provide here.

Master Business License

For the Master Business license I believe I paid $25.00 however it was a long time ago so it may have been less than I remember.

Private Investigation License

To get my Agency License with unarmed principal (not licensed to carry a firearm while working as a private investigator) in the state of Washington I remember paying $550. Since then it has gone up to $600.  This was only the initial fee for the license.  I continue to pay $350 every year to renew my license.

Insurance

Many investigation companies are required to either have a bond or a errors and omissions insurance.   Errors and Omissions insurance will protect you in the event that you cause a financial loss to a client.   I carry $1,000,000.00 in coverage for my business.

I pay $763.71 for a year of coverage.  Instead of paying it all in one sum lump I make a down payment of 266.49 and then make payments of $58.44 over a 9 month period.

I go through Calahan Insurance Agency Inc (360) 576-2924.  I don’t get anything for referring him. I just want to give you the name of the company that you might want to get insured through.

Computer

In 2010 or 2011 I purchased a Toshiba Satellite L645 laptop for my company computer.  I think I paid about $650.00 for my computer at that time.  Not only do I process surveillance video through it but I also edit my Private Investigator Advice videos and my podcasts.  The computer came with the following things:

  • 4GB DDR3 1066MHz memory
  • 500GB HDD (5400rpm, Serial ATA)
  • DVD-SuperMulti  with Labelflash drive
  • 14.0” widescreen
  • Built in webcam and microphone
  • 10/100 Ethernet LAN
  • Wi-Fi Wireless networking
  • Battery Life up to 5 hours (this is debatable)
  • Memory card reader
  • 1-eSATA/USB combo port, 2-USB (2.0) ports

I have been very happy with this computer and it was worth every dime when I purchased it.  Toshiba made a good computer.

Dazzle: Avid Technology Dazzle DVD Recorder HD V14.0 (for capturing video with the time and date stamp)

This is what I have used to take the video from my video camera with the time and date intact as well as removing the audio from the final recording.  Amazon sells these for about $50.00.

Yousendit or Drop Box

I use Yousendit to send my video files to my clients.  I can send up to 2GB at a time.  I pay $49.99 a year for this service.  One of the best services I pay for.

UPS BOX (Personal Mail Box)

I have a personal mail box where all my business related mail is sent to. I believe I pay approximately $125.00 a year.  This is also my business address.  Again this is something well worth having.

Video Camera

I purchased my Sony DCR-SX44 Flash memory Handycam Camcorder over two years ago and the camera is still doing its job without a hitch. I think I purchased the camera at that time for about $250.00.  I don’t think they are making this camera anymore but there are plenty of better models from Sony on the market now.  I would expect to pay no less than $200.00 for a decent camera.

Update

I am currently using the Canon VIXIA HFR600 and I am really enjoying it. This might be a camera you want to consider.  The Canon VIXIA HF R700 is the newer model which you also might like.

Digital Camera

My first real digital Camera was a Kodak which I paid around $350.00.  It had 7.1 mega pixels and decent zoom.  It was slightly larger than normal size camera.  This would do for most private investigators.  The high end camera I later purchased ran about $900.00 which was the Canon T3i.  You can get the Canon T6i now for less then I purchased my camera.  You will need a decent camera and it will likely run you around $200.00 to $300.00 unless you decide to go fancy.

Tape Recorder

When I went from micro cassettes to digital I got the Sony ICD-PX820 Digital Voice Recorder but there are less expensive recorders that do a good job.  My wife purchased it for me and if I recall correctly she got it from Wal-Mart for around $60.00.  I looked it up on Amazon and it says it sells for $89.99.  I am sure you can find a decent one for around the price my wife paid.

Covert Video Equipment

I purchase my covert video equipment from Ebay and Amazon.  I avoid the spy stores online as I know they are over charging for the products.  My 808 Key Chain Cameras cost around $10.00 and I usually purchase more than one in case something malfunctions (which you should expect to happen).  Understand that this stuff isn’t made by Sony or Canon.  It is made overseas and there is no guarantee to the quality.  So purchase a few covert cameras.

Memory Cards

You will need memory cards for you video camera and you covert cameras.  Depending on the memory size of your SD cards, the prices can range from $15.00 to $45.00.  I would get minimum 16GB for your video cameras and 4GB to 8GB for your covert video cameras.

External Hard Drive

You will want to back up photos and video from time to time on an external hard drive.  It’s like a huge memory card.  I always worry that my computer will crash and I will lose everything on the hard drive.  So I back up videos and pictures on the external hard drive.  I believe I purchased my 500GB Toshiba hard drive for around $80.00.  There are larger hard drives now for less. The link in this paragraph is an affiliate link to Amazon.

Surveillance Vehicle Tint (assuming you need a surveillance vehicle)

I have had 4 vehicles tinted over my investigative career.  During that time I have paid anywhere between $150.00 (for 3 windows on a Honda Civic) and $250.00 for an entire vehicle.  Expect to pay around $250.00 for window tint. Anything less than that amount is a bonus.

Business Cards

Unless you get something super fancy I can’t imagine that you will pay over $20.00 for business cards.  I think I paid $15.00 for mine.

Brochure

Going off of my memory I think I paid like $15.00 to design my Brochure and another $60.00 or so to print them out on nice paper at Kinkos.  Total of $75.00 for about 75 brochures.

Private Investigation Website

I purchased my domain name for $12.00 (I actually purchased 3 because I was trying to figure out what the name of my company was going to be).

I hosted my website on BlueHost (link to this on the sidebar).  I think I pay about $75.00 a year to host my website on BlueHost.

I purchased the theme for my website from Woo Themes for $30.00 if my memory serves me correctly.

The reoccurring yearly cost for my website is roughly $90.00

Please note that there are free website options available however if you go this route I would use this as a temporary solution.

Tri Pod

Any tripod from Wal-Mart or Amazon will do.  You could easily find one for less than $20.00. A better one like the SunPak Tripod 6000PG will cost a little more but will likely last longer.

Mono Pod

I use a Targus Digital TG-MP6710 67-Inch Camera/Camcorder Monopod which can be found on Amazon for about $10.00.

DC to AC Power Converter

Highly recommended for investigators in order to change equipment with their vehicle.  Should be able to find one for $30.00 at Wal-Mart or Amazon.  The last one I purchased was from Wal-Mart and it has been pretty reliable over the past 6 months.

Printer/Fax/Scanner

I purchased a Canon all in one combo for around $250.00. It allows me to fax (which I don’t use), scan, copy and print.  You can find something less expensive but this is what I paid.

Phone

I use my cell phone as my business phone.  I don’t consider this a business cost because I would have one regardless of having a  business.

Fax

I use Ring Central for my faxing needs.  This might be the last year I use Ring Central as I don’t have much need for faxing.  But if you do I would suggest this services as it is virtual meaning you can receive faxes directly to your computer.  I currently pay about $8.00 a month for this services which comes out to about $96.00 a year.

Misc Office Equipment

You will find yourself needing various types of office equipment which can include printer ink, printer paper, pens, batteries, and whatever else you can think of.   You will likely spend well over $100.00 to get everything you need to get going with your business.

Office Space

If a physical office space is something you are looking for I have would rethink this initially until you develop your business. For me I base my office from my home which gives me no extra expenses.

 

COSTS                   What you will Need

$25.00                   Master Business License

$550.00                 Agency License

$763.71                Errors and Omissions Insurance

$650.00                Laptop Computer (Toshiba Satellite L645)

$50.00                   Dazzle

$49.99                   Yousendit.com (Sending large files)

$250.00                 Sony video camera

$30.00                   Covert video cameras (because you will purchase more than one)

$30.00                   Purchase 2 memory cards; One for the video camera and one for covert camera.

$80.00                   External Hard Drive 500GB

$250.00                 Vehicle Tint (should pay any more than this amount)

$117.00                 Website (that I built myself)

$30.00                   DC to AC Converter (vehicle)

$20.00                   Tri-Pod

$10.00                   Mono Pod

$96.00                   Faxing Service

$100.00                Office supplies (at the very least)

——-                       Cell phone as business phone

_____                   Office Space

$2771.70             Total

Expenses and licensing will vary for everyone but this is a rough estimate of what you may pay to start your investigative business and a very accurate detailing of what I have paid.  I have detailed what a business might need in the past but I wanted to put a price tag on the potential cost you might incur.

This doesn’t account for anything extra like marketing or promotion.  I hit the pavement, emailed and made phone calls when I marketed my business.  I just want to give future investigation agency owners an actual number that starting a private investigation business would cost them.

Thanks for reading,

Andrew

29 comments

  1. Great post.

    Just to point out that here in the UK no licence is required (although this may change.) We are hoping it does, to put off the amatures and their ‘shady’ tactics.

    Love how the North Americans regulate and run their PI industries. Hopefully we’ll use a similar system in the future

  2. Hello,

    Been following your site for a while now. I live in Alabama, and up until June 10, 2013(two weeks), a P.I. license wasn’t required. I want to be a part of this field, so I managed to get into contact with Bill Posey, president of the Alabama Private Investigators Association. He is now my mentor, and he is also head of the regulatory board. After June 10, the bill for it will be signed, and it’ll put a stop to all the con men who prey on people. I want to do it legitimately and legally, and I’m honest as well, so this is a great thing for us. After my training I receive from Bill finishes, I’ll have work lined up with Hardcore Investigations, owned by a former employee of Bill’s. I’m hoping after a year, two, three or so of working there, I can set up my own business in my town, because we have no P.I.s here and I’m sure the local lawyers and insurance offices would love to give business to a local instead of going out of town for it. Anyway, thank you for helping those of us starting out with advice, start-up cost, etc. It’s guys like you, and my mentor, who actually care about the P.I. field and don’t want those just starting to make the same mistakes.

    • Thank you for the thoughtful comment. I wish you much success in your career. Sounds like you are on the right track. Check in and let us know how your career is going.

      Andrew

  3. It was about the same here. But, when it comes to spy cams I have found that it is better to pay little more. I used to use the overseas models. I’ve done a lot of work with law enforcement over the years and they turned me on to LawMate covert cameras. It’s trusted by law enforcement and recognized by the courts, which is only really an issue if the apposing counsel is being a dick. The quality is amazing. It’s as good as my Sony Handycam. They are about $295.00 to $350.00 but they don’t usually break and have a warranty when they do. I’m not a rep I just really love the products, they me look awesome.

    • To be honest I have never heard of a court recognizing one covert camera over another. What I do know is that I have had great success with the covert cameras I have ordered off of Ebay and Amazon. I couldn’t imagine paying over 200 dollars for something I could get for less than 20. And if my 20 dollar camera breaks I just buy a new one.

  4. Thank you so much for this and everything else you do. I am starting a business in NC

  5. Great read! Thanks a lot for sharing your adventures with us. I am a licensed individual in Canada and although some laws are slightly different, the premise is about the same. I really appreciate your info. I will subscribe as I’m trying to start my own biz myself!

    • Eric,

      Thank you for visiting the site. I am glad that the information shared on this site provides some value to you. Let us know when you start your business and share it on the facebook page. Take care Eric.

  6. I am a Former Federal agent considering opening my own agency. This was very helpful. Thanks.

    • Glad to hear it Derek! Let me know if there is a topic I should discuss that hasn’t already been covered. Take care.

  7. Thank you for this very helpful information Andrew. Greetings from the Great State of South Carolina.

    Matt

  8. I live here in WA. I want to start a PI
    business in Seattle. A few questions :

    1. Is it a need in Seattle ?
    2. How do I get attorneys or insurance companies as clients?
    3. How do I figure out how much to charge?
    4. Is it a competitive business in Seattle?

    Hope to hear from you soon. Thanks

    Randy

    • Hi Randy,

      Thank you for the questions.

      1. You must understand that the need to collect information will always be needed somewhere. Clients will come from everywhere and cases will not only be in Seattle. A case may come from a client in Seattle and need to be worked in Spokane. It’s unlike any job you have probably worked in the past.

      2. There is no simple answer to this but I have spoken about it on my podcast. The main thing is trust.

      3. See what others are charging (Via their websites or make calls to them) and aside from that, think of the cost of paying yourself and expenses. What do you think you are worth? What do potential clients think you are worth?

      4. There is competition everywhere.

      I highly recommend listening to my podcast on itunes, stitcher or from my website. I try to provide a great deal of insight into this industry so you have some idea what you will be getting into.

      Andrew

  9. I am in the research phase of opening my agency. I am a licensed PI here in Tampa and have my Class C license, but also have to have an agency license when I decide to open. I was happy to find that I have all the equipment and limo tint listed (and Florida does not require insurance). However, Florida is tough on everything else, lol.

    In the meantime, I was trying to find an answer to the above Question #2…you are correct; there is no easy answer! Trust is, of course, a huge factor. Florida requires several years of background before you may acquire a Class C license, so I have much experience with Criminal Investigations as I got my background for my license through 4 years of Loss Prevention. I was the proverbial “thorn in the side” of every Public Defender in Tampa through my thorough case preparation and witness testimony when attending court cases of shoplifters, lol. Still, I am finding it difficult to make job connections. I really wish I had kept better records of the Public Defenders I defeated in court; I’m sure they would love to have me on their side, lol.

    Thanks for the head’s up on your podcasts, Andrew. I will be sure to take the time to give them a watch; all help at this point is a plus. Thanks for reaching out to help others; this is indeed a competitive business and it is rare that someone who has “been there, done that” reaches out to newbies. Thanks a bunch from sunny Tampa! (Have a great holiday season.)

    • Hi Loraine,

      Thank you for your awesome thoughtful comment. I noticed you stated Florida does not require insurance however your clients may require it. Even as a vendor for another investigative agency you will be required to have insurance.

      To add to your thoughts I would just say make friends in the industry and treat them right. It will go a long way. I still have a connection with investigators that I started with 10 years ago.

      Andrew

  10. Thanks for the head’s up on insurance and that does make sense from the client’s standpoint. Also, I am certainly attempting to make connections locally as well as through LinkedIn. You and I have been connected there for some time; thank you for that. 😉 Keep up the good work.

    Loraine

  11. Dear Andrew,

    I would like to start a home-based investigations business here in my country, Papua New Guinea.

    I would be very much happy if you can contact me on my email for further discussions.

    cheers
    Michael

    • Hi Michael,

      Thank you for commenting. I truthfully don’t know the first thing about starting a private investigation business in another country. Andrew

  12. Its a shame so many people here in the UK go out and set up for free. Sadly, with no licensing in place for private investigators, it is simply a case of a facebook page, camera and a car. Needless to say the results are about as professional as the set up. Unfortunately this leaves the professionals a fight to convince people to pay professional rates for an investigator. The number of times I’ve been told x y and z investigations are cheaper, ” why don’t you use them instead?” the response, “they are no good”

    • $3,000 isn’t really a lot of money when you think of the return on investment. But equipment doesn’t make someone a better investigator. It can surely increase the quality of video.

  13. So I have been in the industry since 2004 while doing criminal Justice in Alabama. I was always entrepreneurial minded and on the suggestion of a professor of mine (former Birmingham commissioner if memory serves) I looked into the investigative field. A lot of what I did I can’t really mention but I did a lot of undercover stuff mostly with assistance from some retired officers. Back then Alabama did not require licensing and it was as easy as going into the court and getting my biz lic. I transferred out of state to MD and the requirements were so tough I couldn’t even dream of meeting them back in 2005/2006. I’m scared as to what it might be now.

    Mystery shopping might seem to “sub par” for some but get the right connections and you are hitting a gold mine. I must say that area helped me through 3 years while at college. I traveled extensively for mystery shops and was doing at least $200/wk. The killer was those reports, great help to make you thorough but a pain in the rear. After getting my name out there and showing quality you get picky and if I got called for a shop less than $20 and more than 10 miles away good luck. I do believe the mystery shopping companies mask investigative work as mystery shops so they can pay less. Much of what I got I would put in the area of financial investigations or asset verification etc.

    Fast forward to 2015 and here I am spending money out the rear trying to get setup in Alabama and Georgia. Due to my negligence I already had my site setup, advertising and flyers like I did years ago to target the firms and bam. Pulled up the regs to re-familiarize myself with the laws to see what has and hasn’t changed and now I’m playing the waiting game and turning down work I cannot legally do until I get that lic. In the course of doing all that I found this site. Great resource. I come here daily faithfully to make sure I am not missing anything. GREAT WORK ANDREW !!

    • Corwyn,

      Thank you for sharing your experiences and I am glad you found the site. I don’t have the answers to everything but there is plenty on here. I recommend listening to the podcast when you have the time (if you aren’t already). Great comment, thank you for taking the time to leave one.

      Andrew

    • Hi Corwyn,
      Can you tell me what reputable mystery shops did you work for while in college. I don’t know how to find the real deals from the fakes lol. And Andrew thanks for this information I have a young man that is looking to open up his own business as a PI. One important question. I saw that you applied for two types of license. Does one have to have some online training to open their own PI business or can they just open the business and start investigating? Just curious Thanks for any help Andrew This is MaryannC. asking this question.

      • Hi Maryann

        I think you are referring to my business license and my professional license. Both of these are required in the state of Washington. I am sure any state that requires a investigator be licensed may require something similar.

        Andrew

  14. One thing I will ad. Many investigators back in the day and today as well run out to purchase what they think they need only not to use it. I remember when I started I bought a camcorder and binoculars as that’s all I could have afforded at the time. As I got assignments that required more stuff it was an easy run to then Circuit City, Radio Shack, Best Buy or PI Mall. Radio shack was a great resource. I always had time if anything required shipping as I always slept on the decision of if I should take a case or not and look at all angles. Learned my lesson when I accepted a case in which I needed help only to find out the client had a restraining order on him setup by the ex wife.

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