How to Start a Background Check Business

Business Overview:

Learning how to start a background check business is a great way to be your own boss and offer a much-needed service to businesses and individuals. Most mid- to large-sized businesses require background checks before hiring new employees. This may include credit checks, criminal history and motor vehicle reports. But corporate businesses are not the only potential clients to look at when you start a background check business. Educational institutions use background checks to ensure new hires can be around children and individuals can order background checks on anyone from a housekeeper to a potential romantic suitor. As you can see, the potential for this business idea is huge. What you should do before starting a background check business is decide what types of services you will offer and what you will charge for those services. You should consider offering packages as well as individual checks. Set up a website that outlines what your business does and what a customer can expect in terms of cost and delivery time. You will need to get a business license and establish relationships with various agencies in the states you will serve. You will be working with credit bureaus, state DMVs and the state police and court system. Since these days much of this type of research can be done online, background checking is one of the best online business ideas you can start. Each state’s background check requirements are different so be sure you are well aware of what is necessary. You may want to start with your home state until you become more familiar with the process, then branch out to other states. As you grow, you could recruit a staff member in each state to assist you with your requests. This would free you up to concentrate on marketing your business. One way would be to contact human resources departments in mid-large businesses in the states you are targeting. Direct mail would be a good first contact, followed up by a personal phone call. If you secure contracts with a few large businesses, that could mean dozens of requests a week.

A Day in the Life of a Background Check Business Owner:

Your day will begin with a check of any new requests that have come in. You will contact the client to discuss their needs and negotiate a suitable deadline. You will then get to work on any ongoing checks by following up with state agencies and gathering information on the Internet. You will compile this information in a clear, easy to read format and send it off to your clients electronically upon final payment. If you have staff working for you, you will check in with them to monitor their progress on various jobs and make sure they deliver the information on time. You will spend some of your day marketing your services to businesses in the states you are serving.

About Your Customers:

Your customers will typically be mid- to large-sized businesses who need quick, accurate background information on job candidates. Your clients may also include educational institutions as well as individuals.

What You Need to Start:

• Business license
• Familiarity with state regulations
• Relationship with state agencies
• Staff (if needed)
• Computer with high-speed Internet access and finance software

The Good:

• The demand for this business will always be high.
• The startup costs are low.
• You can charge top dollar for timely, accurate background checks.
• You can run this business part-time from your home.
• Since the majority of the work is done online, you can work anytime of the day or night.

The Bad:

• It can take awhile to build your client base and start earning a profit.
• If you will be running credit checks, you must have a full understanding of the Fair Credit Reporting Act to protect yourself legally.

Resources:

• National Association of Professional Background Screeners
• Association of Certified Background Investigators
• Wikipedia on Background Checks

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