How to Start a Background Check Business in California
- 1). Create a business plan to organize the business and to apply for financial loans. All new businesses are required to provide a business plan to lenders and government agencies when seeking financial assistance. A business plan defines, organizes and clarifies financial expenditures.
The writing and research process involved in creating a business plan also helps business owners uncover hidden expenses, legalities and other business specific factors that can affect the success of a business. The Governor's Office of Economic Development offers assistance in creating a business plan. Background check businesses can receive business start-up assistance by contacting the office of Economic Development at 877-345-463 or 916-322-0694. - 2). Review and comply with all federal and California regulations pertaining to background check investigative businesses. California requires background check investigators to be licensed. Investigators must apply for an investigator's license and pass a criminal background check before conducting any type of background check in California. The California Bureau of Security and Investigative Services oversees investigative licensing requirements in California. Background check investigators must obtain an investigator's license application and set-up an appointment for a fingerprinting background check and a criminal background by contacting the Bureau of Security and Investigative Services at 916-445-7724 or 800-952-5210
Federal and state governments have privacy laws and all background check business must comply with these statues. The federal government does not require a specific federal license for background check investigators, but it does require background businesses to follow federal privacy laws. Many background check services involve procedures that will require an understanding of federal privacy laws such as the federal Fair Credit Reporting Act (FCRA). FCRA requires investigators to report accurate consumer credit and personal data information and establishes guidelines on how to do it.
In addition, fingerprinting background checks in California require background check investigators to pass a criminal background check and obtain a fingerprint-rolling certificate from the California Department of Justice. A California background check business must have a licensed investigator with a valid fingerprint-rolling certificate to conduct fingerprinting background checks. To become a private fingerprinting background check provider contact the California Department of Justice at 916-227-3332. - 3). Select a location. When selecting a location consider price and the business's customer demographic. For example if the business plans to provide attorneys and other professional organizations with background checks an office near a court house or legal district maybe preferred.
The owner of a background check business that will conduct employment background checks and landlord background checks may choose to work out of her home if clients do not visit her offices or she has an Internet presence. Choosing a location will depend on the type of business model selected for the background check start-up. - 4). Purchase business insurance. Business insurance is required when renting business space and applying for business permits. Business Insurance also protects a business owner's personal assets from litigation. To find an experienced insurance agent who specializes in business insurance coverage contact your personal insurance agent for a referral.
- 5). Get funding and set up general business operating procedures. If a proper business plan has been completed, a new background check business will have an understanding of the general requirements of running a business in California. Submit loan and grant applications for financing. Purchase office supplies needed to conduct background checks such as computers and Internet services. A good accounting software package is required to keep track of expenses and collect tax information. Contract vendors such as accountants and database search services to search public records. Also, hire any needed employees for the business.
- 6). Open the background check business. Once the government approves all required licenses and permits, a background check business can open its doors, implement its advertising and seek customers.