How do you start a background check business?

You start a background check business by researching the industry, determining a specialization, and obtaining the proper registration, licensing, and permits. According to a study by the Society for Human Resource Management, 87% of employers now opt to conduct criminal background checks on intending employees.

There is a high demand for the services of a background check firm as long as people and organizations continue to recruit new intakes, making the business a lucrative venture. First and foremost, businesses run background checks to help keep their clients, employees, and businesses safe.

Lack of background checks, or poorly done background checks, can lead to horrific crimes. The sad fact is that there are bad people in the world, and they will do bad things. Businesses do not want to experience that and are responsible for protecting their employees and clients.

While you don't need a special skill or college degree to start a background check firm, there are professional certification programs that can boost your business and increase your visibility in the industry. Possible certifications include:

• Association of professional background screeners

• Certified background

• ESR Online Safe Hiring Certification

• Professional License Certificate Verification

You must also understand who your major competitors are in the industry. In the background check industry, some brands have been around for a very long time, including:

• Instant Checkmate

• Spokeo

• Intelius

• BeenVerified

• Core Logic

• US Search

• FindOutthetruth

• PeopleSmart

• PeopleFinder

• KnowX

Once you have done your research, deciding how you want to operate your business is important. There are several different niches within the background check industry, and when you start out, it is a good idea to focus on one and then branch out as your business grows. A few niches include:

• Criminal records or history of violence check

• Credit card verification

• Home-based background check

• Small business background check

• Drug testing

• Confirmation of professional licenses

• Educational records verification

• Past employments verification

• Travelers Background Checking

• Tenant Background Checking

• Franchise Background Checking

• Level 2 FBI Background Checks

Once you have your business plan ready and understand your resources and financial obligations, you can register your business. Registering your business means deciding if you will operate as a sole proprietor, partnership, or limited liability corporation (LLC).

The primary advantage of an LLC is that it reduces your personal financial risk. A sole proprietorship is simple to set up, as is a partnership if you're going into business with other people. However, both of those structures leave you exposed to any financial liability that might come up from operating your business.

Once you have decided how you will operate, it is time to choose a business name. You want something unique and easily identifiable related to the industry or business. Once you have a short list of names, you can go to www.uspto.gov to see if they are available.

In addition to registering your business, you must ensure that you have the appropriate insurance coverage. At a minimum, you will need to have general liability insurance. This coverage protects you if something happens while operating your business.

While not required, it is recommended that you also have the following insurance policies:

• Professional Liability: This helps to pay for work oversights that can result in a financial loss. For example, if someone says you didn't deliver the services you said you would provide, they can ask you to pay for any losses. Professional liability can help cover the costs of defending your business or fixing the problem.

• Intellectual Property Protection: This protects your investments, patents, and company name.

If you are operating a storefront, at a minimum, you will likely need to obtain a Certificate of Occupancy (CO). This confirms that all building codes, zoning laws, and government regulations have been met. If you rent or lease the property, the landlord will be responsible for obtaining and providing the CO.

Once your business is registered and your permits are in place, you can get down to business and start serving your customers.