A background checking business is a company that offers tenant and employment background screenings to consumers, landlords, corporations, and other organizations. A background check service may specialize in reference check services, credit check services, and criminal record check services.

Please note that when carrying out criminal background checks in Florida, employers are expected to be conversant with local ban-the-box laws that may limit how and when criminal record information can be considered in the hiring process. Background checks in Florida are expected to comply with the federal Fair Credit Reporting Act (FCRA). The market size of the Background Check Services industry is $4.0 billion in 2022.

Steps on How to Start a Background Checking Business in Florida  

  1. Conduct Market Research

Conducting market research before starting any business is key to the success of the business hence you must not open a background checking services business without conducting market research. Market research provides critical information about your market and your business landscape. It can tell you how your business is perceived by the customers and clients you want to reach.

It can help you determine who and where your customers are, and which customers are most likely to do business with you. In essence, thorough market research will give you the ability to understand how your target customers think to turn them into regular customers and brand advocates.

a. Who is the Target Market for Background Checking Business in Florida?
  • Blue Chips Companies
  • Insurance companies
  • Courts
  • Corporate Organizations
  • Religious Organizations
  • Political Parties/Politicians
  • Landlords
  • The Government (Public Sector)
  • Schools (High Schools, Colleges, and Universities)
  • Sport Organizations
  • Entrepreneurs and Start-Ups.
b. Is Background Checking Business a Profitable Business in Florida?

Yes, a background checking business is very profitable because there are loads of businesses that depend on the services of these companies. Interestingly, the background check industry experienced encouraging growth in the past year.

c. Are There Existing Niches in the Industry?

Yes, there are niche areas in the background checking services business and they are;

  • Reference check services
  • Credit check services
  • Criminal record check services
d. Who are the Major Competitors?
  • Sentinel Background Checks
  • 3-D Background Screening
  • A1A Global Services Inc.
  • AAA InfoSystems Co.
  • Accurate Background Check Inc.
  • Background Checks Systems, Inc.
  • Background Verification Specialists, Inc.
  • Beacon Background Screening Services, LLC
  • CIC Applicant Background Checks
  • Criminal Research Bureau, Inc
  • Deception Control, Inc.
  • Edge Information Management, Inc.
  • First Advantage Enterprise Screening
  • Tampa Investigative Group, LLC
  • The Report Card Group, LLC
  • Verification Services Inc.
  • Sunshine Research Inc.
  • Softech International, Inc
  • Scott-Roberts and Associates, LLC
  • Wymoo International, LLC.
e. Are There County or State Regulations or Zoning Laws for Background Checking Business in Florida?

Yes, there are county or state regulations or zoning laws for background checking businesses, and players in this industry are expected to work with the existing regulations governing similar businesses in the county or state where their business is domiciled.

Please note that some background checks in Florida are subjected to certain limits within the federal Fair Credit Reporting Act (FCRA). The FCRA mandates all companies to obtain permission from a client before carrying out a background check.

They also need to let the applicant know that the information from a background check can cause him or her to be disqualified from the job, and they will also need to provide applicants with a copy of the reports found on the background check.

f. Is There a Franchise for Background Checking Services Business?

Yes, there are franchise opportunities for background checking services, and here are some of them;

  • Background Screeners of America
  • ApplicantSafe
  • Trusted Employees.
g. What Do You Need to Start a Background Checking Service in Florida?
  • A Feasibility Report
  • Business and Marketing Plans
  • Business Licenses and Permits
  • Office Space
  • Computers, Laptops, and Servers
  • EIN (Employer Identification Number) / Federal Tax ID Number.
  • A Corporate Bank Account
  • Software Apps
  • Employees
  • Startup Capital
  1. Choose a Memorable Business Name

When looking to start a business, before you can begin to file the necessary documents with the constituted authorities or start your website, it is necessary that you come up with a name that you will be recognized with. It is essential that the name you come up with can easily be pronounced, is unique and easily memorable.
Some of the catchy business name ideas suitable for a background checking business are;

Creative Background Checking Business Name ideas
  • Ben Zeal© Background Checking Services, Inc.
  • Moore® Background Checking Services, LLC
  • Green Day© Background Checking Services, Inc.
  • Matt Phills® Background Checking Services, Inc.
  • MJ Greenwood™ Background Checking Services, Inc.
  • Smith™ Background Checking Services, LLC.
  • Cross Check© Background Checking Services, LLC
  • Finger Print® Background Checking Services, Inc.
  • Hilary Jorgen© Background Checking Services, Inc.
  • Kelly Gray© Background Checking Services, Inc.
  • Mike Kester® Background Checking Services, Inc.
  • Union Group® Background Checking Services, Inc.
  • TM Morris® Background Checking Services, Inc.
  • Tripple Check® Background Checking Services, Inc.
  • Nathan Fred® Background Checking Services, Inc.
  • Rowland Hyden© Background Checking Services, Inc.
  • Clem Investigator™ Background Checking Services, LLC
  • Access Group® Background Checking Services, Inc.
  • West Plum® Background Checking Services, Inc.
  • Nile Group™ Background Checking Services, Inc.
  1. Register Your Business

a. What Type of Business Structure is Best for Background Checking Services Business in Florida?

Even though there are several options when it comes to the business structure for a background checking services business, the one that most players in this line of business consider is an LLC. It is common to consider an LLC because providers want to protect themselves from lawsuits.

Please note that an LLC will need an EIN if it has employees or if it will be required to file any of the excise tax forms listed below.

b. Steps to Form an LLC
  • Choose a Name for Your LLC.
  • File Articles of Organization.
  • Choose a registered agent.
  • Decide on member vs. manager management.
  • Create an LLC operating agreement.
  • Comply with other tax and regulatory requirements.
  • File annual reports.
c. What Type of License is Needed to Open a Background Checking Services Business in Florida?
  • General Business License
  • Zonal Permits (Applicable in some cities)
  • Signage Permit
d. What Type of Certification is Needed to Open a Background Checking Services Business in Florida?

You don’t need any special certification to start a background checking service.

e. What Documents are Needed to Open a Background Checking Services Business in Florida?
  • DBA
  • EIN
  • Business and liability insurance
  • Federal Tax Payer’s ID
  • State Permit and Building Approval
  • Certificate of Incorporation
  • Business License
  • Business Plan
  • Employment Agreement (offer letters)
  • Operating Agreement for LLCs
  • Insurance Policy
  • Online Terms of Use
  • Online Privacy Policy Document
  • Contract Document
  • Company Bylaws
  • Memorandum of Understanding (MoU)
f. Do You Need a Trademark, Copyright, or Patent?

If you are considering starting a background checking service, you may not have any need to file for intellectual property protection or trademark.

  1. Cost Analysis and Budgeting

a. How Much Does It Cost to Start a Background Checking Services Business in Florida?

When it comes to starting a background checking services business, the startup costs could range from $5,000 to over $150,000 depending on how big you want to start the business.

b. What are the Cost Involved in Starting a Background Checking Services Business in Florida?
  • The total fee for registering a business in the United States of America – $750.
  • Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines, and other software) – $8,300.
  • Promotion expenses for the grand opening of the business – $3,580.
  • The total cost for the purchase of insurance – $4,400.
  • The cost for renting or leasing operational office space – $45,000.
  • Other start-up expenses include commercial satellite TV subscriptions, stationery ($500), and phone and utility deposits ($2,800).
  • Operational cost for the first 3 months (salaries of employees, payments of bills, et al) – $35,000
  • The cost for the purchase of software apps: $5,000
  • The cost for store equipment (cash register, security, ventilation, signage) – $1,750
  • The cost of purchase and installation of CCTVs: $2,000
  • The cost of launching a website: $2000
  • Miscellaneous: $2,000
c. What Factors Determine the Cost of Opening a Background Checking Service in Florida?
  • The size of background checking business
  • The choice of location
  • The required licenses and permits
  • The type of facility
  • The cost for branding, promotion, and marketing of the background checking service
  • The cost of furnishing and equipping the facility
  • The cost of the insurance policy covers
  • The cost of registering the business
  • The cost of recruiting and training your staff
d. Do You Need to Build a Facility? If YES, How Much Will It Cost?

You don’t need to build a facility for your background checking service because the business can be operated from a leased or rented office space or home office.

e. What are the Ongoing Expenses of a Background Checking Services Business?
  • Utility bills (internet subscriptions, phone bills, signage, and software renewal fees et al)
  • Rent
  • Salaries of employees
f. What is the Average Salary of your Staff?
  • Chief Executive Officer (Chief Investigator) – $45,000 Per Year
  • Human Resources and Admin Manager – $35,000 Per Year
  • Background Checking Expert – $35,000 Per Year
  • Accountant – $32,000 Per Year
  • Marketing Sales Officer – $32,000 Per Year
  • Client Service Executive (Help Desk Office) -$28,000 Per Year
g. How Do You Get Funding to Start a Background Checking Business in Florida?
  • Raising money from personal savings and sale of personal stocks and properties
  • Raising money from investors and business partners
  • Sell shares to interested investors
  • Source for soft loans from your family members and friends.
  1. Write a Business Plan

a. Executive Summary

Shannon Parker© Background Checking Services, Inc. is a registered and licensed background checking service. The business will be based in West Palm Beach, Florida. We were able to secure a standard office facility in one of the most patronized office complexes in West Palm Beach.

We are well equipped to provide top-notch background checking services throughout West Palm Beach and beyond. It is our goal to offer low rates, reliable and fast courteous service to our valued customers.

b. Products and Service
  • Reference check services
  • Credit check services
  • Criminal record check services
  • Pre-employment services, including background checks
  • Other background check-related services.
c. Mission Statement

Our mission is to provide professional and trusted background check services that will assist individuals, businesses, and non-profit organizations. We will position the business to become the leading brand in the background check services industry in West Palm Beach, and also be amongst the top 5 background check services outfits in Florida within the first 10 years of operation.

Vision Statement

Our vision is to build a background checking service that will become the number one choice in West Palm Beach, Florida.

d. Goals and Objectives

The goals and objectives of the background checking services business are to provide standard and professional background check services.

e. Organizational Structure
  • Chief Executive Officer (Chief Investigator)
  • Human Resources and Admin Manager
  • Background Checking Expert
  • Accountant
  • Marketing Sales Officer
  • Client Service Executive (Help Desk Office)

Marketing Plan

a. SWOT Analysis
Strength:
  • Effective structure in place
  • Highly experienced and qualified employees and management
  • Reliable software app
  • Support from relevant organizations
  • Water-tight strategies on how to expand beyond the major markets.
Weakness:
  • Financial Constraints
  • A new business that will be competing with well-established background checking services businesses
  • Inability to retain our highly experienced and qualified employees longer than we want
Opportunities:
  • Partnerships and mergers between established companies.
  • Good support structure for background checking services businesses in Florida.
Threat:
  • The arrival of a new background checking service within our market space
  • Unfavorable government policy and regulations.
  • Differences in management and culture are the biggest barriers to integrating background checking services business startups into traditional companies
  • Liability problems
  • Continuously changing consumer demands especially as it relates to how they expect background checking services businesses to serve them.
b. How Do Background Checking Services Businesses Make Money?

Background checking services make money by charging clients for services such as tenant and employment background screenings, reference check services, credit check services, and criminal record check services.

c. Payment Options
  • Payment via bank transfer
  • Payment with cash
  • Payment via credit cards
  • Payment via online bank transfer
  • Payment via check
  • Payment via mobile money transfer
d. Sales & Advertising Strategies
  • Introduce your background checking service by sending introductory letters alongside your brochure to corporate organizations, small business owners, landlords, and other key stakeholders throughout the city where your background checking business is located.
  • Advertise on the internet on blogs and forums, and also on social media like Twitter, Facebook, and LinkedIn to get your message across
  • Create a basic website for your business to give your business an online presence
  • Directly market your services
  • Advertise your business in community-based newspapers, local TV and radio stations
  • List your business on yellow pages ads (local directories)
  • Encourage the use of word-of-mouth marketing (referrals)

Financial Projection

a. How Much Should You Charge for your Service?

The amount a background check services charge will depend on the type of services. For example, if a client decides to get a criminal history report from the Florida Department of Law Enforcement, it will cost $24. However, it will not include all the different types of background information that you might need for your applicants.

b. How Much Profit Do Background Checking Services Business Owners Make a Year in Florida?

A background checking business owner in Florida will make between $40,000 to over $100,000 per year.

c. What Factors Determine the Amount of Profit to Be Made?
  • The capacity of the background checking service
  • The location the background checking service is covering
  • The management style of the background checking service
  • The business approach of the background checking business
  • The advertising and marketing strategies adopted by the background checking services
  • The number of years the background checking service is in business
d. What is the Profit Margin of a Background Checking Services Business?

The profit margin of a background checking service is not fixed. It could range between 40% to 75%.

e. What is the Sales Forecast?

Below is the sales forecast of a background checking business. It is based on the location of the business and other factors as it relates to such startups in Florida;

  • First Fiscal Year (FY1): $350,000
  • Second Fiscal Year (FY2): $480,000
  • Third Fiscal Year (FY3): $600,000
  1. Set Up your Office

a. How Do You Choose a Perfect Location for Background Checking Service in Florida?
  • The demography of the location
  • The demand for the services of background checking services in the location
  • The purchasing power of businesses and residents of the location
  • Accessibility of the location
  • The number of background checking services in the location
  • The local laws and regulations in the community/state
  • Traffic, parking and security et al
b. What City is Best to Open a Background Checking Services Business in Florida?
  • Tallahassee, Florida
  • Pensacola, Florida
  • Bradenton, Florida
  • Jacksonville, Florida
  • Pompano Beach, Florida
  • Hialeah, Florida
  • Riverview, Florida
  • Fort Lauderdale, Florida
  • Miami, Florida
  • Saint Cloud, Florida.
c. What Equipment is Needed to Operate a Background Checking Services Business?

You should be prepared to purchase software applications, computers/laptops, servers, internet facilities, telephone, fax machines, and office furniture (chairs, tables, and shelves) amongst others, and all these can be gotten as fairly used.

  1. Hire Employees

When it comes to hiring employees for a standard Background checking services business, you should make plans to hire a competent Chief Executive Officer (Chief Investigator), Human Resources and Admin Manager, Account Manager, Marketing and Sales Officer, Background Check Experts, and Client Service Executive (Help Desk Office).

  1. Launch the Business Proper

No background checking services business opens its door for business without first organizing an opening party to officially launch the business. With a proper launching of the background checking business, you will inform people in your city that your background checking service is open for business.

a. What Makes a Background Checking Services Business Successful?
  • Ability to identify good deals
  • Willingness to take chances
  • Tenacity
  • Customer-centric business approach
  • Good marketing and sales approach
  • Strong vision
  • Passionate leadership
  • Innovative
b. What Happens During a Typical Day at a Background Checking Services Business?
  • The office is open for the day’s work
  • The To-do list is reviewed
  • Employees go straight to their job description (conducting background checks)
  • Marketers go all out to market the service offerings of the company
  • Reports are written and submitted to superior officers
  • The business is closed for the day.
c. What Skills and Experience Do You Need to Build a Background Checking Business?
  • Excellent investigative skills
  • Excellent marketing skills
  • Excellent computer skills
  • Ability to Pay Attention to Details
  • Good managerial and human development skills
  • Good Accounting and Bookkeeping Skills
  • Visionary Leadership
  • Team-building & Interpersonal Skills.
  • Excellent communication and negotiation skills.
  • Organizational skills.
  • Problem-solving ability.
  • Good Supervisory skills
  • Experience in managing background checking business
  • Experience in business administration
  • Experience in handling relevant software.