How to Start a Fingerprinting Business
Fingerprinting is a growing concept that is more frequently used for numerous identification purposes, heightening the industry’s demand. So, starting a fingerprinting business can be a successful and lucrative opportunity.
In many situations, fingerprints are needed for an in-depth background check—such as for employment background checks and preparing for international travel. And as a bonus, starting a fingerprinting business has low startup costs, making it a business that quickly turns a profit.
A fingerprinting business records an individual’s fingerprints using ink and paper or a live scan using an electronic machine. The first method involves ink and paper. The second is a digital method that takes a picture, or scan, of the fingerprints. This second method is more commonly used today. After collecting the fingerprints, the business submits the prints to various agencies that perform background checks.
One of the perks of a fingerprinting business is its location flexibility. The business can operate from a permanent physical location or as a mobile business. Often, mobile businesses charge an additional fee to account for the travel costs.
Many fingerprinting businesses also diversify by offering related services, such as notarizing documents, to increase overall business income.
In 2022, the U.S. had approximately 1,106 businesses that provided background check services—4.6% fewer businesses than the previous year. Fingerprinting enterprises are similar to background check services because they give fingerprint stamps or scans to fulfill background checks. As such, many trends that background check services follow also affect fingerprinting businesses.
However, despite the decreased number of businesses, the industry increased revenue in 2022 by 5%. As a result, the background check services industry generated $4 billion in 2022.
Background Check Business
The demand for fingerprinting and background checks often follows employment rates. This is because many employers perform background checks before hiring. So, as hiring increases, then background checks will increase too. However, this same trend applies in the reverse—as hiring slows, fingerprinting businesses may also see reduced demand.
In this digital age, electronic fingerprinting will likely see continued growth. It is a security method that is becoming more common for everyday safety. For instance, many smartphones use fingerprint scans to unlock the device or make purchases.
Despite the expected growth, fingerprinting businesses also face some challenges. For example, competition and high regulations are two barriers that make this industry tough. First, competition makes starting any business difficult, especially if your area is already saturated with fingerprinting businesses.
In addition, high regulations exist to protect private, personal data. The penalties and fines are steep for failing to meet the rules, making the business a higher-stakes endeavor.
Fingerprinting businesses appeal to specific groups since it is not a routine, everyday service. Here are some of the markets that benefit from a fingerprinting business:
Government agencies. Different government offices utilize fingerprinting for specific licenses or permits. For example, applying to become a foster care family or adopting a child typically requires fingerprinting background checks.
Companies. As part of the hiring process, companies may use fingerprinting as another level of security in their background checks. Some occupations regularly require fingerprinting background checks, such as financial (Financial Industry Regulatory Authority (FINRA), security, healthcare, and working with minors (i.e., education). As such, contracts or retainers with companies that hire often can lead to regular income for your business.
Travel. Travel agencies are another market to focus on because sometimes a background check with fingerprinting is required for travel. For example, some countries need a fingerprint background check to allow entry.
Checklist for Starting a Fingerprinting Business
Starting a fingerprinting business successfully requires advance planning and preparation. Researching the industry, developing a business plan, securing funding, and obtaining necessary licensing are just a few of the integral steps in starting your own fingerprinting business.
So, whether you’re still in the planning stages or are ready to hit the ground running, be sure to read on for some valuable tips.
Step 1: Write a Business Plan
If you’re thinking of starting a fingerprinting business, one of the first things to do is write a business plan. A business plan will get all the thoughts of what you think you should do and help give a clear roadmap for how to start and grow your business.
It’s important at this stage to research your local area and interests to determine what types of fingerprinting services to offer, as licensing requirements vary. Some of the different types of fingerprinting include:
– FBI Background Checks
– Ink Fingerprinting
– Live Scan Fingerprinting
– State Law Enforcement / Department of Justice
The business plan is also important if funding is needed as well.
But most importantly, a business plan will force you to think carefully about your goals and how you plan to achieve them. What kind of services will you offer? How much will you charge? How will you market your business? These are all important questions that a business plan can help you answer.
Related: How to write a business plan
Step 2: Name the Business
Finding the perfect name for a business can be challenging. Not only does the name have to resonate with your customers and be memorable, but it also has to be available to use.
Related: Tips on naming a business
Step 3: Form a Business Entity
A business entity (also referred to as a business structure) refers to how a business is legally organized to operate. There are four primary business structures to choose from, which include the sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). Each type of entity has its own pros and cons, such as liability exposure, costs, and administrative requirements.
When deciding on which business entity is best for a fingerprinting business, it normally comes down to the sole proprietorship and Limited Liability Company.
A partnership opens the owners up to unnecessary personal liability because if a partner does something to get the business sued, or runs off with cash from the business, the other partners are personally liable to repay.
The corporation can be a good choice to minimize liability risk because it separates the business assets from the owner’s assets. If the corporation is sued or certain business debts can’t be paid back, the owners aren’t personally responsible to repay them. The downside to the corporation is that it is more complicated than all the other entities and requires more administration than the LLC. If you plan on raising a lot of investment though, the corporation is usually the better choice.
That leaves the sole proprietorship and LLC.
The sole proprietorship is the least expensive and easiest entity to start which is appealing. The downside is that the owner is personally liable should anything happen to the business, which is an important consideration. The LLC offers the ability to operate as a sole proprietorship with the liability protection of a corporation. Depending on the state, the cost to form an LLC runs from $40 – $500, which is pretty inexpensive for protecting the owners from business-related lawsuits and certain debts.
Related: Guide to forming your LLC
Forming an LLC sounds complicated and expensive, but using an entity formation service guides you through the process so you know it was done right.
Some popular LLC formation services include:
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Step 4: Select Your Location
An important decision for a fingerprinting business is its location.
Will you be mobile or operate out of a storefront? Solely operating a fingerprinting business may be difficult to justify the cost for an entire storefront, especially if there is established competition in your area, but you can look at adding other additional services such as notary public, shipping, DMV, etc. to make up the difference. Another option would be to see if a business that offers ancillary services would entertain renting you a small section of their storefront.
Related: Choosing a business location
Step 5: Apply for Business Licenses and Permits
In addition to regulations from the FBI and the Department of Justice, every state has different requirements before fingerprinting services can be offered. Typically a background check will be required, in addition to training and certifications.
In addition to fingerprinting specific licensing, there are also general business registrations that may be needed which could include; a business license, sales tax permit, Employer Identification Number, and more.
Related: Common business licenses, permits, and registrations by state
Step 6: Find Financing
Coming up with a good business idea and having the skills to run it are one thing, but getting the funding to start a fingerprinting business is another. Fortunately, the cost to start a new fingerprinting business is relatively low; however, funding to start a business can be difficult. Banks are typically going to want the borrower to have good credit and be able to invest 15-25% of their money towards the total start-up costs.
Step 7: Open a Business Bank Account
Keeping your small business and personal finances in separate bank accounts is important to track the income and expenses of your business and identify trends.
Many banks offer free business checking accounts, so be sure to find a cost-effective option for your business.
Step 8: Get your Marketing Plan in Place
There are many ways to market a new fingerprinting business, but sometimes it takes some trial and error to make it effective at bringing in new customers.
Traditional methods such as newspaper ads, flyers, and word-of-mouth can be effective, but may reach a limited audience. Social media can be used to reach a larger audience more quickly. Using social media platforms such as Facebook, Twitter, and LinkedIn is free, it does require putting time in consistently to work.
Another effective way to market your business is to partner with local organizations that serve the same target market. For example, if you are targeting businesses, you could partner with a Chamber of Commerce. or partnering with local law enforcement agencies or private security firms; to get referrals.
Related: Low-cost ideas to market a new business
Every business is going to need a logo. Make a professional logo in no time with the free logo makers from BrandCrowd and Canva.
Step 9: Get Business Insurance
When starting a fingerprinting business, it is important to make sure that you are properly insured.
First, you will want to research any requirements in your state. It’s common that in order to be able to provide fingerprinting services, state licensing is dependent on holding general liability insurance.
Data breach or cyber liability insurance can help protect against a customer’s losses from using your service, especially as biometric scanning is becoming more prevalent.
You will also want to consider business property insurance to protect your equipment and supplies in case of theft or damage or commercial auto insurance if you are using a vehicle for business purposes.
Step 10: Set up Software
Software needs will vary depending on what services are being offered. Running a business focusing on rolled ink fingerprinting may not need a lot to operate, however live scan fingerprinting will need a specific software to process the digital fingerprint capture.
Common Questions When Starting a Fingerprinting Business
How much does it cost to start a fingerprinting business?
A fingerprinting business has a low startup cost, especially a mobile business. You should expect to spend around $1,500 for a mobile business and about $20,000+ for a brick-and-mortar business. Here is a breakdown of some of your main expenses.
Business formation costs. Your business formation costs include licenses, permits, and insurance. These three things are essential for starting your business legally and keep you protected from liabilities.
Each state regulates licenses and permits, but generally, the price remains below $1,000. Check your state’s website for small businesses to determine the cost in your state.
Insurance varies depending on the level of risk that your business is exposed to. A helpful way to compare quotes is to contact an insurance agent or a few insurance companies to find a policy with good coverage for a fair price.
Location. A physical location, such as an office, increases your initial costs because you need to account for rent, utilities, and office furnishings. Commercial office space fluctuates based on location but typically ranges between $20 – $50 per square foot per year. So, for example, a 1,000-square-foot office space at $20 per square foot costs $20,000 yearly.
Expect to budget a few thousand dollars on office furnishings for an office space. However, you can save money by purchasing second-hand furnishings and keeping the décor minimalist.
Travel costs. As a mobile business, you eliminate annual lease costs, utilities, and office furnishings. Instead, you will need to budget for a reliable car, maintenance, and fuel costs.
For example, let’s say gas is $5 per gallon, and your car gets 20 miles a gallon. If you drive 100 miles daily, you spend $25 per day on fuel costs. So you could easily spend $500 per month driving five days a week.
Equipment. The main equipment required for your business includes ink, fingerprint rollers/paper, and live scanners. Ink and paper generally have a low cost, but a live scanner costs between $500 – $9,000. Depending on the services offered, you want to make sure the equipment is either FBI certified or on an approved FDLE vendor list.
Employee wages. Employees allow your business to serve multiple customers at a time—the average hourly rate for a fingerprinting technician is $14 per hour in the U.S., which is the equivalent annual salary of $29,040.
How profitable is a fingerprinting business?
A fingerprinting business can earn over $100,000 per year. Let’s break it down.
Fingerprinting businesses earn money for several services. Firstly, a rolling fee is the charge for performing the live scan or the ink prints. In addition to the rolling fee, the fingerprinting business may also charge for ink fingerprint cards or travel fees.
Rolling fees can vary from business to business, but commonly the rate is around $15 – $40. So, let’s go back to our figure of $100,000 per year. If you charge $40 per customer and see 10 customers daily, you earn $400 per day or $2,000 per workweek. At this rate, your business makes $104,000 annually (52 weeks).
Are there grants to start a fingerprinting business?
It’s extremely rare to find a grant to start a fingerprinting business. If you search for business grants, you will come across a lot of scams and misinformation. Occasionally an organization will offer grants to start a business, however, be skeptical and don’t provide any sensitive personal information or pay money to get more information.
Legitimate federal grants can be found at Grants.gov, and you can check on your state’s economic development office to see if they have any grants available.
What Skills Are Needed to Run a Fingerprinting Business?
A fingerprinting business doesn’t require a particular degree, but it does require that you follow specific regulations and laws to ensure privacy and data security.
Professionalism and privacy. Some states have stringent rules and regulations that dictate how you can collect fingerprinting data. So, it’s best to have a solid understanding of the appropriate laws.
In addition, taking a record of someone’s biometric data requires professionalism. Your clients want to be secure and trust their data is safe with your business. So, having a well-rounded knowledge of federal and state laws and communicating that knowledge to your clients shows professionalism and builds trust.
Organization. Organization is an important skill in managing client appointments, data, and communication with the agencies that require fingerprinting results. This skill also includes staying updated on software changes, regulations, and equipment updates.
Marketing. Marketing is helpful for a fingerprinting business because it helps you efficiently sell your service to ideal markets. In addition, efficient marketing saves you time and money and brings your business quality clients. Marketing through advertising, making network connections, or forming a solid online presence are all essential ways to build up your business.
What is the NAICS code for a fingerprinting business?
The NAICS code for a fingerprinting business is 561611.
The NAICS code (North American Industry Classification System) is a federal system to classify different types of businesses for the collection and reporting of statistical data.
Related: What is a NAICS code?
A fingerprinting business can be started for minimal costs, making it a great opportunity to start quickly and earn money quickly. However, the repercussions for violating the regulations make it a challenging business to start. So, first, get a solid understanding of the regulations around fingerprinting, then you can confidently provide your services and grow into a thriving business.
how do i get my fingerprinting business license?
Hi Herschel – Every state has different requirements, and many are regulated through the state law enforcement or department the oversees professional regulations. Normally, you can do a search with the name of your state and then fingerprint business license and the first state or .gov website will have the legitimate information you need. If you are still stuck, let me know what state you are in and I can hunt that down for you.