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How To Start A Fingerprinting Business In 2023

How To Start A Fingerprinting Business In 2023

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How To Start A Fingerprinting Business In 2023

How To Start A Fingerprinting Business

Fingerprinting is a significant aspect of modern life that is being used more frequently for numerous identification purposes, heightening the industry’s demand. As such, starting a fingerprinting business can offer many opportunities for entrepreneurs looking to make an impact in this exciting field. And as a bonus, starting a fingerprinting business has low startup costs, making it a business that quickly turns a profit.

However, establishing a successful venture in this industry requires more than just mastering the technical skills associated with fingerprinting. This article aims to help you better understand what is required and be a guide to help in starting your fingerprinting business.

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Business Description

A fingerprinting business offers a variety of services, such as capturing, storing, and analyzing fingerprints for individuals or organizations. These services can be utilized for various purposes, such as employment background checks, security clearance, personal identification, immigration documentation, and criminal investigation.

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.

Industry Summary

The fingerprinting industry forms a significant part of the broader background check services market. According to IBISWorld, the US background check services industry has been growing at 2.1% annually and is expected to reach $4 billion in 2023.

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 reverse—as hiring slows, fingerprinting businesses may also see reduced demand. Even if hiring does slow down, in this digital age, electronic fingerprinting will likely grow. It is a security method that is becoming more common for everyday safety.

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.

Target Market

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 To Start A Fingerprinting Business

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Starting a fingerprinting business successfully requires advanced 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: Research the Market & Regulations

Before starting a fingerprinting business, it’s important to conduct thorough market research to ensure there is sufficient demand for your services and to understand the regulations governing this type of business.

Market research can help determine the potential size of the market, identify target customers, and give insights into the competitive landscape. It provides crucial information to help you make informed decisions about your business strategy, including pricing, marketing, and operations.

Understanding regulations is also critical, as the fingerprinting business is heavily regulated. Non-compliance can lead to penalties, fines, or even the shutting down of the business. Being aware of these regulations can help you strategize how to navigate them successfully.

Researching potential customers: Researching potential customers and demand involves several strategies. The aim is to understand whether there are enough individuals or organizations in your target area that require fingerprinting services.

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

Local business directories: Local business directories can give a sense of the number of businesses in your area that might need fingerprinting services. Look at the number of companies in industries such as healthcare, finance, education, and government, as these sectors often require fingerprinting for background checks.

Observation and fieldwork: This involves visiting public places like courts, government offices, and corporate offices, observing the demand for fingerprinting services, and speaking with professionals who use these services.

Online forums and social media: Online platforms like LinkedIn, Reddit, or industry-specific forums can provide insights into the challenges businesses face when accessing fingerprinting services. This can help identify potential gaps in the market that your business could fill.

Consult with industry experts: Reach out to individuals who already run fingerprinting businesses or consultants in the industry. They can provide insights from their experiences and help you understand the customer landscape better.

Government and law enforcement agencies: Contact your local law enforcement agencies or government offices to understand their current procedures and potential demand for private fingerprinting services.

By researching and understanding your potential customers, you can design a business model that caters to their needs effectively, ensuring the success of your fingerprinting business.

Step 2: Write a Business Plan

A business plan is a roadmap that outlines your business goals and how you plan to achieve them. It’s an essential tool in starting a fingerprinting business for several reasons.

First, 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.

Second, a business plan is a crucial communication tool. It helps you articulate your vision and strategy to potential partners, employees, and most importantly, to potential investors and lenders. A well-crafted business plan demonstrates that you have a sound understanding of the fingerprinting business and a clear plan for success, making it more likely that these stakeholders will support your venture.

Related: How to write a business plan

Step 3: Secure Funding

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 of starting 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.

Related: Finding the money to start a business

Step 4: Set Up Your Facilities

Once you’ve secured the money to start your fingerprinting business, the next step is to set up your facilities.

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 to add additional revenue, 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: Register the Business

To start and legally operate a fingerprinting business, several steps need to be taken to register the business. It’s important to note that the process and requirements for registering and legalizing a business vary significantly by state.

Determining your business structure: The business structure you choose will have legal and financial implications, and the best choice will depend on your specific circumstances. For fingerprinting businesses, a common structure is the Limited Liability Company (LLC) because it provides the owners with protection from personal liability while offering flexibility in management and potential tax benefits.

Related: Comparison of business structures

Business name registration: After registering the business structure, you may need to register your business name. This process will vary depending on what business structure you pick. Sole proprietors and partnerships will often be required to register a “Doing Business As” (DBA), while corporations and LLCs register with the state during the formation process.

During this time, it’s also a good idea to check if the name you want is available as a web domain, even if you’re not ready to set up a website yet.

Related: Finding a domain name for your business

Fingerprinting specific regulations: Given the sensitive nature of fingerprinting services, your business will be subject to specific regulations. The owner and any employees may need to undergo a background check and obtain certifications to operate fingerprinting equipment. Furthermore, fingerprinting businesses must comply with state and federal privacy laws due to the nature of the data they handle.

General business licenses and permits: In addition to industry-specific requirements, there will also be general registration requirements as well. Typically you will need to obtain a local business license, sales tax permit, and Employer Identification Number, but the requirements vary widely by state, so it’s essential to check with your local and state government offices.

Related: Common business licenses, permits, and registrations by state

Step 6: Purchase Fingerprinting Equipment and Supplies

Setting up a fingerprinting business requires a careful selection of equipment and supplies, as these can directly impact the quality of your services and your operational efficiency. Essential equipment includes fingerprint scanners, ink pads for traditional fingerprinting, high-resolution printers, and secure storage solutions for both digital and physical data. If you’re setting up a mobile unit, ensure your equipment is portable and rugged enough to withstand travel.

Before making a purchasing decision, consider factors like product quality, technical support, warranty, and supplier reliability. Also, given that technology in the fingerprinting industry evolves rapidly, choose equipment that is upgradeable or has a reasonable lifespan to ensure your investment remains valuable over time.

As a tip for those setting up their first fingerprinting business, consider starting with the essential equipment and gradually investing in more advanced or additional equipment as your business or demand grows. Also, always prioritize quality and reliability over cost, as downtime or poor-quality results can negatively impact your business reputation.

Step 7: Create a Marketing Plan

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.

To begin with, it’s crucial to have a well-designed website that clearly communicates the services you offer, your qualifications, and how potential customers can reach out or book appointments. Search engine optimization (SEO) is key for increasing visibility and getting traffic to your website. Similarly, local SEO strategies can be highly effective for targeting customers in your specific geographical area. Paid online advertising, such as Google AdWords, can also be beneficial in driving more traffic to your site.

Social media platforms, including LinkedIn, Facebook, and Instagram, can be utilized to engage with the community, share insights about your industry, and highlight the unique value your business offers. Regular posting and engagement can help you build a strong online presence and reputation.

Networking is another powerful marketing strategy. Join the Chamber of Commerce, and attend industry events, local business gatherings, and community functions to build relationships and make your services known. Partnerships with businesses and institutions that require fingerprinting services, such as schools, private security services, corporations for employee background checks, and real estate agencies for tenant screenings, can also help to increase your customer base.

In marketing your fingerprinting business, remember that it’s not just about attracting customers but also about building relationships and establishing your reputation as a reliable, professional service provider.

Related: Low-cost ideas to market a new business

Step 8: Prepare to Launch!

As you get closer to launch, several remaining steps may still need attention. Each business will have different needs, but some common ones include:

Business insurance: This is crucial for protecting your business against potential liabilities. Depending on your business structure and state regulations, you may require specific insurance policies, such as general liability insurance, professional liability insurance, and property insurance.

We recommend getting three quotes, including local insurance agents and online providers like Coverwallet or Hiscox to get the best coverage and price. 

Setting up bookkeeping: An organized bookkeeping system is vital to track your income, expenses, and overall financial health. You can use software solutions like Wave Accounting (FREE) or Quickbooks or hire a bookkeeping service.

Contracts: Having written agreements in place is key for outlining the terms and expectations of your services. In the fingerprinting industry, this might include service contracts for corporations or institutions that require regular fingerprinting services, confidentiality agreements due to the sensitive nature of the data you handle, and vendor contracts with your equipment suppliers.

RocketLawyer and Law Depot have free 
and inexpensive templates that may be helpful.

Hiring Employees: If you plan to hire fingerprint technicians to assist with the business, hiring individuals with proper training, certification, and meticulous attention to detail is key. Also, don’t overlook soft skills, as your employees should demonstrate strong customer service abilities in addition to technical competence.

Opening a bank account: A separate business bank account helps to keep your personal and business finances separate, making tax filing and financial management easier.

Setting pricing: Research your market and competitors to set competitive prices for your services. Ensure your pricing covers your costs and allows for a reasonable profit margin.

Accepting credit cards: Setting up a system to accept credit cards can increase your payment options and make your services more accessible to clients. This usually involves setting up a merchant account. Some popular services include Square or Stripe.

Preparing for the grand opening: Planning a grand opening event can be a great way to draw attention to your business. Consider inviting local businesses, community members, and potential clients.

Remember that the specific needs of each business can vary greatly. However, these steps are common to most new businesses and are important to consider as you prepare to start your fingerprinting business. By taking care of these details, you can lay a solid foundation for your business and pave the way for successful operations.

This material is property of StartingYourBusiness.com

Greg’s Tip: Fingerprinting businesses are heavily regulated, and failure to comply with all legal requirements can lead to fines or business closure. Stay updated on all applicable laws and regulations, and ensure you have all necessary licenses and certifications.

Greg's Business Tip

Common Questions When Starting a Fingerprinting Business

How much does it cost to start a fingerprinting business?

Starting a fingerprinting business requires careful financial planning to ensure you have sufficient funds to cover various startup expenses and operating costs.

A fingerprinting business has a low startup cost, especially a mobile business. You should expect to spend a minimum of $2,000 plus vehicle for a mobile business and $20,000+ for a brick-and-mortar business.

Here is a breakdown of some of the main expenses.

Licensing and permits: Costs for obtaining necessary licenses and permits can range from $500 to $2,000, depending on the jurisdiction and local requirements.

Equipment and supplies: 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 Federal Bureau of Investigations certified or on an approved FDLE vendor list.

Office setup: This includes furniture, computers, printers, filing cabinets, security systems, signage, and other office essentials, which can amount to around $2,000 to $5,000.

Initial rent and utilities: Consider monthly rental costs for a suitable workspace, which can vary based on location but may range from $500 to $2,000 per month. Utility deposits such as electricity, water, and internet services can add an additional $200 to $500.

Marketing and advertising: Allocate funds for promoting your business through online advertising, printing brochures, business cards, and other marketing materials. An initial monthly budget of $500 to $2,000 is a reasonable estimate.

Insurance: General liability insurance, professional liability insurance, and workers’ compensation insurance may be required, costing approximately $1,000 to $2,000 annually.

Miscellaneous expenses: Include expenses for office supplies, maintenance, bookkeeping, software, or other costs. Allocate at least $500 to $1,000 per month for miscellaneous expenses. it is recommended to have a buffer of three to six months of operating expenses on hand to sustain your business during the initial stages.

How profitable is a fingerprinting business?

The profit a fingerprinting business owner can make varies based on several factors, such as location, competition, pricing strategy, and more.

One common formula used in the fingerprinting industry to estimate profit is by calculating the profit margin. The profit margin is the ratio of profit to revenue and is expressed as a percentage.

Let’s consider an example calculation:

Revenue: The cost of fingerprinting varies depending on the type of service, the state, and the agency. A standard live scan fingerprinting fee is typically between $10 – $35. In this example, suppose the average price charged per fingerprinting service is $20, and the business conducts ten sessions per day over 50 weeks, which totals 2,500 fingerprinting sessions in a year.

Revenue = Price per Service x Number of Sessions
Revenue = $20 x 2,500
Revenue = $50,000

Expenses: Assume the total annual operating expenses, including rent, utilities, marketing, insurance, software, and miscellaneous expenses, amounting to $10,000.

Profit: To calculate the profit, we subtract the total expenses from the revenue.

Profit = Revenue – Expenses
Profit = $50,000 – $10,000
Profit = $40,000

In this example, the fingerprinting business owner achieved a profit of $40,000, but it’s important to note that this is a simplified calculation, and actual profit margins can vary significantly depending on individual business circumstances. Factors such as fluctuating expenses, seasonality, market demand, and competitive pricing can affect the profitability of a fingerprinting business.

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?

How To Start A Fingerprinting Business In 2023

How To Start A Fingerprinting Business In 2023

Greg Bouhl

Greg Bouhl

Welcome! My name is Greg Bouhl, and I am a serial entrepreneur, educator, business advisor, and investor.

StartingYourBusiness.com is here because of the many clients I worked with who made decisions based on inaccurate and outdated information.

Starting a business is hard, but here you will find the practical tools, resources, and insider tips to help you successfully start a business.

If there is a question about starting a business or help finding a resource, I'm here to help!

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12 Responses

    1. 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.
      Thanks!
      Greg

  1. What fingerprinting equipment and software do I need to start a live scan printing business in Michigan?

  2. What fingerprinting equipment and software do I need to start a live scan printing business in Illinois?

  3. Hi,

    Currently seeking checklist for Texas fingerprinting business. Any details would be great!!

    1. Hi Danielle – The market for fingerprinting services in Texas may be really small as the state of Texas has a program called the Fingerprint Applicant Services of Texas (FAST) which provides fingerprinting services throughout the state under an exclusive contract with MorphoTrust USA. Alternativley, rolled ink fingerprints can only be done at a law enforcement agency.

      I’m having trouble finding a definitive answer for those not doing state fingerprinting as several pages on the Texas government website are still not working. I’ll keep looking though.

      Greg

    1. Hi Mariel – In addition to the information on this page, you will also want to contact the Louisiana Bureau of Criminal Identification and Information for licensing information – (225)-925-6095

      Thanks!
      Greg

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