Traditionally the private investigation industry has been dominated by former law enforcement and ex armed service personnel. Therefore, it is hardly surprising that many private investigators struggle when it comes to the business side of PI work.
As public service investigators you will have been used to accepting your case load along with the tools and resources to carry out your work i.e. transport and communications equipment to allow you to do the job effectively.
The situation within the private and commercial investigations sector is different. Cost implications have a huge effect on your ability to manage your case load. From a business point of view, you can only afford to invest the amount of time and effort into a case commensurate to your client’s willingness and ability to pay.
This is where many former public service investigators fall short. Making that transition from public to private sector investigator is no easy task. Many PIs bill-out for their services without taking all the business cost implications into consideration. Small wonder that many PI agencies struggle and falter resulting in them falling by the wayside and eventually closing down.
Running a Private Investigation agency is not just about investigating; it also entails being an effective, competitive and profitable business or the question remains, “why bother?”
So why is it that so many excellent Private Investigation agencies run by ex law enforcement or public service workers fail? On the other hand, why is it that so many PI agencies that are run by novice investigators are so successful?
The answer is simple. Those PIs that originate from the public sector are not actually doing business they are only struggling to make a living. They are carrying on doing their investigator thing and paying little heed to running an effective and profitable business. They don’t have any business background and therefore lack the knowledge or experience of how to do business effectively.
On the other hand, many novice investigators with a solid background in business know that being a top class investigator is not really the most essential aspect to running a PI Agency. After all, once you have taken proper care of business and finance you can always hire great investigators to do the work for you.
Richard Branson is a successful businessman and entrepreneur known for such large companies as the Virgin Brand.
‘Virgin has created more than 300 branded companies worldwide, employing approximately 50,000 people, in 30 countries. Global branded revenues in 2009 exceeded £11.5 billion (approx. US$18 billion’).
What do you imagine that Richard Branson knows about air or rail travel? What does he know about cable TV and Telephones? I would imagine the answer would be, “very little”. What Mr Branson does understand is how to run businesses and how to motivate his employees to make money for the Virgin Brand.
How can a Private Investigator do business effectively and profitably?
A PI can start by billing-out with profit in mind. Many excellent private investigators are not charging the full value of their worth and as a consequence, in real terms, they are operating their business at a loss. It is their fear that if they do charge what they are worth then they will not get the work. This is, in many cases, a mistaken belief.
There will always be clients that are ‘price buyers’. They base their buying decision on costs with little or no regard for anything else. However, many other clients are ‘value buyers’ and base their buying decision on value for money rather than cost. If you target the ‘price buyers’ you will always struggle; price buyers will only do business with you until someone cheaper comes along. On the other hand ‘value buyers’ place value on quality of service.
‘Price buyers’ will probably recommend your services to other ‘price buyers’ you are therefore into a downward spiral of having always to be the cheapest. Alternatively, ‘value buyers’ will recommend you to other ‘value buyers’ which will result in a better and more profitable business experience for both you and the client.
If you want to know how to price your services with profit in mind a good publication to consult is:
- “Insider Information” – Expert Reveals Dangers Lurking on Social Networking Sites, How to Protect Your Business and Yourself. (prweb.com)
- Private Investigator Courses (socyberty.com)
- Rachel Uchitel Plans On Becoming A Private Investigator (perezhilton.com)
- Who Hired This Private Eye To Investigate Me? [Mysteries] (gawker.com)
- L.I. Moms Bring Woman’s Touch To Private Investigation (newyork.cbslocal.com)
- Dow Chemical’s Foul Campaign to Spy on Greenpeace [Lawsuits] (gawker.com)