3-Investigation Business Basics

Study Unit
Investigation Business
Basics
By
Robert Haack
Contributing Reviewer
Leroy E. Cook
About the Author
Robert Haack received a Bachelor’s degree in Criminal Justice from New
York Institute of Technology and a Master's degree in Criminal Justice and
Security Management from Long Island University, C. W. Post, Brookville,
NY. He is a New York State Police Instructor, certified by the New York
State Bureau of Municipal Police.
Mr. Haack is a Detective Sergeant with the Suffolk County, NY police

department. He is presently the Commanding Officer of the Computer
Crime Investigation Unit, a specialized unit he formed to provide technical
support to all investigative commands. Prior to his police career, he was
a probation officer for Suffolk County and supervised a case load of con-
victed drug offenders. During this time he also performed presentence and
background investigations. Mr. Haack has distinguished himself at the
Federal Law Enforcement Training Center and has received the title of
Seized Computer Evidence Recovery Specialist (SCERS).
About the Contributing Reviewer

Leroy E. Cook is the founder and president of ION Incorporated. Prior to
founding ION in 1987, he operated his own investigation agency for 15 years
and served 8½ years as an all lines adjuster and branch manager with the
General Adjustment Bureau. He has been awarded numerous investigative
industry certifications, including CLI (Certified Legal Investigator), CII
(Certified International Investigator), CFE (Certified Fraud Examiner), and
CPP (Certified Protection Professional). He has lectured at conferences of
the World Association of Detectives, National Council of Investigative and
Security Services, and the American Society of Industrial Security. He
served as a check pilot and provided flight instruction in Alaska for 12 years.
All terms mentioned in this text that are known to be trademarks

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Printed in the United States of America
01/25/05
As a private investigator, you’ll take
part in many types of investigations.
Each investigation has its own unique
characteristics. Some people argue
investigation is an art; others claim it’s
Pr ev i ew
more of a science. Unless you’re inde-
pendently wealthy, it must be a business
first and an art or science second.
Certain basic steps remain constant throughout the business
of investigation. Everyone involved in the business should
be aware of these basic steps and follow them. For example,
private investigators must have a business structure in
which to work. Within the business, every case has to be
set up and records must be kept. Even when you work for
someone else, cases don’t just happen; they come from
clients. There are right ways and wrong ways to handle
cases, starting with the first contact with a potential client.
There must be a fee charged for work done, and the fee must
be collected. In order for these important steps to occur, good
records must be kept. On television or in the movies, little is
ever said about record keeping, the tedious part of investiga-
tion. In any investigation, record keeping or documentation
is one of the most important steps you’ll perform. For your
work to have value to the client, you must closely document
everything you do, from the beginning to the end. As a pri-
vate investigator, whether you’re working as an employee of
someone else or you’re self-employed, you’ll be working on
your own much of the time. For this reason, your personal
time management is one of the basics of the investigation
business you must master.
As a private investigator, you’ll need to learn about business
structures and the necessary task of documentation—both in
running a business and in all aspects of investigation. Keeping
good, factual records, including specific instructions provided
by your clients, is necessary for writing reports and for billing
purposes. You must learn about establishing a case file
and about various forms that can be used throughout an
investigation. You’ll develop the process of selecting supplies,
equipment and resources you’ll need to conduct investigations.
In this unit, you’ll be introduced to some of the decisions
you’ll need to make before starting to work on a case.
iii
When you complete this study unit, you’ll be able to
• Decide which services to offer
• Record and file reports, photos, videotapes, and
audiotapes
• Outline an investigation
• Develop information from various sources
• Identify potential clients
• Market your services
• Set up administrative procedures
• Create appropriate forms
• Create an effective report format
• Set up case files
• Control billing
iv Preview
TERMINOLOGY 1
OLD-FASHIONED BUSINESS BASICS 2
C o ntents
SETTING UP THE BUSINESS 3
A Name for the Business 3
Location Selection 4
Legal Structure 4
Capital 5
Insurance 6
The Business Plan 6
Setting a Price 8
Employees 13
Record Keeping 13
Marketing 14
Exit Strategy 14
RECEIVING NEW CASES 17

Qualifying the Client 17
Taking Notes 18
Opening the File 20
Double-Checking Important Information 25
Case Details 25
Timing and Budget 28
Description of Assignment and Notes 30
Budget Agreement 30
THE BUSINESS OF PRIVATE INVESTIGATION 33

File Tracking 33
Supplies and Equipment 35
Case Notes 37
The Basic Questions 41
Evidence Handling 48
The Case File 52
Witness Interviews 53
Taking Notes during an Interview 53
ACCOUNTS RECEIVABLE MANAGEMENT

(COLLECTIONS) 58
Accounts Receivable 58
Collections 59
v
ESTABLISHING RESOURCES 63
Free Resources 63
Freedom of Information Act 64
In-House Resources 67
Subscription Resources 68
PRACTICAL EXERCISES 71
Exercise 1 71
Exercise 2 73
SELF-CHECK ANSWERS 75
EXAMINATION 77
vi Contents
Investigation Business Basics
TERMINOLOGY
Following are some terms you should become familiar with.
These terms will appear throughout this program.
Adjuster An insurance investigator who also negotiates
settlements
Adversarial Having to do with two opponents or enemies
(i.e., plaintiff and defense)
Chronological Arranged by order of time
Data Items of information, as in a databank
DOB Date of birth
Diary Short for “diary date” (insurance term for
“review date”)
Examiner Insurance industry term for foreman or
supervisor—short for “claims examiner”
Identifier An item of data unique to an individual or a small
group of individuals
Intake form Assignment sheet
Overhead All costs of doing business other than direct
production costs
Perpetrator, or perp Police term for “person who committed
a criminal act”
Prospect Anyone who might become a client
Public record Records open to the public that are
maintained by government agencies
Qualify To evaluate or determine the value (quality) of
something
1
Sequential Arranged by order of occurrence
SIU Insurance industry acronym for special investigation unit
Statute Short for “statute of limitations”—length of time
allowed for filing a lawsuit
Toll Legal term meaning to suspend or delay the statute of
limitations (for example, if the defendant leaves the state,
the statute of limitations may toll to give the plaintiff
time to track the defendant down)
Variable An item of data that changes with each new case
OLD-FASHIONED BUSINESS
BASICS
Let’s look at something we’ve all had close experience with—
a neighborhood store or market. The owner had to have a
location, an inventory, an inventory management system, a
record keeping system, a delivery system, and a way of get-
ting paid. When you’re in business as a private investigator,
you’ll have to deal with the same basics. Your inventory will
be your files, and they’ll have to be managed. You’ll have to
keep records and you’ll have to get paid. This unit will point
out many things that will seem difficult and can cause prob-
lems if not handled correctly, but don’t be discouraged. Think
of the neighborhood store. It wasn’t always easy for the store
owners, but they kept going by doing the basics, day after
day. It’s the same with a private investigation business. You
don’t have to solve all the problems at once.
In the first unit of this program, we said everyone is an
investigator. Those who aren’t in the business of private
investigation might do many of the same things you’ll do
as a private investigator, but they won’t get paid for doing
them. If you don’t get paid for what you do once you become
a private investigator, you won’t be able to stay in business
very long.
2 Investigation Business Basics

SETTING UP THE BUSINESS
When you first become a private investigator, it’s recommended
you work for someone else. This way, you don’t have to tackle
all there is to know to succeed as a private investigator and
all there is to know about operating a business at the same
time. The essentials for founding and operating your own
business will be reviewed as a part of this program, but only
briefly. Describing all the issues of business ownership and
operation would require a totally separate program.
Following are a few of the factors a new business owner
needs to deal with:
• A name for the business
• Location selection
• Legal structure
• Capital (startup money)
• Insurance
• The business plan
• Setting a price or rate for services
• Employees
• Record keeping/accounting
• Marketing
• Exit strategy
A Name for the Business

Many factors can be considered when selecting a name for a
private investigation business. It’s best if the name can convey
what the business does. Some people use a word or name
that has special meaning to them, possibly referring to some-
thing from their background, like “Green Beret.” Others use
multiple “A”s at the beginning of their business name to cause
it to be listed at the top of the Yellow Pages in the phone
book. Still others like to have a quality or characteristic in
Investigation Business Basics 3

the name, such as “Integrity” or “Accurate.” Another possibility
is a geographic word like “Metro,” Countywide,” or “Dallas.”
Of course, all of these factors can’t be used at the same time,
or you would end up with a name like “AAA Green Beret
Countywide Accurate Private Investigation Services of
Chattanooga.” It would be too long to fit on a business card,
and imagine the tongue twister when trying to answer the
phone!
Location Selection
Picking a location is very important, because a poor location
decision can virtually doom your business venture from the
beginning. If you like solitude and want to live in a rural area,
you must make some important choices. It might seem as
though being a private investigator and living away from the
city is a great idea, because you can work alone. Unfortunately,
you’ll need clients and things to work on. If there’s very little
economic activity where you choose to live, it will be difficult
to find enough work to stay in business. If you’re in a large
metropolitan area, there’s likely to be more work available,
but depending on what type of investigations you want to
specialize in, you could end up establishing your business
on the wrong side of town.
If you expect to work for private individuals, you’d want to
be located as close as possible to an affluent residential area
where the people would have enough money to hire a private
investigator. If you expect to work for attorneys, it would be
helpful to locate close to the courthouse or the business com-
plexes where law firms are found (Figure 1). If you have a
particular ethnic heritage or speak a second language, those
factors can be an advantage in the right areas but be wasted
in others.
Legal Structure
There are several ways to organize a business. It can be set
up as a proprietorship, a partnership, a C Corporation, a
Subchapter S Corporation, or a Limited Liability Corporation
(LLC), to name some of the options. The actual definitions for
each of these ways of organizing a business can vary from
state to state. The important thing to know is that you do

FIGURE 1—Locating your
business near the court-
house is best if you want
to work with attorneys.
have options. If you get your license and start taking cases
without selecting any specific form of business, you’ll be
considered a proprietorship. If you go into business with a
partner, you’ll be doing business as a partnership. In both of
these cases, the business structure doesn’t provide protection
against liability claims. Business structures such as limited
partnerships and corporations can provide some liability
protection, but they add a level of complexity to being in
business. If you’re going to stay small and don’t have many
personal assets, going into business as a proprietorship is
the simplest way. If you have assets you don’t want to expose
to potential liability from a business-related lawsuit, such as
a home or inheritance, you would probably want to use some
form of corporation. To do this, you’ll need to consult an
attorney.
Capital
It takes money to start a business. Most states require private
investigators to have a license. The cost of a private investiga-
tor license can cost from about $100 to $500 or more. The
licensing agency could require you to obtain a bond, a type
of insurance meant to protect consumers, before issuing a
license. Bonds and other forms of insurance cost more money.
Equipment, supplies, and facilities all cost money. If you
start out working for someone else, it’s good to be aware of
all these hurdles that your employers had to clear to go into

business and provide a place for you to get experience. Being
aware of their sacrifices and investments helps you to under-
stand why you’ll be expected to do things their way. After all,
it’s their money at risk.
Typical Business Startup Expenses

• License fees • Rent
• Security deposit • Office supplies
• Furniture • Equipment
• Automobile/transportation • Initial advertising
• Operating cash • Insurance premiums
• Legal fees • Office setup (also called
leasehold improvements)
Insurance
In addition to some states requiring a bond before a private
investigator can get a license, many large clients, such as
insurance companies, require the private investigators they
hire to have professional liability insurance, also known as
Errors and Omissions (E & O) insurance. E & O insurance will
generally cost from $100 to $300 a month, payable by the
year. You’ll also need insurance on your automobiles and
possibly hazard insurance covering your equipment. When
equipment is leased, the owner of the equipment usually
requires the lessee to prove he or she has hazard insurance
coverage (a.k.a. fire and extended coverage).
The Business Plan

If you’re going to start a small private investigation agency
and you don’t expect to borrow tens of thousands of dollars
to do it, you don’t have to have a formal business plan. An
informal business plan can be the vision in your mind, but
it’s better to write it out. Whether it’s written out or in your
head, you do need to have a plan if you expect to succeed.
Finding the answers to all the questions mentioned in this
section, or at least determining where to look for them, is
what a business plan is all about.

You should carefully consider the business plan questions in
Figure 2. These will help you make good decisions when
you’re ready to start a business of your own.
Questions to Ask When Making a Business Plan

1. Name 6. Strengths
What will you call the business and What competitive strengths will
why? you have?
2. Location
What are your personal strengths?
What geographic area will you 7. Marketing
work in? How will potential clients learn
Where will you establish your about you?
office? What advertising will you do?
3. Opportunity
What does the advertising cost?
How might you get free publicity?
What is the market for your products
or services? 8. Money
What target market or types of How much startup capital will you
customers are available? need?
4. Competition
Do you have startup capital?
Do you have money to live on
What other agencies work in the
while getting started?
same area?
How long will it be before revenue
How successful are they?
is generated?
How will you set your fees compared
Who will do your books (keep
to them?
track of the money)?
Why do you think you can get
What are your revenue and
customers away from them?
expense projections?
5. Specialties
9. Employees
What investigative specialties will
Will you hire any support staff?
you have, if any?
Will you hire any investigators?
What types of investigation cases do
the other agencies work on most?
FIGURE 2—Important Questions to Consider when Making Your Business Plan
The questions in Figure 2 aren’t all you’ll need if you’re prepar-

ing a business plan to support a loan application. That type
of business plan requires more financial statements. These
questions are meant to guide you through the thought process
you need to consider before you start investing money.
Answering some of these questions requires research.
Research is part of investigation, so doing the research
will be good experience.

Setting a Price
There’s an old joke about two hobos (homeless people) on a
park bench. One said, “I used to have the most successful
Widget business in the city.” The other asked, “What was the
secret to your success?” The first replied, “My prices were so
low, no one could compete, so I took over the entire Widget
market. I bought the Widgets for $10 each and sold them for
$8.99, so no one else could underprice me.” The second hobo
asked, “If you bought them for $10 and sold them for $8.99,
how did you make any money?” The first hobo replied proudly,
“I made up for the low price with high volume.” It’s easy to
see why this fellow ended up broke—if you sell goods for less
than they cost you, you’ll lose money, no matter how much
you sell. This was also the demise of many an Internet
startup in the 1990s. Low price isn’t always the best answer.
The wrong way to set an hourly rate for investigating is to
just pick a number because it seems good or because it’s the
same as or lower than what’s charged by someone else. The
correct way is to first determine how much it will cost you
per hour to perform the service, and then set an hourly rate
sufficiently higher than this cost to not only cover your cost
but to also earn some profit
(Figure 3). This subject is so
important, and so frequently
misunderstood, it warrants fur-
ther explanation. How does a
private investigator know how
much it costs to provide an
hour of investigative services?
Let’s look at some of the ways
to figure it out.
FIGURE 3—It’s important to figure out

what it costs you to be in business, so
your fees cover your expenses and earn a
profit.

If the work were to be performed by an employee, you would
know how much you’re paying the employee per hour. If the
employee is paid per billable hour, the cost of office overhead
(costs resulting not from a specific case, but from running
the business itself) would be added to the employee’s hourly
cost, along with an amount for profit, and you would have
your hourly billing rate. If the employee is paid a salary of a
certain amount per day, week, or month, you would have to
calculate the number of billable hours you can expect the
employee to produce, and determine employee cost by dividing
that expected number of billable hours into the amount to be
paid per period. Then you’d add the overhead and profit, as
before, to reach the amount to charge your clients. Let’s look
at the following example:
• Employee salary: $300/week
➣ Approximate number of billable hours: 20
➣ $300/20 billable hours = $15 per hour
• Overhead (rent, electricity, insurance, etc.): $500/week
➣ $500 / 20 billable hours = $25 per hour
• Total cost: $15 + $25 = $40 per hour
• Profit: $5 (this amount needs to be calculated separately,

taking into account what money you need to have left
over for your own purposes)
• Hourly charge to clients = $45
For our purposes here, let’s talk about calculating your

hourly cost when you’re going to be doing the work yourself.
Even though this seems like it should be more simple than
working with employees, it’s easy to make serious mistakes.
Most new private investigators set their hourly rate by saying
something like, “Wow! Earning $40 per hour would be great.
That’s more than I made as a deputy or a Widget salesman.
I’ll charge $40 per hour.” Depending on their skill at marketing,
they might end up with only an average of one 10-hour case
per week for their first three months in business. Even if they
get paid promptly by all the clients—which isn’t guaranteed—
have they earned $40 per hour? The answer is both yes and

no. They’ve earned $40 per hour for the hours they were able
to bill to a client, but compared to their previous job where
they were paid by the month, they didn’t earn $40 per hour.
There are usually 40 working hours in a week, and an aver-
age of 173 paid hours in a month when one is paid by the
month. The new investigators in the example were only able
to work 10 “paid” hours per week because that’s all they were
hired to do. Looking at those first three months, our new
investigators only earned a gross income of $5,200.
10 hours a week ⫻ 13 weeks (3 months) = 130 hours
130 hours ⫻ $40 per hour = $5,200
Their actual hourly earnings were only $10.02.
3 months ⫻ 173 hours per month = 519 paid hours
(in a full-time job)
$5,200 (amount paid) ÷ 519 paid hours = $10.02 per hour
How To Calculate an Hourly Billing Rate

1. Determine the number of hours per month you want to work.
2. Determine the amount per hour you want to be paid personally for your
time (your take-home pay).
3. Determine your fixed business costs.
4. Determine your variable business costs.
5. Estimate the percentage of working time you’ll be able to bill a client for.
6. Do the math.
7. Determine the amount you must bill and collect per hour to break even.
8. Add the amount desired for profit.
FIGURE 4—How to Calculate Your Cost of Doing Business and Required Hourly Rate
If earning $10.02 per hour for their first three months in

business doesn’t sound too bad, look out. The $10.02 is an
hourly gross income, and remember, these investigators are
in business. They have business expenses—including taxes.
If their overhead costs of being in business were $10 per hour,
their true hourly earnings were only two cents per hour.

Take a look at the hourly fee calculation in Figure 4.
Numbers 5 and 8, “percentage of time billable” and “amount
desired for profit,” may seem like guesses, but planning for
effectiveness and profit don’t have to be the result of pure
guesswork. No one is 100 percent productive all the time, so
it’s unreasonable to expect to be able to bill someone else for
every hour you spend in the office. After all, sometimes you’re
doing work that relates to your business, but not a particular
client’s case.
An acceptable average of billable hours worked per day for
a professional is 75 percent. This means experienced profes-
sional private investigators who spend an eight-hour day
working can usually bill six hours. Some days they work ten
or twelve hours and bill eight or ten, so the days they only
bill four hours are acceptable, on the average. As a beginner,
you shouldn’t expect to be able to bill over 50 percent of the
hours you work. You’ll be spending a higher ratio of your time
marketing, setting up new procedures, and experimenting
with how to get things done. If you charge clients for too
much nonproductive time, you could drive them away.
Take a look at the following example, based on Figure 4.
1. Desired working hours per month
(8 hrs/day, 6 days/week) 208
2. Desired take-home pay per hour worked $20
3. Fixed business costs, monthly:
Rent, lease payments, phone line,
car payment, etc. $1,400
4. Variable expenses: All direct
expenses will be billed to client;
there are no employees. Variable
expenses are limited to postage,
secretarial costs, and misc. items $200
5. Percentage of working time: A beginner
can hope to bill one hour for every
two hours worked 50%

6. Billable hours (half of Item 1) 104
Fixed costs ÷ billable hours
$1,400 ÷ 104 = $13.46
Desired monthly income
$20/hour ⫻ 208 hours (from Item 1) = $4,160
$4,160 ÷ 104 billable hours = $40/hour
7. Amount you must collect per hour
to break even $53.46
8. Profit ?????
Even though the amount of profit a business earns is defined
as the amount of money left after all expenses are paid, it’s
best to at least have a goal when you start for the percentage
of your income that will be profit. You’ll notice there’s no
profit built into the sample hourly billing rate calculation, so
in order to assure the survival of your business, you would
need to charge more than $53.46 per hour. If you hire an
employee and pay $15 per billable hour, you wouldn’t have
to add only the $15 per hour to your billable rate, but you
would also have additional overhead costs related to the
employee, for accounting and taxes. This could amount to
another $10 per billable hour, and would bring your break
even billing rate up to $78.46 ($53.46 + $15 + $10).
You might ask: “If I’m earning $20 per hour for every hour
I work, why would I need the business to earn a profit?” Not
only is a business owner entitled to earn a profit for the risks
incurred in owning a business, a profit is necessary to keep
the business going. Nothing was added into the calculation
for advertising, marketing, health insurance, vacation pay,
sick pay, collection expenses, or bad debts, because different
people handle these items differently based on their account-
ing methods. What would happen if a client didn’t pay a
$2,000 bill? If there’s no profit to build a reserve, these items
could sink the ship in a hurry. As a new private investigator,
earning $20 per hour for all your working hours might not be
realistic. In that case, you could decide you’ll work for $10
per hour. If you leave your billing rate at $53.46 and you’re
able to bill for 50 percent of the hours you work, your business
would show a profit of $10 per hour. There are also tax reasons
why you might pay yourself less per hour, and put more
income into profits—business profits are taxed differently
than wage income.

As you can see, there are a lot of factors to consider when
thinking about what to charge your clients. Coming up with
numbers based on estimates might seem to be a waste of
time, but it’s not. It’s critical for business owners to know if
the money in the bank is their personal money, or money for
the business. If you think it’s yours but it’s not, and spend it
on a vacation or clothing, the business could be destroyed.
There would be nothing left to pay fixed costs when a client
fails to pay a bill or when the rent goes up on your office
space.
Employees
If you plan on having employees, even if only a part-time
secretary, a whole additional set of issues must be dealt with.
One of the most common reasons for business failure is
poor record keeping and failing to pay withholding taxes on
employees. You need to think ahead of time about where you
would look for employees and how much you would pay
them. Would you expect them to already know the business,
or would you expect to train them?
Record Keeping
Record keeping is one of the most vulnerable areas of new
businesses. If you do anything for money in our society,
you’re expected to keep enough records for the government to
be able to determine how much you owe in taxes (Figure 5).
This part of the business can’t be ignored for very long. Some
part-time private investigators try to avoid taxes by getting
paid in cash and keeping no records. Those who do this
aren’t really in business, and have no hope of ever developing
their businesses to a worthwhile size. If you’re not skilled at
accounting or bookkeeping, you should talk to someone with
those skills about keeping your records, before launching
your new business.
If you have a computer, it’s possible to do your own account-
ing with one of the small-business software packages that
have been developed in recent years. Examples include
QuickBooks, Peachtree, Big E-Z, Simply Accounting, and
CheckMark.

FIGURE 5—It’s important to keep
accurate records for your business.
Marketing
Marketing will be dealt with more fully in another unit. It’s
important to know, however, that next to improper record
keeping, poor marketing is the next most common reason for
business failure. You’ll need to decide before ever opening
your doors where you expect your clients to come from, and
how you’ll let them know you’re in business. It won’t just
happen. They won’t come looking for you.
Exit Strategy
If your business does well and you enjoy starting and devel-
oping it so much that you want to start and develop another
business after a few years, what will you do with your suc-
cessful private investigation agency? Also, what will you do if
you find, after a few months or a year or two, you can’t make
a living doing private investigation or don’t like it?

An exit strategy is the owners’ idea of how they will get out
of the business they’re trying to get into. A bunch of people
mortgage their houses and run up the balance of their credit
cards to get a business going. Their exit strategy might be to
“go public” and effectively sell the business to the public
through an initial public offering of stock. Another exit
strategy might be to sell the business to someone else or
to give it to the grandkids.
A profitable private investigation agency built around your
skills and contacts might not have any value to anyone else.
It would be a shame to either be shackled to something you
no longer like or have to walk away from several years of
effort with nothing, in order to do something else. You need to
consider this question before making long-term commitments
to equipment leasing companies or office space. Considering
your possible exit strategies before starting a new business
will help you make good decisions in other areas.
Before moving on to learn about beginning a new case, take a
moment to complete Self-Check 1.

Self-Check 1
At the end of each section of Investigation Business Basics, you’ll be asked to pause and check
your understanding of what you have just read by completing a “Self-Check” exercise.
Answering these questions will help you review what you’ve studied so far. Please complete
Self-Check 1 now.
1. What business activity is crucial to the success of a new business?

__________________________________________________________
2. How are chronological items arranged?

__________________________________________________________
3. How do some investigators try to get the name of their business at the top
of the Yellow Pages listing?
__________________________________________________________
Questions 4–7: Indicate whether each of the following statements is True or False.
____ 4. Hours worked and billable hours aren’t always the same.
____ 5. Overhead means costs that are too high.
____ 6. A business plan doesn’t have to be written out.
____ 7. It’s always best to start a business close to where you grew up.
Check your answers with those on page 75.

RECEIVING NEW CASES
Certain basic activities must occur in all investigative work,
such as
• Opening the file
• Getting details from the client
• Organizing the work
• Doing the work
• Documenting and reporting results
If a private investigator specializes in one type of case (such as

pre-employment investigations) or gets all assignments from
one client or one type of client, the structure and procedures
of every case will be very similar. Only the facts, identifiers,
and people contacted will vary.
Most private investigators don’t specialize in only one type of
work. For them, every investigation is different and requires
different steps in addition to the basics. To introduce you to
the basics, let’s look at the steps of an investigation from the
first contact with the client. Because an investigator doesn’t
always know where each step is going to lead, it’s important
to constantly take notes. Note taking begins with the first
contact with a potential client.
Qualifying the Client

Before you know if you’ll have a new case, both the client
and the possible case must be qualified. The word “qualify”
is used here in the same way it’s used in the sales industry.
A professional salesperson qualifies prospects before trying to
sell them anything. It would be a waste of time to try to sell
something to someone who lacks money or the authority to
buy. For the same reason, a professional investigator quali-
fies potential clients before spending much time talking about
their problems. Before getting too excited about a new case,
you must determine if the potential client is willing to pay
your fees, if what they want is legal or illegal, and if their
expectations are reasonable or unreasonable.

In addition to qualifying the client, the case must also be
examined. You must be sure you don’t agree to do something
that will help a client hurt someone or do something illegal.
Qualifying is also important when working an investigation.
Every new source or potential witness must first be qualified,
or evaluated, as a first step. This will be discussed more later
in this program.
We don’t know when the phone rings or a stranger walks
through the door if this is going to be a good client or a sales-
man. As in all business, the first step is to find out, with the
universal question, “How may I help you?” If, in response to
this question, the person tries to sell you office supplies or
asks directions to another business, you don’t need to start
taking notes. If, on the other hand, the prospect starts telling
you about a problem or asking you about your services, start
writing. All notes taken in the course of an investigation
become part of the case file for that investigation, even the
notes of your initial conversation with the client.
Taking Notes
Don’t write notes for multiple files or activities on the same
piece of paper. Paper is cheap compared to the cost of losing
a crucial name or phone num-
ber because it was on a sheet
of paper with something from
another case. Don’t worry
about filling up every page you
write on. Use a new, clean
sheet of notepaper every time
the case you’re working on
changes (Figure 6).
FIGURE 6—Always start new case notes

on a fresh sheet of paper.

At the top of every page of notes, write the date and the exact
time. You never know if the time could be important in the
future, such as for determining how long you spent on an
activity or exactly when you spoke with someone. Write the
reference, case name, and whom you’re speaking with. Some
people don’t introduce themselves. Good note-taking habits
will lead you to identifying them early in the conversation. It’s
up to you to take gentle control of the conversation early to
be sure you get what you need. If the prospect just starts
talking about the problem, interrupt at the first opportunity
and get his or her name. This not only allows you to properly
head your note page, it subtly gives you some control in the
conversation. Not to mention, you wouldn’t want to realize
after your new clients have left that you don’t know their
names!
Everyone has their own note-taking style. Notes are informal
and meant primarily to help you keep track of important
information. Most of the time, we don’t know if what we hear
is important until later, so we can’t take the time to formally
record everything. As long as you can read and understand
your own notes, their neatness isn’t crucial. If someone is
talking fast, you might only have time to write one-word
reminders of things you want to go back to for more detail.
The important thing is: always take notes until you’ve deter-
mined there’s no longer any possibility that what’s being
talked about could have future value. For example, after
discussing the facts of the case, the client may turn to
chitchat. Obviously, the weather or baseball scores aren’t
important to jot down. Or, after listening to the prospect for a
few minutes, you might determine that the person has no
money and is just looking for a sympathetic ear. In this case,
your last note for the session might be, “No money to pay for
investigation.”
Even when the prospect seems to lack the funds necessary to
pursue a case when you first meet, it’s always possible he or
she could borrow money from a relative and call you back the
next day. For this reason, you don’t want to throw your initial
notes away. If you don’t expect anything to come from a
conversation, put the notes you took into a chronological note
file. A chronological note file is a file where you put notes that
aren’t connected to any open case, with the newest always

going in the front of the file. If a person calls back a day or
week later, you can pull the notes from the first conversation
and not have to cover all the same questions again. Every 90
days or so, when the file gets too thick, the old notes at the
back of the folder can be discarded.
Opening the File

Once a new client and case are identified, an assignment
sheet, or intake form, must be filled out. The assignment
sheet should contain the following:
• Client
➣ Name
➣ Address
➣ Phone number
➣ DOB
➣ Occupation
➣ Date of initial contact
• Type of investigation
• Subject or target information (This would include the

same name/address information as for the client, with
the addition of a physical description.)
• Timing and budget of the case
• Investigator assigned to the case (if applicable)
• Date assigned
• First report due
• Completion deadline
• Budget agreement
• Description of assignment and notes
If you took notes while qualifying the prospect, you have

enough to fill out part of the assignment sheet without asking
the same questions over again. Just as having good note-
taking habits will help you maintain control of conversations

when needed, using an assignment sheet for every assignment
will help you get all the information needed to do the job. If
possible, it’s a good idea to have your assignment sheet auto-
mated in a template on your personal computer. This isn’t
critical, but having your record keeping automated as much
as possible is clearly worthwhile.
Even if the assignment sheet is automated in your computer,
you still need printed assignment sheets to write on when
taking assignments. Only when conditions are ideal, with
you sitting at the computer talking to the client, can the
information be entered directly into the computer. There will
be many non-ideal situations where a computer won’t be
available and you have to take assignment information (for
example, while in a car or public place). The information
from the handwritten form will be transferred into the record
keeping system in your computer later.
As recently as the late 1990s, a private investigator could
operate effectively without a personal computer. To do so
now, however, would put a new private investigator at a
severe disadvantage. It’s not recommended to try to start
your own business without your own computer.
The assignment sheet is used to document information you
receive from an initial client contact. It’s also the first item to
go into the case file. Fill it out as completely as possible to
save your client time and money. If you do it thoroughly at
the beginning, you won’t later have to ask your client ques-
tions he or she has already answered. Most importantly, you
won’t spend time learning what the client already knows.
Clients don’t like paying for time spent digging up information
they told you when they gave you the case.
Figure 7 shows an example of a case assignment sheet. You
might want to use this form when you first start out, and
modify it later to meet your specific needs. When starting
your investigation, write on the case assignment sheet all the
necessary information as you receive it. Have a supply of
blank forms available for easy access when a potential client
contacts you.

NE W GUY INV E S T IGA T IONS
317 Main Street, Anytown, OR 89963
(516) 555-9999
File Number _____________

CLIENT
Last Name ________________________________ First Name ___________________________
Age ______ DOB _________________
Address _______________________________________________________________
________________________________________________________________
Phone Numbers: Home _________________ Business ________________ Cellular/Pager ________________
SSN ____________________
Occupation ___________________________ Employer _____________________________
E-Mail Address________________________
Employer’s Address _____________________________ City ________________ State ______ ZIP_________
Date of First Contact ______________________________ Time ______________
CASE DETAILS
Type of Investigation ________________________________________
Subject / Target Information
Last Name______________________________________ First Name ________________________
Age _______ DOB ____________
Height ________ Weight _________ Race ___________
Distinguishing Marks ________________________________
Address ___________________________________ City ___________________ State ______ ZIP_________
Phone Numbers: Home ________________ Business _________________ Cellular/Pager ________________
SSN _________________________
Employer _______________________________________ Occupation ______________________
Employer’s Address __________________________ City ___________________ State ______ ZIP_________
Other Subject
Information______________________________________________________________________________
_________________________________________________________________________________________
_________________________________________________________________________________________
TIMING AND BUDGET
Date Received from Client ____________________
Assigned To _________________________ Date Assigned ____________________
First Report Due _________________
Completion Deadline _______________________ Budget Agreement _________________________
Description of Assignment and
Notes___________________________________________________________________
_________________________________________________________________________________________
_________________________________________________________________________________________
FIGURE 7—Assignment Sheet

Once you’re established in business, you’ll probably have reg-
ular repeat clients. Filling in an assignment sheet for these
clients will entail only asking for the variable information—
the information that changes with each assignment. A regular
client’s identifying information usually stays the same. The
subject’s identifying information and any specific instructions
change with every new case. Only the client’s name would
need to be entered in the client’s information section for repeat
clients. It’s a good idea, especially if you haven’t worked with
a client for a while, to ask if any contact information (i.e.,
address and phone number) has changed since your last
contact.
Even though the file number is the first item at the top of the
form, you won’t fill this in until you log the file in and assign
it a number. If you’ve taken good notes in the early part of
your conversation, you’ll already know many of the items
needed, like the client’s name, phone number, date of first
contact, and a general idea of the client’s request.
The last name is listed first for clarity and for easy retrieval
when you search for filed forms. You have the option of filing
the assignment sheets by case file number or alphabetically
by last name. Keeping your case files in a computer database
will allow you to cross-reference your files by last name, file
number, and any other way you desire.
In your initial contact, try to get as much information from
the client as you can. The source of helpful information most
often overlooked by investigators is the client. Clients often
don’t realize what information is helpful to the investigator,
and frequently don’t convey it unless asked. In sensitive
cases involving spouses or family, you may have to ask your
questions carefully to avoid offending the client.
For individual clients (as opposed to business clients), you
can request to see their driver’s license. It will provide you
with much of the information you’ll need, like name, address,
description, date of birth, and driver’s license number. These
items are known as identifiers. We’ll discuss identifiers more
in future units. If the license has a picture, photocopy the
license and keep the copy in your case folder. Your client’s
Social Security number is an important identifier. If it’s dif-
ferent from the driver’s license number, try to get both for
your file.

A few years ago, getting so much information from the client
wasn’t necessary, but with new legal developments, a private
investigator has to be very cautious. A client who isn’t willing
to share personal information with an investigator might not
be a good client. Some people try to hire investigators to
locate someone they’re possibly going to stalk, harass, or harm.
The best thing a private investigator can say in this situation
is, “Sorry, I can’t help you.” Not only would it be wrong to
take the job, it could lead to lawsuits. The only way to even
have a chance at determining in time if a client is honest is
to ask enough questions. The most important question you
can ask, when a client wants to track someone down, is
whether they’ll respect the person’s wishes if he or she doesn’t
want to have any contact. A bona fide client will agree to con-
sider your job done if you track down the subject, find that
the subject doesn’t want to hear from the person, and take
no further action.
Another important consideration regarding your clients’
information is security. The identification information you’re
collecting from them (particularly Social Security numbers) is
very sensitive. It’s the same information an identity thief would
use to steal their identities. Some clients may be reluctant for
this reason to give you so much information.
In this case, you must reassure them that
the information will be kept safe. You should
have a metal file cabinet, which should be
kept locked when you’re not present (Figure 8).
Naturally, the key should be kept safe as
well—leaving it in the unlocked drawer of
your desk is the same as not locking the
cabinet to begin with. Only people who need
to have access to confidential information
should have access to your files. Your com-
puter should have a password to keep the
electronic files safe from unauthorized
access.
FIGURE 8—Keep client files in a locked

metal cabinet.

Knowing your clients’ occupations will sometimes help you
understand them better. Having the name of their employers
might help you get in touch with them in the event you dis-
cover important information they need to have as soon as
possible. All of this information will also be helpful in the
event a client ends up owing you money and isn’t prompt
with payment.
While you’re completing the assignment sheet, the information
won’t always come to you in the exact order it appears on
the form. For example, while initially qualifying the client to
determine if there’s a potential case and the client is able to
pay, you might learn the client’s deadlines and information
about the subject. You should use the form religiously, filling
it in item by item. Soon, you’ll know it so well you’ll know
where any given piece of information goes even if you haven’t
asked the question yet.
Double-Checking Important Information

If you took good notes during the qualifying part of your
conversations, you wouldn’t need to ask the client for that
information a second time. Instead, ask them to verify it for
you after you’ve filled in the sheet. This gives you a way of
double-checking your spelling and accuracy and lets the
client know you’re being sure you have accurate information.
In the case of a one-time client, the date of first contact in
the client area and the initial contact date of the case will be
the same. For repeat clients, the date of first contact and
other constant data would be left blank in the client area of
your printed form and, when entered into a computer, the
computer could be set up to automatically fill them in from
previous records. After getting all of the client information,
complete the case details portion next.
Case Details
To fill in the “Type of Investigation” field, you’ll refer to your
own list of types of cases you handle. Here’s a sample of case
types and the codes you might use in your database.
• AST—Asset search
• BKG—Background investigation

• BOD—Bodyguard and/or executive protection
• BOU—Bounty hunter/bond recovery
• COI—Competitor intelligence
• COL—Collection
• CRM—Criminal defense
• CUS—Child custody
• DOM—Domestic
• ELD—Elder abuse
• GEN—General investigation
• HAR—Harassment/discrimination
• IMM—Immigration
• INP—Intellectual property
• INS—Insurance defense
• PIN—Personal injury
• PRB—Probate/heirs
• PRD—Products liability
• PRE—Pre-employment
• PRS—Process service
• REC—Recovery/repossession
• RRR—Records retrieval
• SAD—Sexual abuse defense
• SEC—Security
• SKT—Skip tracing and locating
• SUR—Surveillance
• TRP—Trial preparation
• UND—Undercover
• WTS—Wrongful termination

The reason for assigning a code to every new case is to give
yourself the ability to use statistics in managing your business.
After you’ve been in business for a while, you’ll want to know
what kind of cases are the most profitable and where certain
types of cases come from. By assigning a code to every case
type, you’ll be able to organize and calculate averages by type
of case. Without codes, sorting and determining good statistics
isn’t possible. You might need to add additional codes to the
sample list above. Of course, you can also devise your own
codes to suit your own purposes.
The subject information part of the assignment sheet is very
important for all investigations. Getting an accurate descrip-
tion of a subject can save you valuable time, which saves the
client money. It’s worth re-emphasizing here that the client
usually knows more than they tell you without urging. If they
know the subject or have seen him or her, whatever charac-
teristics they noticed about the subject were usually noticed
without thinking. If you ask the client for the color of the
subject’s hair, you might be told “brown” and nothing else.
If you ask the client to describe the subject’s hair, you might
find out it’s brown, shoulder length, and balding on top. You
learned about the importance of open-ended questions in an
earlier unit. Taking cases from a client is an important time
to use this skill.
Enter the subject’s last and first name, age, and date of
birth. If the client doesn’t know the exact age, ask for a best
guess. If the subject is known by any other name, include
that information in the “other subject information” field. The
subject could have a street name or a family nickname that
will help you locate him or her. Enter the full address; if he
or she lives in an apartment, be sure to indicate that on the
assignment sheet. Remember, this sheet acts as one of your
investigative tools, so you want it to be as accurate as possible.
A phone number, even an old inactive one, might also help
locate the subject in the event you don’t have an address.
There are printed and electronic phone directories available
with reverse directory listings, providing addresses when all
you have is a phone number. Many databases also provide
phone numbers when all you have is an address. We’ll dis-
cuss databases further in another unit. Ask if your client can
provide you with the subject’s business phone number, and
you’ll have one less item to research.

Online People Finders
Many searchable online phone/address listings have sprouted
up in recent years, including AnyWho, Switchboard.com, US
Search.com, WhitePages.com, WhoWhere.com, and more.
These are searchable by name, phone number, and address.
Some offer public records and other searches for a fee. Google
is another useful search engine for finding information on peo-
ple, businesses, and just about anything else.
A useful exercise is to look up yourself and your friends and
family, to get a feel for how these search engines work. Sites
to try include
• http://www.whowhere.lycos.com
• http://www.anywho.com
• http://www.whitepages.com
• http://www.switchboard.com
• http://www.ussearch.com
• http://www.google.com
“Other subject information” is where you would write any-

thing else the client can tell you that might be helpful, such
as where the subject used to live or any hobbies or special
skills. You can see the possibilities are only limited by your
ability to ask good questions of the client.
Timing and Budget

The next field on the assignment sheet is for the date you
open the case. You might need the date for billing purposes.
It may also serve as a reference for court testimony.
Ask your client when he or she would like you to complete
the assignment. The reporting date and completion date are
very important. You should take the necessary steps to
ensure that you complete the investigation and submit your
final report no later than the date agreed. Some clients may
want progress updates every few days, while others may not.
Commercial clients, like insurance claims people or attorneys,
might have clear dates by which an investigation must be
concluded, because of court deadlines or other factors.

Insurance claims people have diary dates they must comply
with, so their job performance is affected if they don’t have
your report when they’re supposed to. For litigation, the
court allows certain things to take place only within certain
time periods. If an attorney wants the results of your investi-
gation to decide how to proceed with a lawsuit, the time limit
might be imposed by a statute of limitations. Different juris-
dictions allow a certain amount of time in which to file suit
for different things. To file suit on a contract dispute in a
particular state, a person might have seven years. To file suit
in the same state for injuries sustained in an accident (a tort
claim), he or she might have only two years from the date of
the accident. The law setting these cutoff dates is known as
the statute of limitations.
You need to know the statutes of limitations for the jurisdiction
in which you expect to work. When the time to file a suit runs
out, the statute is said to expire. Statutes of limitations can
be suspended for a time (tolled). For example, if the defendant
flees the jurisdiction before criminal charges can be filed, the
statute of limitations will be tolled until the person can be
caught.
When taking an assignment from most private clients, there
won’t be a clear date by which the investigation must be
completed. Still, you need to determine their expectations.
Trying to locate someone might take a day or a year. Finding
out where someone usually goes after work might take two
days or two weeks. In cases where there’s no obvious dead-
line, it’s important to establish a reporting date with clients, so
they know what to expect and you have a way of scheduling
your time effectively. You might know right away that you can’t
complete the assignment by a specific date. It’s important to
let the client know immediately. Your client needs to have the
option of changing the due date or hiring someone else.
Note: Not meeting a completion date can give your business
a poor reputation and consequently destroy your business. A
key to success in investigation or any other business is your
reputation. You must take steps to protect it. If you do, your
good business practices will reward you with greater success.

Description of Assignment and Notes
In the final section on your case assignment sheet, write
a description of the assignment in your own words as you
understand it. Be sure the client agrees with what you
write. This section will provide you with the details of your
assignment. It will also be the gauge that determines if you
successfully completed your assignment.
Some private investigators send their clients a copy of the
case assignment sheet, including a full description of the
assignment. This is one method of ensuring that you’re pro-
viding the services that your client expects. You can take it
one step further and request your client to sign and return
the assignment sheet as confirmation of the case. To avoid
delay, use a fax, so you can get started on the case right
away. When clients are sitting in the room with you while you
fill out the assignment sheet, have them review and initial
the sheet before leaving. This provides documentation in case
of a disagreement over fees or work done.
You should be very specific when completing this section,
listing all the information your client expects you to provide.
Doing so will help you prepare an itemized invoice when
billing your client. When you’ve completed the case assign-
ment sheet and you’ve sent a copy to your client, place one
copy in the case file folder. The case file folder will also
contain all field notes, exhibits, evidence, and any other
information appropriate to the assignment.
Budget Agreement
The last item on our sample assignment sheet, but one of the
most crucial, is the budget agreement. It’s good to get an idea
of what the client’s budgetary expectations for the case are. If
possible, however, you want to avoid locking yourself into a
fixed-dollar budget amount. If there’s no upper limit on how
much you can spend, the budget agreement would be the
hourly rate you told the client you would charge. One effective
system is to agree with the client on a budget threshold, rather
than a budget. With this system, you agree not to spend more
than a specific amount in time and expense on the case

without reviewing it with the client and getting authorization
for additional expenditure. This gives the client peace of mind
and still leaves the door open for the budget to grow larger if
the information can’t be obtained easily.
Having some kind of budget agreement with the client before
you start on the case is crucial to avoid billing disputes after
the work is done. It’s disappointing, and damaging to your
business, to spend thousands of dollars of time and expenses
working on a case, only to have the client say he was only
prepared to spend $300 and refuse to pay any more.
Before learning about the business of private investigation,
take a moment to complete Self-Check 2.

Self-Check 2
1. True or False? It’s not necessary to agree with the client on a budget for the
investigation before beginning work.
2. Availability of private investigator work should be a factor to consider when

selecting a _______ for your business.
3. True or False? It’s not important for the business to make a profit, so long
as you’re
getting paid for your time.
4. When is it necessary to consider the bookkeeping aspects of your business?

a. Before starting out
b. Before the first tax bill comes
c. When it’s time to pay taxes
d. It’s not an important part of business.

THE BUSINESS OF PRIVATE INVES-
TIGATION
File Tracking
Number Your Files

An important part of most businesses is inventory control.
Your inventory will be your open files. You can’t afford to
lose track of any of them. You’ll need to use some type of file
log to keep track of all open and closed files. You should also
number your files with a unique identification number to
keep track of them. The ways to number your files is only
limited by your imagination and equipment. However, espe-
cially if file numbering will be done by hand, you should keep
it simple. If you make your numbering system too complicated,
you’ll regret it. Although it doesn’t seem like a big thing,
establishing a good numbering system at the beginning of
your business is important. Whatever system you use, it will The number 0001 is
need to remain constant for a long time. used instead of the
number 1 to keep the
One popular numbering and filing method is to begin the file length of the file num-
number with the year you open the case, such as 03 for the bers constant for the
first 9999 files you open
year 2003. Then use the first letter of your client’s last name
following the year. For example, suppose your client’s name
is John Adams and he’s your first new case of the year. You
would assign the case number 03A0001 (03 for the year,
A for Adams, and 0001 for the first case). Then suppose
Robert Dunbar becomes your next client. His case file number
would be 03D0002. A few months and many cases later, you
acquire a new client, Mary Zimmerman. You look at your
assignment log for the last assigned number, and find it’s
108. You therefore assign her case the file number 03Z0109.
You should use a case file number to reference related pieces
of evidence. Suppose you take pictures for a case. You can
label the roll of film with the case file number as a reference.
You’ll know which case you took the photographs for and
where to file the photos after they return from the lab.
Without a file number, you would have no way of knowing

what case the photographs belong to. Using the case file
number works especially well if you’re working on several
cases for the same client.
There are many methods used to assign case file numbers to
new cases. Another method uses numbers starting with 0001
and continuing to 9999, providing you with 9999 case file
numbers all the same length. Use the system that works
best for you.
File Log
An important part of file tracking is your file log. If you’re
computerized, the computer program can be set up to auto-
matically number each case with the next number in order.
For a beginning business without fancy software programs,
the easiest way to track files is to dedicate a small notebook
to act as your master file log. See the boxed item for an
example of what the first page of your new business’s master
file log would look like after the first nine assignments.
Sample File Log

Date Client Contact Subject Type Date File
Opened Closed Number
09/11/03 Dewey Truman, Esq. Doug Dewey John Doe SKT 11/16/03 03D0001
09/12/03 Clarence Cirk Clarence Cirk Arlene Cirk SUR 12/06/03 03C0002
10/11/03 Ann Yost, Attorney Ann Yost MVA PHO 03Y0003
11/04/03 Acme Insurance Joe Claims John Doe INS 12/11/03 03A0004
11/04/03 New State Sarah Going Mary Doe INS 03N0005

Insurance
Department
11/09/03 Suzie Cert Suzie Cert Michael Cert DOM 03C0006
11/14/03 Joe’s Shoes Joe Toe Shopping SHS 11/21/03 03J0007
11/14/03 Sam Dot Sam Dot Sharon Dot DOM 03D0008
11/19/03 AAA Detectives Morris Eye Polk County RRR 11/20/03 03A0009

Supplies and Equipment
A basic vehicle is prefer-
Once you have a grasp of your assignment, you’ll need to able for investigation
determine the supplies and equipment necessary to complete work—a flashy car that
the job. Of course, it would be inefficient to have to start from attracts attention isn’t
the best choice.
scratch for every case. As a professional private investigator,
you’ll have certain basic tools and supply items ready at all
times. A professional investigator develops the habit of never
going out without paper and pen or pencil. Daily planner
notebooks are used by many private investigators. Besides
your basic writing material, you’ll eventually form the habit of
always having a small recorder and a camera and film with
you. A cellular phone and a reliable means of transportation
are also necessary for anyone in the investigation business.
Even though the basic necessities mentioned here will
become a part of your everyday existence, their condition and
readiness must be checked before beginning work on every
new case. You wouldn’t want to be in a position to take a
crucial photograph and run out of film.
In your early days as an investigator, you should regularly
use checklists. Make a list for each new case or activity.
As you gain experience, some of the items will become auto-
matic, and the checklists you need to work with will get
shorter. An equipment and supplies list for a locate and
interview case might be as follows: An interview is an
exchange of information
• Tape recorder between two or more
individuals.
• Recording tapes
• Notebook or pad
• Pens and a pencil
• Cellular phone
• Reliable vehicle (The case could require travel beyond

public transportation.)
• 35mm or digital camera with film or memory cards
An investigator needs to carry a small tape recorder for note

taking, even when statements are going to be written out.
You probably wouldn’t need a camera on an interviewing

assignment, although a photo of the person interviewed might
be helpful to augment the statement secured. The cellular
phone will become another part of your everyday life (Figure 9).
Pay phones used to be readily available almost everywhere,
but with the proliferation of cellular phones and calling cards,
pay phones are becoming harder to find when you need one.
FIGURE 9—Cellular phones

are necessary equipment
for a private investigator.
Beyond the basics necessary for almost any work you do,
what other specific items of equipment or supplies might this
case require? For surveillance in the woods, you might need
camouflage clothing and heavy boots. For a trip to the library
where you expect to make copies, you might need a pocket
full of loose change or a library copy card. The key is plan-
ning and thinking ahead. Right when you set the file up is
the time to determine what special items you might need to
work the case. You don’t want to have to stop in the middle
of your investigation to go get a needed item.

Case Notes
The purpose of an investigation is to gather facts. The purpose
of an investigation report is to communicate those facts to
others. The most obvious requirement in preparation for
writing a good report is conducting a thorough and proper
investigation and taking complete, accurate notes of all the
facts and details obtained during the investigation. The fol-
lowing discussion of taking notes is for the new investigator
assigned to a preliminary investigation (an initial investigation
to determine basic facts about an incident).
As your work on an investigation proceeds, your case notes
will reflect such things as
• Names, addresses, directions, and times
• Exact identification and descriptions of each item of

evidence you observe or obtain
• Notations of the marking and disposition of potential

evidence, including photographs, videotapes, and cas-
sette tape recordings, and any sketches you may have
made
• All facts, with details, you obtain
• All statements, with details, made by witnesses or other

persons who provide information about the subject of
your investigation
• Complete identifying information on each person who

makes statements or gives information
• Details of the follow-up on each lead and of the search

for leads
• Details of the exact route taken by a subject under

surveillance
The facts and details recorded in your case notes are what
you draw the content of your final report from. Using words
and partial sentences is sufficient in your case notes,
because you simply need to record the findings for informa-
tion and reference. However, you must make certain the
information you record in your notes is complete and clear

enough to enable you to use it for reference when writing
your final report. For example, your notes might look like
the following:
Subject: Martin Harris, W/M, age 36, 278
Smallburg Ave.
01/08/03, 6:45 p.m. Set up Surv at subject’s work,
CyberFuture
7:30 P.M. Subject walked to east parking lot
1999 Buick, Gray KS Lic. ABC1345
N. on Marktree Rd. 5 mi
East on Rte. 347 6 miles
Tall Oak Garden Apartments, apt. 12-c
W/F, 25–30, kissed and entered apartment
In the final report you would write this same information in
complete sentences in the following, more formal format.
The subject, Martin Harris, a white male, age 36, residing
at 278 Smallburg Ave., Anytown, exited his place of
employment, Cybertronics, 147 Marktree Road, on
Monday, 01/08/03, at approximately 7:30 P.M. eastern
standard time. He entered a 1999 gray Buick, Kansas
license plate ABC-1345, and drove north on Marktree
Road five miles, turned right onto Route 347 and drove
another six miles to the Tall Oak Garden Apartments.
The subject entered the north parking lot entrance and
parked in front of apartment 12-c. He walked up to the
front door of apartment 12-c and knocked on the door.
A white female approximately 25 to 30 years old opened
the door. They exchanged words and then embraced
each other and kissed each other on the lips. Mr. Harris
then entered apartment 12-c.
You need to record enough details to be able to recall all the
information you obtain during an investigation. Record, in
detail, all descriptions, remarks, statements, interviews,
observations, actions taken, and any results obtained
through that action. Some investigators keep field notes
in a notebook that contains notes on all the things they did
between the time the first entry was made on the first page

until the last page of the book is filled up. Other investigators
devote a specific notebook to each case. Still others write field
notes on sheets of paper that are detached and kept in each
case file. Whichever system you use, you should begin every
page with the date and time and your name or initials.
The actual story in the following boxed item, written by a
successful private investigator, demonstrates the importance
of good records.
Keeping a Diary
I started keeping a diary after I investigated a case of
potential insurance fraud. I was later named in a law-
suit, and the plaintiff claimed that I had approached him
and his wife in a bar and humiliated them in front of his
business clients by claiming I was going to prove he had
committed insurance fraud. When I found out the date
of this supposed occurrence, I had to go back and try to
remember where I had been on that date. Luckily, the
date they claimed was the same as my 30th wedding
anniversary, so I knew where I had been. When the
plaintiff’s lawyer realized he was being duped, the case
against me was dropped.
The case in “Keeping a Diary” brings up another point—that

investigators have to be somewhat thick-skinned. Usually, if
you make your client happy, you make someone on the other
side unhappy. Some individuals, or their lawyers, aren’t above
accusing investigators of all sorts of illegal, immoral, and
unethical actions to justify the fact that they lost their case.
The type of investigations you specialize in will influence your
choice of note taking and preservation. During each investi-
gation, you must record all the facts and details you’ll need
to write a complete, accurate report. Document all details that
are relevant to the case. From the beginning of the investiga-
tion (the completion of the case assignment sheet), you should
keep in mind the type of case you’re investigating so that
you’ll be certain to record all facts relevant to the particular
case. For example, the particulars you need to obtain and
record for a missing person case and those that you need for
a workers’ compensation case are different. The type of case
you’re investigating affects the details you record, the type
of evidence you collect, and the statements of persons you
interview.

Good notes contain the complete, accurate details that you’ll
need to write your report. Most investigators don’t recall from
memory all the details obtained during an investigation. While
conducting an investigation, a professional concentrates on
obtaining and documenting all relevant information rather
than on trying to memorize details. Therefore, taking written
notes is a practical way to record relevant facts and to retain
them for further use.
Another reason to take accurate notes is because you might
have to testify as a witness in court. Precise notes are needed
to provide sound testimony. If you’re called to testify, the
attorneys from either side might request to review your notes.
If you have accurate, complete, and objective notes, the
attorneys have less reason to question the validity of your
testimony than if you attempt to testify from memory.
The primary purpose of field notes is to record crucial infor-
mation at the moment you receive it. A proper form and a
systematic way of taking notes will help you achieve accurate
notes. If you choose to use the “separate notebook for each
case” system, make sure you have a new notebook for each
new case to organize your facts. Identify the case notebook by
writing your name and the case number on the front of the
notebook, and write your name or initials on each page. If
you remove pages from a notebook for any reason, you’ll be
able to identify the notes as the ones you wrote because of
your name or initials. A ballpoint pen is best for making
notes, because a pencil could smear or fade and felt-tip
pens and markers tend to smear and run in wet weather.
While your memory is fresh, you should make certain all
notes are legible enough for you to read, and that you spell
names, addresses, and places correctly. If your writing is
illegible or marginal, you’ll have to develop a system to com-
pensate. For example, some investigators who don’t write
neatly or clearly either dictate into a recorder or use their
field notes as reminder prompts and enter more thorough
notes into a laptop computer at the end of the day, while
their memory is still fresh. You’re likely to misspell names,
addresses, and places on your final report if you misspell
them in your notes, so you must slow down and be certain
crucial items like numbers and the spelling of names are

clear and accurate when you write them. If there’s any doubt
about spelling of names or places, look up the correct
spelling when you recopy your notes.
Use only standard abbreviations that most people readily
understand; for example, W/M for white male, Feb. for
February, and St. for street. Abbreviations other than stan-
dard ones can result in confusion or misinterpretation. You
should print persons’ names in capital letters so that they’ll
stand out in the notes; for example, subject HARRIS.
The Basic Questions

To develop the ability to ask the right questions and end up
with an accurate, complete, concise, and clear report, you
can keep and regularly review an interview question check-
list. Figure 10 shows one such checklist. The checklist details
the important questions—Who? What? When? Where? How?
and Why?—in relation to many kinds of investigations. These
are the basic six questions that must be answered in every
investigation to produce a meaningful result.
Sample Checklist
WHO?
1. In relation to persons connected with the incident:
• Who was involved?
• Who is the subject?
• Who is the victim (of a crime or a tort)?
• Who else might have been involved in any way?
• Who are the witnesses?
• Who made statements or gave information that
might be relevant?
• Who turned over evidence to the police or others?
(Continued)
FIGURE 10—A checklist such as the one shown here, if reviewed over and over, will
help you develop the ability to automatically think of the right questions during an
interview. If reviewed when setting up a new case, it will help you remember and
make note of information you need to seek during the investigation.

2. In relation to police officers or insurance adjusters
participating in the investigation:
• Who responded to the call?
• Who conducted the investigation?
• Who was first at the scene?
• Who conducted the search?
• Who obtained evidence?
• Who marked, preserved, and took custody of evidence?
• Who interviewed each witness?
• Who notified another officer, adjuster, expert, or
agency?
• Who dusted for fingerprints (or performed any
other technical job)?
• Who identified and who located the subject?
• Who was unable to identify or locate the subject?
WHAT?
1. In relation to the incident:
• What information was reported?
• What offense was observed?
• What damage was done?
• What injuries were received?
• What was the condition of the injured people?
• What statements were made by the people
involved?
• What statements were made by the witnesses?
2. In relation to the evidence:
• What evidence was obtained?
• What evidence couldn’t be obtained?
3. In relation to police or insurance company action:
• What police or other official action was taken?
• What officers or adjusters were notified?
• What agencies were notified?
• What further action is indicated?
FIGURE 10—Continued

WHEN? (hour, day, month, year)
• When were the people involved observed at the
scene?
• When did the people involved leave the scene?
• When did the witnesses observe the scene?
• When did the witnesses arrive?
• When did the witnesses leave?
• When did the officer or adjuster arrive at the
scene?
• When did the officer or adjuster contact the people
involved?
• When did the officer or adjuster take the witnesses’
statements?
• When did the officer or adjuster check out other
possible sources of information?
• When did the officer or adjuster obtain each item
of evidence?
• When did the officer or adjuster notify another
officer, agency, or insurance company?
• When did assisting officers or experts from other
agencies arrive at the scene?
• When did the officer or adjuster receive a report
from assisting officers or experts (such as a report
from a technician in the crime laboratory, or a fire
cause and origin expert)?
• When was the claim approved or denied?
• When was the incident determined to be a crime?
• When was the perpetrator identified?
• When was a warrant for arrest obtained?
• When was the perpetrator arrested?
• When did the officer inform the perpetrator of his
or her rights?
• When was the perpetrator charged?

WHERE? (exact location, address)
• Where did the incident take place?
• Where was the incident/accident reported?
• Where were the people involved?
• Where was the victim (in crime/tort case)?
• Where does the victim reside?
• Where were the witnesses?
• Where do the witnesses reside?
• Where did the witness or victim go (or where was
he or she removed to)?
• Where did the people involved obtain tools or
other items?
• Where were the tools and other items discovered?
• Where was the subject of a search last seen?
• Where is the subject at present?
• Where does the subject reside?
3. In relation to police or insurance adjuster action:
• Where was the evidence obtained?
• Where was the evidence marked?
• Where was the evidence stored?
• Where did the officer or adjuster interview the
people involved?
• Where did the officer or adjuster interview the
witnesses?
• Where did the witnesses make their statements?
HOW?
• How did the incident/accident occur?
• How were tools and other items used?
• How was the incident/accident discovered?
• How was the incident/accident reported?

• How did the people involved get to the scene of
the incident/accident?
• How did the witnesses get to the scene of the
incident/accident?
• How did the injured people get to the hospital?
• How did the people involved obtain the tools or
other items used?
• How did the people involved use the tools or other
items?
• How did the witnesses happen to be on the scene?
• How did the officer or adjuster identify the people
involved?
• How did the officer or adjuster locate witnesses?
• How did the officer or adjuster obtain evidence?
WHY?
• Why did the incident occur?
• Why was the incident reported to the police or
insurance company?
• Why was there a lapse of time between the occur-
rence of the incident and the reporting of it (if
there was one)?
• Why was there a lapse of time between the report-
ing of the incident and the arrival of the police
officers, insurance adjuster, or emergency person-
nel (if there was one)?
2. In relation to others involved:
• Why was a witness at the scene?
• Why was a witness eager, willing, or hesitant to
give information?
• Why was the item or person involved moved from
the scene?

For example, to answer the question “Who?” in relation to
the subject you’re investigating, you record all identifying
information such as your subject’s name, sex, race, age,
date of birth, occupation, address, telephone number (both
home and business), and any other particular identifying
information. You should record the same information on any
witnesses you interview or anyone else who makes a state-
ment regarding the investigation.
When you investigate an incident that’s the subject of a
police investigation, such as a motor vehicle accident or a
fire suspected of resulting from arson, you would record the
information necessary to answer the question “Who?” in
relation to the police officers and fire officials who participated
in the official investigation. For example, Who responded to
the call? Who conducted the investigation? Who preserved
the scene? Who retrieved the evidence? Who marked the
evidence? Who transported the evidence? Who took custody
of the evidence?
In a similar manner, you must record all facts and details
necessary to answer the other five basic questions as follows.
What? in relation to all details of what happened: What inci-
dent was reported? What incident occurred? What action was
taken? What statements were made by the client, by the
witness, by the subject? What agencies were notified? What
further action is indicated?
When? in relation to the date and time that each action or
event occurred: When was the incident discovered? When was
the act committed? When did the police arrive? When were
the witnesses and the victim contacted? When were they
interviewed? When was a subject or potential witness last
seen? When was an arrest made? When was the claim
denied?
Where? in relation to the exact location of each action and
event and in the investigation: Where was the subject and
where does he or she live? Where did the meeting take place?
Where was the information found? Where were the witnesses
interviewed? Where was the evidence recovered, marked, and
stored? Where does the subject work? Where can the subject
be found?

How? in relation to the manner in which all actions and
events occurred: How was the incident committed? How was
the incident discovered? How was it reported? How did the
client or witness get to the location? How did the people
involved get the weapons or tools? How did they use them?
How did the witnesses happen to be on the scene?
Why? in relation to the reason for all actions and events that
occurred: Why did the incident occur? Why was the incident
reported? Why did a time lapse occur? Why were particular
tools or other items used? Why was the particular means of
entry used? Why was someone injured? Why was a person
cooperative or uncooperative? Why was the victim moved from
the scene?
The “why” of most civil investigations is generally at the core
of the investigation, so it’s unreasonable to expect a “correct”
answer to the question “Why did it happen?” from any one
individual. Different people will have different opinions about
the “why” issues. This is one place you’re interested in getting
the opinions of witnesses (as opposed to simply facts that they
know). Even though opinions aren’t admissible as evidence,
when you ask witnesses for their opinions about why some-
thing happened, it’s a form of open-ended question. In
explaining the reasons for their opinions, they might disclose
things they saw, heard, or know about that they hadn’t
previously thought to mention.
The checklist in Figure 10 isn’t intended to be a step-by-step
approach to an investigation. It’s not an exhaustive list of
potential questions, nor is it expected that anyone would
actually use this checklist to conduct an interview. It’s
intended to be a guide to help you record all essential
information discovered during your investigation. You won’t
use every question in every investigation. Obviously, some
questions won’t apply to the investigation you’re conducting.
Also, you’ll need to probe deeper in some situations than
covered in the list of questions.
When formulating your approach to an interview with the
help of the list, simply omit the questions that seem to be
outside the scope of your investigation and use the others
conversationally. By referring to the checklist regularly while
you’re gaining experience, you can ensure that you won’t

forget to obtain essential information. Also, by using the
checklist, you’ll form the habit of keeping in mind the types
of questions to ask throughout the investigation. Inexperienced
investigators can use the checklist as a reference until they’ve
developed their own comprehensive series of questions they
feel confident with. Experienced investigators can use the
checklist as a reminder just to double-check themselves on
cases outside their normal scope of experience. After a while,
you’ll be able to mentally review the checklist and formulate
questions relevant to your case.
Evidence Handling
One of the basics of a private investigation business is the
handling of evidence and potential evidence. At a minimum,
your business must have a system in place for handling
evidence and a designated place to keep items of evidence.
This isn’t the kind of thing you can leave to be done in a
haphazard manner.
You might take photographs or videos during a surveillance
operation or use audiocassette tapes to record conversations
with witnesses or subjects (Figure 11). You might collect
pieces of broken china from a home that was robbed or
debris from the scene of an accident. Photographs, videos,
cassette tapes, and physical items are considered evidence;
you should properly mark them in a record of day-to-day
activities, or log. Maintaining a log will help you manage your
investigation and subsequently your business. Then you
would secure the evidence in a safe place until you need it in
court or as a reference for your investigation. Negatives of
photographs, for example, should be kept in acid-free paper
sleeves and be stored in a cool, dry place. Leaving them in
direct sunlight or an area where moisture could get to them
could destroy them. A piece of evidence from a burned building
could be thrown out as junk unless it’s properly marked and
stored in a secure place.
During an investigation, you can acquire evidence in different
ways. First, you could recover evidence, for example, at an
accident scene. Second, you might create evidence by record-
ing videos and audiotapes or by taking photographs. Third,
others might find evidence and turn it over to you.

FIGURE 11—Whenever you take
photos or collect any
kind of evidence, you’ll need
to store the evidence properly.
However you recover evidence, you should mark it and log it

in an evidence logbook called an evidence recovery log.
Marking evidence is necessary for identification at a later
date. You must maintain a chain of evidence, a documented
path of the evidence from time of discovery to time of release,
to protect the integrity of the evidence (especially if it’s to be
used in a court case).
You can mark evidence in several ways. It’s preferable to mark
identifying information right on the evidence if the evidence is
large enough to accommodate the information and marking it
won’t destroy it in any way. If not, write the information on a
tag or label and affix it to the evidence. As an alternative, you
can also put pieces of evidence in bags and seal them, mark-
ing the outside of the bag with the identification information.
It’s important to seal the bag so nothing can be lost or added
to the evidence without your knowledge. You should include
the following identifying information on the evidence.
• Case number
• Assigned item number
• Description
• Area of recovery
• Method of recovery

• Date and time the evidence was recovered
• Who recovered the evidence
• Initials of the investigator taking custody of the evidence
Figure 12 shows an example of a standard evidence recovery

An evidence tag can be log. The information entered on the log is the same as the
any type of label or information recorded on the evidence itself, so you can easily
sticker. locate evidence stored in an evidence locker or safe. The
items of evidence listed in Figure 12 are typical items recov-
ered by a private investigator. Each item listing contains all
the information about each piece of evidence.
Evidence Recovery Log

CASE NUMBER _______
Item Description Area of Method of Recovered Date Time

Number Recovery Recovery By
1. Broken red Rt. 112/ found on RJ Rivera 2/2/03 12:00 P.M.

plastic lens Peconic
2. Beer bottle Rt. 112/ found in RJ Rivera 2/2/03 3:00 P.M.

Peconic defendant’s car
3. Tape of statement n/a witness RJ Rivera 2/25/03 9:00 A.M.

by witness Jones interview
FIGURE 12—Evidence Recovery Log
Item 1 is a piece of lens from a car turn signal, recovered at

the scene of a hit-and-run accident at the intersection of
Route 112 and Peconic Ave. Investigator RJ Rivera found the
lens on 2/2/03 at 12:00 P.M. The fragment is too small to
mark the information on it, so you would probably place it in
an evidence bag and write the information on the bag. Item 2
is a beer bottle recovered from the defendant’s car at the
accident scene. This evidence might be helpful in establishing
fault in the accident and recovering damages for the client/
plaintiff. This piece of evidence would probably be labeled
with a tag. Item 3 is a tape of a witness statement that the
defendant swerved into the oncoming lane, causing the acci-
dent. Whatever the evidence, you mark it and then log it to
maintain the chain of evidence and its integrity. Each case
should have its own evidence log.

When taking photographs, you should use a photograph
log, which is designed to record all the photographs taken
during an investigation. It’s also useful to use a cover sheet
(Figure 13). The cover sheet heading should include the
usual company information. After you fill in all the informa-
tion on the cover sheet, take a picture of it. You should use
the first picture of each new roll of film to photograph the
cover sheet. This way, you’ll have the photographer’s name,
the date and location, the type of incident, and the case
number on the roll of film, so there can’t be any confusion
about what case the photos relate to. Even if you’re using a
digital camera, having a picture of the cover sheet is a good
idea to avoid mistakes.
RJH INVESTIGATIONS
317 Main Street,
Anytown, NY 11763 (516) 555-9800
* * * * *PHOTOS TAKEN* * * * *
By ________________________________________________________
Case # ________________________________________________________
Date ________________________________________________________
Location ________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
FIGURE 13—Photograph Log Cover Sheet
Figure 14 shows an example of a photograph log. The most

important elements to document are the photograph number
and a description of the subject of the photograph. As you
complete the photo log, be as descriptive as possible. It’s not
uncommon to get your photos developed and not be sure
what your target was. For example, you might get a great
shot of a tree and then neglect to document the significance
of the tree. If the tree is the scene of an accident, take a
wide-angle shot establishing the scene, as well as close-ups
of impact marks or damage that is significant to your case.

Photograph Log
Case number: _____________________________________________________
Type of film: ____________________________________________________
Photo # Description Date Time
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
FIGURE 14—Photograph Log
The Case File

The case file for a case is what you carry with you as you
work on the case. Items in the case file should include
1. A copy of the assignment sheet. Another copy of the
assignment sheet should be kept separately and shouldn’t
be taken out of the office. It’s your backup if your working
file, the one you carry in the field with you, gets lost or
stolen.
2. A time and expense form
3. All case notes
4. Copies of items received from the client such as releases,
photos, etc.
Every investigator tends to develop his or her own way of
organizing things. A convenient way to organize the case file
is to staple the assignment sheet inside the front cover and
the time and expense sheet inside the back cover. However,
if you’re working for someone else, it’s very important that
you follow instructions when you do things like organizing
your files. Even if you think another way might be better, the
management of the company has a reason for wanting things
done the same way by all employees.

Witness Interviews
Unlike police investigations where officers are generally mov-
ing quickly in emergency situations, private investigators can
An interview is a
frequently plan contacts ahead of time. Insurance companies
conversation conducted
and attorneys preparing a case for possible litigation some- with the purpose of
times prefer signed or recorded statements from the involved getting information
people or witnesses rather than the investigator’s report on from the interviewee.
A statement is informa-
what was said. tion from such a
conversation preserved
Until you have extensive experience with either a particular
in some permanent
kind of investigation or a particular client, you’ll have to go form, such as written
straight to the client to make some of your strategy decisions. or recorded.
If the client wants a signed or recorded statement from some-
one, it should be your goal to provide exactly what’s requested.
If they want you to spend less time and only give them your
report of what was said, you should know that ahead of time
and comply. If they want still photos or video, you need to
know before you go out to do the work so you’re sure to take
the right equipment. After you have experience, you’ll make
more of those decisions on the fly, but in the early days,
always ask ahead of time.
Whether you plan on recording a statement or writing it out,
you’ll still need to take notes whenever possible. A recorded
statement should never be taken without a pre-statement
interview. During the pre-statement interview, you’ll take notes
to help you remember what to ask while you’re recording
the statement. The actual procedures for recording and hand-
writing statements will be covered in a later unit of this
program.
Taking Notes during an Interview

It will be necessary for you to take notes on information
you receive during many interviews with witnesses, records
custodians, and your clients (Figure 15). Have you ever been
interviewed by a recruiter or a personnel director when looking
for employment? If you have, you know the feeling you got
when the interviewer started asking a lot of questions, one
after the other. You might have become uneasy or tense,
which made it more difficult to talk to the interviewer.

FIGURE 15—Always take
notes during interviews.
You’ll want to develop the skill of reading people well enough

to sense how fast you can proceed in an interview without
making them uneasy.
During an interview, you should do a lot of listening and
volunteer noncritical information from time to time. At a
comfortable point early in the interview, prepare to take notes
on the interview. Before you start taking notes, however,
casually mention to the person that you would like to take
notes so that you get the facts correct. For example, you
could say something like this, “If you don’t mind, I’d like to
write notes so I can be sure to be accurate.” The words, “if
you don’t mind,” are polite and courteous; they show your
concern. The words, “so I can be sure to be accurate” indicate
you’re concerned with accurately reporting what he or she
tells you. Being polite and concerned should help to put the
person at ease and make your job of writing notes of the wit-
ness’s comments a little easier.
Depending on the situation, the right time to start taking
notes might be when you first begin talking or after a few
minutes of warm-up small talk. When you ask a question,
you should let the person answer it in his or her own words.
Let the person tell you the whole story before you ask addi-
tional questions—don’t interrupt. Once the person you’re
interviewing completes the description of what happened,
then you ask additional, more specific questions.

When you start taking notes of an interview, even if you plan
on securing a statement later, remember to write the following
at the top of a new note page.
• The investigation case number
• The time and date, e.g., Wednesday, January 31, 2003,

7:40 P.M.
• The location of the interview
• The name of the person you’re interviewing
If your goal is to obtain a recorded or handwritten statement,

describe what you would like to do right away to determine if
the witness is going to agree or object. If the witness objects
to giving a statement, you can back off and continue to take
notes while talking.
Let’s suppose you’re interviewing a witness. The following
procedure applies to the way you conduct an interview and
take notes. (More detailed mechanics of beginning a statement
or starting a recording will be dealt with in a later unit.) You
begin your formal interview with factual information on the
witness. Concentrate on getting the witness’s name, address,
date of birth, age, occupation, employer, and both home and
business phone numbers. Such information provides a
means of contacting the witness at a later date.
Following the factual information, you continue with questions
that will enable you to review the witness’s story and ques-
tions that will encourage the witness to supply additional
information and to clarify any contradictions, discrepancies,
or omissions. Make accurate notes of what the witness says,
recording all the key statements in the exact words the witness
uses. You should seek all the answers to the questions Who?
What? When? Where? How? and Why?
During the interview, ask one question at a time, and write
your notes before moving on. Ask general questions and
allow the witness to elaborate in his or her own way. Make
notes of the witness’s responses as factual, hearsay, or as
conclusions drawn by the witness. If you don’t make the dis-
tinctions during the interview and all you have is your notes
of the conversation to go on, it will be difficult to distinguish
fact from opinion later for the final report. If the witness

changes a statement you already recorded in your notes, it’s
best not to erase your notes. They should show the discrep-
ancy and its clarification. For example, after you’ve written
that the witness heard a crash at approximately 9:30 P.M.,
the witness later states that it must have been closer to
9:15 because she remembered she sets her bedroom clock
15 minutes fast. You can make corrections in one of the
following two ways:
Option 1: Add a note saying something like this: “The witness
clarified that she sets her clock 15 minutes fast so she won’t
be late for work. She indicates that because of this considera-
tion, the time of the crash was closer to 9:15 P.M.” This
method leaves the original statement intact.
Option 2: Draw a single line through the original statement,
leaving it readable, and write in the change that you made.
You should initial the change to show that you made the
change. You want the record of the interview to be accurate,
so you must record all the information the witness gives,
including discrepancies and their clarifications.
When you close the interview or finalize the statement, the
witness should be satisfied the information you recorded is
accurate. Express your appreciation for the witness’s cooper-
ation and advise him or her that you might need to contact
him or her again later.
Before you go on to learn about accounts receivable manage-
ment, take time to complete Self-Check 3.

Self-Check 3
1. What six basic questions will help you document your case information?
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
2. Suppose you acquire a new client, Samuel Jones, on April 15, 2003. Your
last assigned case number was 03Z0109. According to the popular filing system
described in the previous section, what would be Mr. Jones’ case number?
__________________________________________________________
Questions 3–6: Indicate whether each of the following statements is True or False.
____ 3. To ensure that your notes are as complete as possible, you should write
in complete sentences and paragraphs as opposed to words and phrases.
____ 4. Starting a new notebook for each new case is one system that makes
the task of finding relevant notes for a case easier and provides a more
efficient filing system for the case notes.
____ 5. As a new private investigator, you should take any case that comes
along to get your business up and running.
____ 6. If you need to rewrite something in your notes during an interview,

you should initial the change.

ACCOUNTS RECEIVABLE
MANAGEMENT (COLLECTIONS)
Accounts Receivable
Accounts receivable is the money your business is owed.
Although it’s tempting, it’s never a good idea to treat
accounts receivable as money in the bank, because it’s
not—there’s always a chance the client won’t pay the bill.
The routine problem of getting clients to pay their bills is
never dealt with by fiction writers, on TV or in the movies
(Figure 16). The ideal way to operate a private detective busi-
ness would be to require all clients to pay for services in
advance, but the ideal is something most of us never get to
achieve. If a private investigator were fortunate enough to have
wealthy individuals in unending supply, requiring payment
in advance might work. Most private investigators, however,
aren’t able to count on very many wealthy clients. When you
go into the private investigation business, especially if you
don’t have a clear specialty, you must expect to have many
kinds of clients. The usual mix of clients for an average
private investigator might be as follows:
• Private individuals
• Small businesses
• Corporate clients
• Attorney clients
• Insurance adjusters and claims examiners
• Other private investigators
Some of the types of clients on this list are notorious for

being slow paying, but a small private investigation agency
usually wouldn’t be able to get away with requiring payment
in advance. Even though most corporate and business
clients—especially from the insurance industry—can be
counted on to pay eventually, it’s not uncommon to have to
wait 60 days or more for payment.

FIGURE 16—Getting the client to pay you
for your services is as important as the
investigation itself.
Collections
Using the receivables outstanding constant (ROC) will help
keep your business healthy and reduce your stress. Even if
you go to work for someone else, you can make yourself a
more valuable employee by taking an interest in and follow-
ing up on the accounts receivables for the cases you work.
1. Keep a clear accounts receivable record. Copies of all
unpaid invoices kept chronologically in a “collections” file
is a simple and effective system. You can keep a record
of calls made and promises received right on the invoice
copy.
2. Schedule a date and time on a weekly basis to review
accounts receivable
3. At the scheduled time, total all unpaid receivables to get
a receivables outstanding total. For example:
As of May 1, you have three jobs that were completed,
but remain unpaid 30 days after billing, and two jobs
that were completed and remain unpaid, but aren’t yet
overdue.

Dr. Julian Bashir owes $900; billing date April 20.
Cho Mei-yun, Esq. owes $850; billing date April 12.
George Jones, Esq. owes $600; billing date March 30.
Celia Rodriquez owes $300; billing date March 15.
American Insurance Co. of Nevada owes $1,500;
billing date Feb. 15.
Add these receivables to get the receivables outstanding total:
$600 + 300 + 1,500 + 850 + 900 = $4,150
4. Calculate the average gross amount billed monthly for the
past three months. For example:
From Feb. 1–May 1 you had 10 jobs completed,
totaling $9,000. Calculate the average amount
billed monthly by dividing the total by the number
of months (3):
$9,000 ÷ 3 = $3,000 average billed per month
5. Divide your total receivables by your average monthly
billing amount to get your receivables outstanding
constant (ROC):
$4,150 ÷ $3,000 = 1.38
6. Place a telephone call (see below) to every client who was
invoiced over 30 days ago. In our example, you’d call
George Jones, Celia Rodriguez, and American Insurance
Co. of Nevada. You’d have called American Insurance Co.
of Nevada already in April; this would be your second call.
7. If the receivables outstanding constant increases more
than a fraction of a point (a typical acceptable ROC
number might be 1.5), shorten the number of days in
step six to less than 30 days.
After the first call at 30 days, the timing and frequency of
future calls depends on the results of the previous call. If no
one ever returned your calls or messages from the attempt at
30 days, you would try again a week later. If they promised
payment within two weeks, you would wait until the first
calling day after the two weeks passed to call again.
Regularly calculating the receivables outstanding constant is
an easy way to monitor the health of your accounts receivable.
It gives you a single, easy-to-compare number representing
the number of months of your earnings still unpaid by clients.

For example: If you bill an average of $10,000 a month and
your receivables outstanding total is $15,000, your receiv-
ables outstanding constant ratio is 1.5. This means it takes
you an average of 11/2 months, or 45 days, to get paid by a
client. If your accounts receivable management procedures
are good or you have many cash in advance customers, your
receivables outstanding constant might be much better, like
1.1 or even less than 1.
Every business is unique. You’ll have to determine what ROC
is acceptable for your particular business. The important
thing is to have something that will work as an early warning
system. If you don’t realize your accounts receivable are getting
out of hand until many bills are over 90 days past due and
you’re already unable to pay your own bills, it’s much more
difficult to find a solution. Clients who are having cash flow
problems will pay creditors who follow up at 30 days before
they pay those who don’t.
The ability to make effective accounts receivable phone calls
is as important to your business success as being able to do
good investigative interviews. The call isn’t for the purpose of
dunning or harassing the client. It should be thought of as a
public relations call. It’s for the purpose of determining if
there’s some problem you can help solve.
For example: Most corporations, law firms, and insurance
company offices have checks issued by someone other than
the person who hired you, usually in a different department.
When the person who hired you gets your report and bill,
they’re supposed to approve the bill and forward it on to the
accounts payable department. However, it’s not unusual for
it to get filed erroneously in the investigation folder and sit
there while you aren’t getting paid. If you call and find out it
hasn’t even been submitted for payment yet, you’ll at least
get the error corrected, and the payment process begun. If
you wait until the bill is 60 days overdue before calling,
there’s a greater chance the file will have already been closed
and put away in storage. With personnel turnover high in
many offices, the person who hired you might not even be
employed there any more. In cases like this, you end up
spending as much of your valuable time getting paid as you
did doing the work. This is not only a good reason to make

your accounts receivable calls sooner instead of later, it’s
another good example of why you must have a fee structure
that provides more than just breakeven revenue. You don’t
want your business going bankrupt while you wait for pay-
ments to come in.
Before moving on to the next section, take a moment to
complete Self-Check 4.
Self-Check 4
1. True or False? Once a client has been billed it’s as good as “money in the
bank.”
2. How often should a business owner review the accounts receivable?

__________________________________________________________
3. What is it about the receivables outstanding constant that an agency owner

should watch for?
__________________________________________________________
4. True or False? Corporate clients usually pay their bills quickly.

ESTABLISHING RESOURCES
In the investigation business, your end product is the result
of your investigative work. The raw material your product is
made of is information obtained from the sources you select
as an investigator. Just as a manufacturer can’t wait until
their product is on the production line to figure out where the
necessary raw material will come from, a private investigator
must have some resources lined up before starting to work
on cases. Developing and becoming familiar with a basic set
of resources for use when working cases is part of establish-
ing your business. A well-organized business with everything
in place for accessing at least the most common information
resources will result in investigations getting better results,
more efficiently, for clients. Deciding exactly which resources
to use for each case is part of the investigation process, but
establishing some to start with is a business basic.
Free Resources
Libraries and Public Records

The public library and public records are the most obvious
free resources every private investigator needs to be familiar
with (Figure 17). Anyone can walk into a public library and
look at the books and ask questions of the librarians. Anyone
can also walk into a courthouse and look at books and
records and ask questions of the clerks.
Even though, technically, everyone is supposed to have
access to public records, they’re not always as easy to get to
as books in the library typically are. Most public records are
kept in inaccessible places, and only indexes are available to
the public. When a member of the public wants to see the
actual record, a clerk retrieves it and makes it available, sub-
ject to certain conditions, such as that it can’t be removed
from the room. If a member of the public wants a copy of a
record, there’s usually a charge. As a business, you won’t
need to do anything special to have access to free resources
like libraries and public records, other than possibly register
in some way to expedite access.

FIGURE 17—Public libraries are
important sources of information.
Freedom of Information Act

Some free information is only available if requested in a
certain way, using approved forms or an approved format.
The Freedom of Information Act (FOIA) created procedures
whereby any member of the public may obtain the records
of agencies of the federal government. Some information is
exempted from disclosure, however, including
• National security
• Internal agency rules
• Information exempted by other statutes (for example,

citizens’ tax returns)
• Business information (for example, trade secrets)
• Internal government memos
• Private matters (for example, medical records of

government employees)

• Law enforcement investigations, where disclosure would
interfere with an ongoing investigation or someone’s right
to a fair trial
• Regulation of financial institutions
• Location and geological information on oil wells
These exemptions aren’t mandatory—that is, the agency can

decide to disclose the information anyway. If the agency
refuses, it must give a reason.
Each state has its own public access laws that should be
consulted for access to state and local records. A good source
of these state laws is The Reporters’ Committee for Freedom
of the Press, Tapping Officials’ Secrets, at
http://www.rcfp.org/tapping/index.cgi
(Or go to http://www.rcfp.org and click on the Tapping
Officials’ Secrets link.) The information is organized by
state, or you can do a search.
Information from federal records available as a result of FOIA
is only available if requested in writing with certain information
included in the request (Figure 18). A lot of information on
FOIA resources is available on the Internet. One good source
of advice on how to obtain FOIA information is the ACLU’s
Web site: http://archive.aclu.org/library/foia.html.
Having the correct procedures and forms available in an
investigative office is a basic part of being in business.

[Date]
[Return Address]
ATTN: Rita Morgan, Freedom of Information Officer

USDA Forest Service
Stop 1143
1400 Independence Avenue, SW
Washington, DC 20250-1143
Dear Mrs. Morgan:
Under the Freedom of Information Act, 5 U.S.C. Sec. 552, I am requesting
access to copies of the following documents:
[Identify the records as clearly and specifically as possible, including the time
period applicable to the records you seek. For example:
Logging permits issued to the Beaver Logging Co. of Maine, during the years
1999–2000.]
In order to help determine my status to assess fees, you should know that I am
affiliated with a private corporation and am seeking information for use in the
company’s business. I agree to pay fees for this request up to a maximum of $
_______. If you estimate that the fees will exceed this limit, please inform me
first. [If there are any fees charged for searching or copying the records, please
let me know before you fill my request.]
[You need to specify if you’re a commercial requester, are representing an edu-
cational institution or noncommercial scientific institution, or are a member of
the news media or a public interest group. As a private investigator, you’re
requesting the information for commercial purposes.]
If you deny any part of this request, please cite each specific reason that you
think justifies your refusal to release the information. Please notify me of appeal
procedures available under the law.
If you have any questions processing this request, you may contact me at the
following telephone number [212-123-4567].
Sincerely,
[your signature]
FIGURE 18—A Freedom of Information Act letter must include certain items and be sent to a specific address.

Other Private Investigators
Other professional private investigators are a free resource
but, like other resources, this one requires some advance
preparation. Even though some investigators will give helpful
hints to other investigators just for the asking, you need to
verify the accuracy of what they give away. A much better
way to get help from other private investigators is to get
acquainted with them as friends and learn who you respect
and trust in the industry. This is done by going to investigative
association meetings and doing a lot of respectful listening.
Building alliances within the investigation industry not only
can provide a good source of free investigative help, it can
result in a good source of business. Assignments from other
private investigators amounts to 20 percent of the business
handled by many established investigators.
In-House Resources
Directories and Internet access are resources a business
might provide to its employees. Even if you’re self-employed,
your business will need to have certain resources in place for
your use when working cases. The list of possible in-house
resources is almost unlimited, but a few are worth mentioning.
One successful investigator, who established an agency in a
town where he had never lived, started out by asking every-
one he came in contact with if they happened to have any old
telephone directories they were no longer using. Many people
were glad to give the old directories away and free up shelf
space. He acquired directories by the dozen, and eventually
had an entire large bookshelf filled with directories dating
back 50 years. This shelf full of directories gave him and
his employees a way of determining who the neighbors were
for any old address.
Printed reverse directories are published by different compa-
nies for different parts of the country. Even though many of
these directories are available online and on CD, many people
still feel it’s worthwhile having the ones they use most fre-
quently on the bookshelf. Two companies that publish
reverse directories are R. H. Donnelly and R. L. Polk. Reverse
directories will be covered more later in the program.

Subscription Resources
Fee-based information services (a.k.a. subscription services,
information brokers, or gateways) provide a one-stop shop
service for huge amounts of information. These services sell
information from many sources, some of which they must
buy, some they collect themselves, and some they merely
repackage from public record sources. They each charge for
their services in some way. Some services charge a monthly
access fee, while others charge by the search or by the item of
information retrieved. With public records information, they’re
charging for making the information accessible on their site.
It’s probably available somewhere else for free, but if an
investigator can pay $2 or even $10 to get it in one minute
instead of spending two hours to get it free, it’s worth it.
Most active private investigation agencies subscribe to at
least one fee-based subscription information service, such
as Merlin (http://www.merlindata.com) or ChoicePoint
(https://www.choicepointonline.com/default.asp). In the
late 1990s and early 2000s, an extraordinary consolidation
and reshuffling of information brokers took place. Names
and contact details changed daily, and are still changing, as
companies merged or went out of business. The information
brokerage business also continually changes as new laws are
passed. For this reason, anyone who uses information brokers
on a regular basis needs to know how to effectively select and
use whatever service is best for their type of work. A company
named BRB Publications provides online lists of many infor-
mation resources at http://www.brbpub.com and
http://www.publicrecordsources.com. They also publish
several books with the same type of information, such as
Public Records Online and Find it Online.
It’s a mistake to sign up for several fee-based information
services at the same time. First, the use of some fee-based
subscription services can get expensive very fast, especially if
employees have access to them. Second, each service has its
own idiosyncrasies and characteristics that must be learned
in order to use it effectively. If you join several at the same
time, it decreases the chance that you’ll be able to use them

effectively. And you’ll probably be paying for services that are
duplicated. As a part of establishing your business, you’ll
need to research which services are the best for your needs
and establish appropriate controls for their use.
Before moving on to the examination, take a few moments to
review and complete Self-Check 5. Then check your answers
with those provided at the end of this study unit. If you’ve
missed any answers, or you feel unsure of the material,
review the relevant pages in this study unit. When you’re sure
that you completely understand the information presented,
complete your examination. Remember also to complete the
Practical Exercises.

Self-Check 5
1. Name a reason for joining only one fee-based information service at a time.
__________________________________________________________
2. Who is allowed to use public libraries?

__________________________________________________________
Questions 3–6: indicate whether each of the following statements is True or False.
____ 3. Other private investigators can be a good source of jobs.
____ 4. Anyone is allowed to go directly to any file in the public record.
____ 5. Only nonpublic records are sold by fee-based subscription services.
____ 6. It’s sometimes best to have a printed directory in the office even if it’s
available online.

PRACTICAL EXERCISES
At the end of most of your Private Investigator study units,
you’ll work through some practical exercises, which will give
you experience performing some of the duties of a private
investigator. The exercises are for your enrichment—don’t
submit your results to the school for grading.
Exercise 1
Gain experience filling out an assignment sheet.
Objectives:
1. To gain practice and experience filling out an
assignment sheet
2. To gain practice and experience asking questions
of a client
A blank assignment sheet is provided in Figure 19.
Completing an Assignment Sheet

You’ll need to get help from a friend, relative, or acquaintance
to be your “client” for this exercise. Assure them they won’t
have to pay you for your services, because you’re just practic-
ing. [Tip: The best way to get cooperation when asking someone
for something is to anticipate whatever objection they might
have and deal with the objection before asking for their
cooperation.]
Ask your client to select a help wanted ad from the classified
section of a local newspaper. They should select any ad they
are or might be curious about in some way. Since they aren’t
going to have to pay anything, you don’t need to do much
qualifying of this client, and you can go straight to filling out
the assignment sheet. Your assignment as an investigator
is going to be to get information about the position they’re
curious about. Fill out the assignment sheet in Figure 19
with all the information for this assignment, starting with
the information about your client.
Once you’ve filled out everything you can on the assignment
sheet, assign the file a case number using any numbering
system you want. That’s all for this exercise. Keep the
assignment sheet.

NE W GUY INV E S T IGA T IONS
317 Main Street, Anytown, OR 89963
(516) 555-9999
File Number
_____________
CLIENT
Last Name ________________________________ First Name ___________________________
Age ______ DOB _________________
Address _______________________________________________________________
________________________________________________________________
Phone Numbers: Home _______________ Business _________________ Cellular/Pager _________________
SSN ____________________
Occupation ___________________________ Employer _____________________________
E-Mail Address________________________
Employer’s Address ____________________________ City _________________ State ______ ZIP_________
Date of First Contact ______________________________ Time ______________
CASE DETAILS
Type of Investigation ________________________________________
Subject / Target Information
Last Name______________________________________ First Name ________________________
Age _______ DOB ____________
Height ________ Weight _________ Race ___________
Distinguishing Marks ________________________________
Address _____________________________________ City _________________ State ______ ZIP_________
Phone Numbers: Home __________________ Business __________________ Cellular/Pager
___________________
SSN _________________________
Employer _______________________________________ Occupation ______________________
Employer’s Address ______________________________ City ________________ State ______ ZIP________
Other Subject
Information_____________________________________________________________________________
_________________________________________________________________________________________
_________________________________________________________________________________________
TIMING AND BUDGET
Date Received from Client ____________________
Assigned To _________________________ Date Assigned ____________________
First Report Due _________________
Completion Deadline _____________________ Budget Agreement _________________________
Description of Assignment and
Notes___________________________________________________________________
_______________________________________________________________________________
FIGURE 19—Assignment Sheet

Exercise 2
Objectives:
1. To gain practice and experience making investigative
phone calls
2. To gain practice and experience interviewing by phone
3. To gain practice and experience writing notes
4. To gain practice and experience reporting verbally
Using the assignment sheet prepared for Exercise 1, attempt
to learn the Who? What? Where? Why? When? and How? of
the position or job opportunity your client is curious about.
Make phone calls as needed, up to five, and attempt to get
the information desired. Keep notes on your calls.
Hint: The easiest way to conduct this investigation is to
become the person who is curious about the position, and
call or write someone in the company who might know any
of the answers you seek, or the person who is listed in the
ad. Telling them you’re curious about the opening is a form
of pretext, but it should also be the truth. Being curious is
part of being a private investigator.
Make a verbal report to your “client” using your notes on
what you learned.

NOTES

Self-Check 1
1. Record keeping or accounting
2. In order of time
Ans wer s
3. By beginning the name with “A,” “AA,” or “AAA”
4. True
5. False
6. True
7. False
Self-Check 2
1. False
2. location
3. False
4. a
Self-Check 3
1. Who? What? When? Where? Why? and How?
2. 03J0110
3. False
4. True
5. False
6. True
Self-Check 4
1. False
2. Weekly
3. A substantial increase above the usual
4. False
75
Self-Check 5
1. To learn to use it effectively and not buy duplicate
services
2. Any member of the public
3. True
4. False
5. False
6. True
76 Self-Check Answers
Exam i nati o n
Investigation Business Basics
EXAMINATION NUMBER:
05803000
Whichever method you use in submitting your exam
answers to the school, you must use the number above.
For the quickest test results, go to
http://www.pennfoster.edu
When you feel confident that you have mastered the material in
this study unit, complete the following examination. Then submit
only your answers to the school for grading, using one of the exami-
nation answer options described in your “Test Materials” envelope.
Send your answers for this examination as soon as you complete it.
Do not wait until another examination is ready.
Questions 1–20: Select the one best answer to each question.
1. When you first have contact with a client, you need to

A. evaluate whether the client is able to pay for your services.
B. explain your philosophy of investigation.
C. get all the details of the case.
D. start assessing charges for your time.
2. Which of the following represents safe storage for photographic

negatives?
A. An open tray on top of a file cabinet
B. A paper sleeve or envelope in a dark, dry container
C. A lighted area with plenty of humidity
D. A plastic box near a source of heat
77
3. Which of the following would be a good name for a new investigation agency?
A. Green Beret Limited C. AAA Countywide Inc.
B. Integrity Co. D. Accurate Investigation Services
4. Which of the following is considered part of your startup expenses?

A. Copying costs for your first case, a deed search
B. Monthly phone bills
C. Office furniture and supplies
D. Accounts receivable
5. Which of the following is an example of the correct way to take case notes?
A. Smith to Atlantic Ave, Bklyn, Tues.
B. Smith to 1307 Atlantic Ave, Bklyn, Tues. 10A.M.
C. Subject Smith took taxi (Emerald car service, lic. ACD-1342) to 1307 Atlantic Ave,
Bklyn, Tues., 5/13/2003, 10 A.M.—rang doorbell third floor, entered
D. The subject, Marilyn Smith, took a green taxi belonging to Emerald car service, livery
license ACD-1342, to a three-story building at 1307 Atlantic Ave, Brooklyn, NY, on
Tues., 5/13/2003, at 10A.M. Then she rang the doorbell of the third floor apartment. The
occupant of the apartment buzzed the door, and she went in.
6. Acme Investigation Agency has one employee in addition to the business owner. Employee
A worked 25 billable hours last week, and was paid a fixed salary of $450. Acme’s over-
head costs (rent, insurance, etc.) are $636 per week. Using this information, what would
you calculate the hourly rate charged to Acme’s clients should be?
A. $14.50 C. $32.50
B. $18 D. $43.44
7. An item of data unique to an individual is called a(n)

A. identifier. C. public record.
B. variable. D. quality.
8. A chronological note file is a file where you keep

A. notes unconnected to any open case, in order of name.
B. notes unconnected to any open case, in order of date.
C. your case notes, in order of client name.
D. your case notes, in order of date.
9. Which of the following statements is false about assignment sheets?

A. They’re for internal bookkeeping only; they’re not an important part of the case file.
B. They’re used to document information you receive from an initial client contact.
C. They’re used to organization client information in the case file.
D. Although they can be automated in a computer, you still need printed copies.
78 Examination
10. Which of the following statements is true?
A. Private investigation is an easy way to earn a lot of money.
B. A license isn’t required in half the states in the United States.
C. Investigators should always know what’s going to be important later when taking notes.
D. All pages of notes should have the date and time at the top of the page.
11. As an investigator, you’ll have to manage your inventory, just like the owner of your local
grocery store. What is an investigator’s inventory?
A. Ideas C. Clients
B. Files D. Bank records
12. One of the sources most often overlooked in investigations is

A. police reports. C. the client.
B. news stories. D. former spouses of the subject.
13. Why would you assign a code to every case type you handle?
A. Because clients want to have the codes when they’re billed
B. So you can analyze your cases statistically to manage your business
C. For purposes of collecting sales tax and paying income taxes
D. So you can use your spreadsheet program to track your files
14. Which of the following statements about the Freedom of Information Act is true?
A. The Act allows citizens to browse the records of the federal government.
B. The Act allows citizens access to all federal, state, and local records.
C. The Act allows citizens to request information held by agencies of the federal
government.
D. Government agencies may refuse to honor a FOIA request without giving a reason.
15. In your private investigator business, the supplies and equipment you need to do your job
A. will be different for every case.
B. will be the same for every case.
C. should be ready before you start working on each new case.
D. can be purchased as you need them during your investigation.
16. How should you go about deciding what to charge your clients?
A. Charge 10 percent more than you earned in your last job.
B. Pick a number that sounds good.
C. Figure out your costs and add an amount for profit.
D. Figure out what you want to earn as a salary, and charge that much.
Examination 79
17. Which of the following statements about interviewing a witness is true?
A. You should ask detailed questions that direct the witness to answer a certain way.
B. You should let the witness answer the question fully before asking any follow-up
questions.
C. You shouldn’t allow witnesses to make any corrections to answers they’ve already
given.
D. It’s not necessary to take notes, as you can always contact the witness later if you
forget something.
18. If a corporate client has neglected to pay your bill after 30 days, what should you do?
A. Wait another 30 days before calling, since many companies pay their bills slowly.
B. Refer the account to your lawyer or a collections bureau for delinquency.
C. Call the client and inquire whether they’ve begun processing the bill yet.
D. Call the client and threaten to take them to court if they don’t pay.
19. The statute of limitations sets the amount

A. of time within which one may file a lawsuit.
B. of time that a private investigator can spend investigating a case.
C. that a private investigator may charge for services.
D. that a plaintiff can be awarded in damages.
20. When taking photographs for a case, it’s important to make a note in your photo log of
A. the time of day when you took the photo.
B. what kind of film you’re using.
C. what focal length and camera settings you used for each shot.
D. the significance of the subject of each photo.
80 Examination

3-Investigation Business Basics

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Study Unit

Mr. Haack is a Detective Sergeant with the Suffolk County, NY police

About the Contributing Reviewer

All terms mentioned in this text that are known to be trademarks

Copyright © 2015 by Penn Foster, Inc.

OLD-FASHIONED BUSINESS BASICS 2

RECEIVING NEW CASES 17

THE BUSINESS OF PRIVATE INVESTIGATION 33

ACCOUNTS RECEIVABLE MANAGEMENT

2 Investigation Business Basics

• Capital (startup money)

• The business plan

• Setting a price or rate for services

A Name for the Business

Investigation Business Basics 3

4 Investigation Business Basics

Investigation Business Basics 5

Typical Business Startup Expenses

The Business Plan

6 Investigation Business Basics

Questions to Ask When Making a Business Plan

FIGURE 2—Important Questions to Consider when Making Your Business Plan

The questions in Figure 2 aren’t all you’ll need if you’re prepar-

Investigation Business Basics 7

FIGURE 3—It’s important to figure out

8 Investigation Business Basics

➣ Approximate number of billable hours: 20

➣ $300/20 billable hours = $15 per hour

• Overhead (rent, electricity, insurance, etc.): $500/week

➣ $500 / 20 billable hours = $25 per hour

• Total cost: $15 + $25 = $40 per hour

• Profit: $5 (this amount needs to be calculated separately,

• Hourly charge to clients = $45

For our purposes here, let’s talk about calculating your

Investigation Business Basics 9

How To Calculate an Hourly Billing Rate

If earning $10.02 per hour for their first three months in

10 Investigation Business Basics

Investigation Business Basics 11

12 Investigation Business Basics

Investigation Business Basics 13

14 Investigation Business Basics

Investigation Business Basics 15

1. What business activity is crucial to the success of a new business?

2. How are chronological items arranged?

____ 5. Overhead means costs that are too high.

____ 6. A business plan doesn’t have to be written out.

Check your answers with those on page 75.

16 Investigation Business Basics

• Getting details from the client

• Organizing the work

• Doing the work

• Documenting and reporting results

If a private investigator specializes in one type of case (such as

Qualifying the Client

Investigation Business Basics 17

FIGURE 6—Always start new case notes

18 Investigation Business Basics

Investigation Business Basics 19

Opening the File

➣ Date of initial contact

• Subject or target information (This would include the

• Timing and budget of the case