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Laws designed to protect privacy often leave no wiggle room for private investigators. Fraudsters can seek shelter under such laws, confident that their DMV and phone records are secure.
From a human resources perspective, the Affordable Care Act is an enormous burden on medium-sized PI firms. Although implementation of certain aspects of the law has been put off another year, it's unlikely to be struck down entirely.
Growth is a reasonable expectation of any small business, but a myriad of economic factors are conspiring to limit growth for PI firms. In 2012, net profits in this sector averaged from 1.8 to 7%; at the lower end of that range, a company is barely treading water. For that same year, the median income of a PI employee was only
$28,000, making recruitment and retention a significant challenge.
Cash Flow Problems
The perennial problem of even highly successful private investigation firms is the slow or non-paying client. Some firm owners go many weeks between paychecks as they struggle just to pay bills. The total dollar value of uncollected or "goodwill" payments filling the books of PI firms is likely astronomical.
Meanwhile, because entering the PI market requires relatively little upfront investment, it's easy for competitors to wade in and crowd the pool. A firm teetering on the brink of failure need only lose one or two clients to fall off entirely.