starting a research company

How to Start a Research and Development Company | 8 Steps with In-Depth Details

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Research and Development (R&D) companies have teams who dig deep to introduce new products and services in the market. The sole purpose of these companies is to make innovations in the market by adding new products and services. Such companies are the backbone of any corporation as without such workers, it’s impossible to bring some new ideas for the clients in the market. So, such a business can be beneficial for the owners. But before starting a research and development company, learn “how to start a research and development company?”

The basic purpose of forming any corporation is profit that is possible only if one brings more beneficial ideas and products for their customers. One can achieve success in this field by creating a team for research tasks. But for initiating such a business, you need proper knowledge and understanding of the market. 

This understanding is possible through deep observation of the market. As in the later section, we’ve worked to formulate a procedure to create a research and development company. So, let’s move down to explore all about this innovative idea. 

Importance of Research and Development Team

The research and development team plays a vital role in the up-gradation of any company or corporation. There are many benefits of such a team. Some major advantages of such a company are discussed here. 

• R&D companies help to introduce new products and ideas that increase the proficiency of any corporation. 
• The R & D team helps to increase the power and knowledge of the company members. 
• It helps to make improvements in the corporation. 
• Such a team helps to increase sales of any corporation. 
• These research companies play a vital role in facing the market competition as these companies give innovative ideas. 
• It helps to increase the growth rate. 
• Such a company imparts a positive impact on the economy of any corporation. 
• These companies increase productivity. 

What are Different Types of Research and Development?

There are three major types of R&D. Here is a brief introduction to these branches of R&D. 

• Basic Research

Basic research includes a thorough understanding of any subject area. It doesn’t have the application of that particular subject in the market. It aims at scientific advancement in that specific subject area and doesn’t include any commercial aim. Such researchers are a very important part of any corporation as they are working persistently to better that particular corporation. 

If a corporation faces any problem, the basic research team is there to help them tackle that problem. First, they do the initial necessary steps and finally find a solution to that problem. Also, they provide the corporation with the new trends of the market. 

• Applied Research

As the name suggests, this type of research has practical application in the market. Such a research team aims to investigate the creation of new products and services. Therefore, they have special goals or aims in the market. 

The applied research team struggles to meet the market and customers’ requirements. They always try to help the corporation in getting benefits from the market trends. 

• Development Research

This branch of research uses the data of previous researches to launch an innovative service or product in the market. Then, they take the help of both the previous researches to formulate something innovative. 

These research teams also work to make the existing products and services better and effective for the customers. In this way, they always work to do something new for the corporation. 

How to Start a Research and Development Company

Here is a brief procedure to start a research and development company. By following this procedure, you can start your research and development company. 

Determine Your Expertise

The foremost thing to start a research and development company knows what your area of interest is. Without understanding your expertise, you can’t research any particular niche. So, be sure of your expertise in the field to use them for professional research. 

Another important thing is your personal experience. Keep in mind that if you don’t have a special interest in a particular task, you can’t succeed. So, try to combine your academic knowledge, experience, and personal interest. When you combine all these things, you can research precisely. 

If you’re not getting clear in your expertise, ask yourself the following questions. 

• Ponder your academic background. 
• Ask yourself about your interest to know your interest. 
• Ask yourself whether you have any interest in business research or not.
• Clear your mind about the clients of your interest. 
• Ask yourself about your previous research task, if any. 

When you go through these questions, there are more chances of clarity. 

Cost and initial investment

Research and development of a new product are necessary for bringing a new product to the marketplace. By creating a new product, companies can offer something that wasn’t available before. It also allows them to set themselves apart from their competitors by offering innovative or creative solutions to existing problems or unmet needs.

However, developing products that deliver real results does not come without risks for the business owner who invests money upfront in research and development and time spent perfecting the final version of the product. This is why business owners need to plan out each step of their design process to work within their means financially while still producing quality results.

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The cost of doing research and development varies by many factors, including what type of industry the company works in, the product they’re developing, and how similar it is to products already on the market.

Research and development (R&D) is traditionally divided into basic research, applied research, and developmental research:

Basic research is performed to increase scientific knowledge and may be aimed at answering questions or solving problems raised by physics, chemistry, biology, and other sciences. However, basic researchers often stay far removed from any immediate practical applications because their work is intended to produce fundamental knowledge and basic understanding, leading to new technologies that other businesses or organizations can exploit. 

Applied research is performed to achieve specific practical results, like a new product or a better process for an existing product. Thus, applied research is more targeted than basic research and focused on immediate commercial goals with very short timelines. 

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Follow the rules and Regulations .

Consult your attorney before you start.

The company should have at least one director who is a US citizen or resident.

Each director must sign the articles of incorporation in person, except the articles may be signed by an attorney, in fact, under a duly authorized power of attorney.

You should set up accounting records for each company which will consist of the general ledger, chart of accounts and subsidiary ledgers.

There are two types of books that need to be kept: 

• Financial statements; 
• Other supporting records such as purchase orders, invoices, employee timesheets etc. 

The business owners must maintain these financial statements and supporting records for 7 years after the year they were prepared unless otherwise requested by the client, the IRS or other applicable authority.

A board of directors should be appointed to delegate’s duties and responsibilities. Accordingly, certain tasks, functions and powers are reserved for the board of directors, while others are delegated to managers or officers.

The trade name should expressly not include the words “corporation,” “incorporated,” or any abbreviation thereof unless it also contains either the word “Company” or an appropriate abbreviation thereof immediately after that.

There is little benefit in registering a trademark since state law provides that trademark protection arises automatically when a service mark or trademark is used in business transactions under Lanham Act. 

As a result, the Lanham Act governs most patent law in the United States. If a firm uses a title or emblem in trading, it instantly acquires “statute law” trademark protection, which are actionable in state courts.

All companies must file annual income tax returns on Form ITR-6 within three months after the end of every year.

Companies cannot be formed for illegal purposes and must operate by their stated purpose.

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Here are the required documents and fees

• Articles; Memorandum; Minutes; Board of Directors (minimum 5); 
• Operating Agreement/ Bylaws (if applicable); 
• Organizational Structure (if applicable); 
• Filing Fee: $100; 
• State Fee: $150, payable to the Secretary of State; 
• Registered Agent Fee: varies by company type, 
• Corporations pay $300 annually; 
• Trade Name Registration (for companies only): $500-$1000 depending on size and location.

Set the Goal about Clients

When you’re clear about your interest, the next step is to set the target clients. First, be certain about the clients of your company. Here are some types of clients, decide which category will suit your company. 

• External companies
• Business to business researchers
• Advertisers
• Special researchers
• Research for government offices
• Research for politicians
• Now, research for any commercial company to get data on a particular niche
• Research for financial institutions

Advertise Your Research Services

When you decide on your potential clients, the next step is to advertise your services in that client circle. There are different ways to do this task. Here are some ways to do so. 

• By making your social media presence sure.
• By developing websites for your business. 
• Do necessary SEO for your website to improve its ranking on the search. 
• Manage the following
• Google ads. 
• physical advertisements in the form of pamphlets.
• Manage seminars.
• Manage referrals through the existing clients. 

Set Your Charges

Set your charges for different services. You can divide your charge sheet in the following manner.

• service fee
• project fee

Improve Your Service

Over time, you would be able to get a handsome number of potential clients. When you have met your clients’ goals, start working on the improvements in your service. You can do this in the following ways.

• Pay special attention to the tasks. 
• Manage your time accordingly and meet your deadlines.
• Try to divide your team into different categories that will improve the performance. 
• Finally, make sure that your company has a friendly collaboration. 

Make Your Service Attractive

Once you have set your business, how far it sustains in the market is up to you. It depends on your capabilities. One of the best ways to make your service better is by improving the way of result presentation. You can do this by following these tips. 

• Present your results in the form of authentic charts, graphs, or tables. 
• Make a short video clip, if necessary. 
• There are possibilities of a live presentation of the results. 
• Also, you can present your results in the form of slides. 
• Finally, you can manage writing an article on the result of your research. 

Frequently Asked Questions

What are the three major types of research and development.

These are the major types of research and development. 

What is an example of product development?

There are many examples of product development in daily routine life. For example packaging of wheat, bags are an example of product development. Packaging of cooking oil pouches is also an example of product development. 

How does an R&D department work?

The research and development department plays an important role in the upbringing of any corporation. There are different roles of this department in any business. Some benefits of this department are as under. 

• This department helps to create new products and services. 
• This department helps to improve the existing products and services. 
• Helps to attract a maximum number of potential clients. 
• Plays a vital role in creating the values of any company. 
• Helps to compete with market trends. 

How much does it cost for R&D?

It depends on the company corporation how much it spends on the R&D. Usually; a normal corporation spends 3.5% of its total revenue on the R&D. However, this expense may increase up to 7% of the total revenue. 

Is R&D a good career?

Yes, running an R&D company is an economical business as it plays a vital role in the up-gradation of any corporation. Nowadays, companies are spending a handsome amount on R&D. So, starting such a business is economical. 

How do you manage the R & D department?

There are different ways to make the R&D department better for better services. Here are some solutions. 

• Be active and read the industry presses regularly. 
• Investigate new ways to solve a problem. 
• Talk with maximum people on the industry problems. 
• Keep figuring out the importance of the R & D department. 
• Work collaboratively. 
• Don’t hesitate to get help when needed. 
• Be regular and meet the deadlines. 
• Arrange free or paid seminars. 

Research and Development Company plays a vital role in the upbringing of different corporations. It’s an R & D company that builds the worth of any corporation in the market by introducing new products and services or by improving the existing products and services. So, starting a research and development company can prove beneficial if someone properly understands it. You can also start such a business by following the procedure mentioned above.

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How to Start a Profitable Research And Development Business [11 Steps]

By Nick Cotter Updated Feb 02, 2024

Business Steps:

1. perform market analysis., 2. draft a research and development business plan., 3. develop a research and development brand., 4. formalize your business registration., 5. acquire necessary licenses and permits for research and development., 6. open a business bank account and secure funding as needed., 7. set pricing for research and development services., 8. acquire research and development equipment and supplies., 9. obtain business insurance for research and development, if required., 10. begin marketing your research and development services., 11. expand your research and development business..

Launching a research and development business begins with a thorough understanding of the market landscape. A comprehensive market analysis will help you identify your potential customers, competitors, and overall industry trends. Here are key points to consider when performing your market analysis:

• Define your target market: Understand who your potential customers are, what needs they have, and how your R&D business can meet those needs.
• Analyze competition: Research existing companies in your niche, their product offerings, market share, strengths, and weaknesses.
• Assess market trends: Look into current and future trends that may affect your industry, including technological advancements, regulatory changes, and funding availability.
• Identify market gaps: Spot opportunities for innovation by finding areas where customer needs are not being met by current products or services.
• Understand regulatory environment: Investigate the legal and compliance requirements relevant to your industry and how they might impact your business operations.
• Collect and analyze data: Use surveys, interviews, and secondary research reports to gather quantitative and qualitative data that will inform your business strategy.

Are Research And Development businesses profitable?

Yes, research and development businesses can be profitable. Depending on the type of research and products developed, these businesses can generate revenue from sales, licensing fees, and other forms of income. Additionally, research and development businesses can benefit from government grants and tax incentives.

Creating a research and development business plan is a pivotal step in transforming innovative ideas into marketable products or services. This plan serves as a roadmap for your R&D activities, ensuring they are aligned with your business goals and objectives. Consider the following key points when drafting your plan:

• Define your business vision, mission, and objectives to guide all R&D efforts.
• Identify the target market or sector for your R&D outcomes and analyze market needs and trends.
• Detail the specific technologies, products, or processes that will be the focus of your R&D.
• Establish a clear timeline for research phases, development milestones, and market entry.
• Outline the team expertise and resources required, including any partnerships or collaborations.
• Prepare a budget that encompasses staffing, equipment, materials, and other R&D expenses.
• Address intellectual property management, ensuring protection of innovations and compliance with regulations.
• Develop risk management strategies to mitigate potential challenges and obstacles.
• Include a financial plan with projections on R&D investment returns and funding strategies.

How does a Research And Development business make money?

Research and Development businesses make money by providing unique services to their target audiences. For example, a Research and Development business that focuses on antique business images might target antique business owners, antique collectors, or other professionals with an interest in antique business images. This business might offer services such as custom antique business image design, restoration, or digitization. These services would be provided to the target audience in exchange for a fee, generating revenue for the Research and Development business.

Developing a strong research and development (R&D) brand is a critical step in establishing your business within the competitive landscape. It reflects your company's vision, expertise, and the innovative value you offer. Here's how you can create a compelling R&D brand:

• Define Your Vision: Articulate a clear and forward-thinking vision statement that aligns with your R&D goals and resonates with your target audience.
• Identify Your Unique Selling Proposition (USP): Determine what sets your R&D business apart from competitors and emphasize that uniqueness in your branding.
• Create a Memorable Name and Logo: Choose a brand name and design a logo that is distinctive, relevant, and reflects the essence of your R&D work.
• Establish Brand Values: Select core values that represent your brand's ethics and approach to research, which will help build trust and credibility.
• Consistent Messaging: Ensure all communications, from marketing materials to research publications, consistently convey your brand's voice and message.
• Engage with Your Community: Actively participate in industry events, forums, and social media to increase visibility and establish your brand as a thought leader.
• Protect Intellectual Property: Safeguard your brand by registering trademarks and patents to prevent imitation and reinforce your market position.

How to come up with a name for your Research And Development business?

When coming up with a name for your Research And Development business, it is important to keep in mind what the company does and what it stands for. Brainstorming is a great way to come up with creative ideas. Additionally, doing some research on existing Research And Development businesses can be helpful to get inspiration. Lastly, try to make a name that is memorable, creative, and reflects the mission of your business.

Formalizing your business registration is a pivotal step in legitimizing your research and development business. This process varies by location, but certain universal steps must be taken to ensure your business operates within the legal framework. Follow these guidelines to register your business properly:

• Choose a business structure (e.g., sole proprietorship, partnership, LLC, corporation) that aligns with your needs for liability protection, taxation, and business scale.
• Register your business name with the appropriate government body, ensuring it's unique and meets all naming requirements for your jurisdiction.
• Obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS) if you're in the US, or the equivalent in your country, which is necessary for tax purposes.
• Register for state and local taxes, as required, to ensure you're set up to pay sales, use, income, and employment taxes as necessary.
• Acquire all necessary permits and licenses specific to the research and development industry, which may include local, state, or federal approvals depending on the nature of your work.
• File for intellectual property protection if your business involves unique inventions, proprietary technology, or trade secrets.

Resources to help get you started:

Explore key resources designed for research and development entrepreneurs, providing access to the latest market trends, operational best practices, and strategies for business expansion:

• Harvard Business Review: Offers articles and case studies on innovation and R&D management strategies. Visit site .
• MIT Sloan Management Review: Provides insights on leading through innovation and the effective use of R&D resources. Visit site .
• R&D World: Features news, trends, and analysis for R&D leaders, including annual reports on global R&D funding forecasts. Visit site .
• Springer Nature’s Journal of Research-Technology Management: Scholarly articles focused on the intersection of research, technology, and management practices. Visit site .
• CB Insights Research: Publishes tech market intelligence reports that cover various sectors, including predictive insights on emerging tech sectors relevant for R&D. Visit site .

Starting a research and development business may require specific permits, especially if your R&D involves hazardous materials, biomedical research, or other regulated areas. Ensure compliance with all relevant regulations. Key requirements include:

• Business License: Secure a general business license from your local municipality.
• Specialized Permits: Depending on your field, you may need permits from environmental, health, or industry-specific regulatory agencies.

Securing your business's financial foundation is a crucial step in the establishment of your research and development company. Opening a business bank account is essential for managing your finances and transactions professionally. If your project requires additional capital, exploring funding options becomes equally important. Here's how to proceed:

• Research banks that offer business accounts with benefits suitable to your R&D business needs, such as low fees, high transaction limits, and robust online banking services.
• Prepare the necessary documentation, which typically includes your business formation papers, EIN (Employer Identification Number), and personal identification.
• Compare the terms and conditions of different banks, including any business loans or lines of credit they may offer.
• For funding, consider government grants specifically for R&D, venture capital from investors interested in innovation, or business loans if you have a solid business plan with financial projections.
• Network with other entrepreneurs and attend industry events to discover potential angel investors or partners willing to contribute funding.
• Explore crowdfunding platforms if your R&D project has a strong appeal to the general public or offers innovative consumer products.

Setting the right pricing for research and development services is crucial to ensure your business is competitive and profitable. It involves considering various factors like cost, market demand, perceived value, and the nature of the innovation. Here's a guide to help you establish a pricing strategy:

• Cost-Plus Pricing: Calculate the total costs of providing your service, including direct and indirect expenses, and add a markup percentage for profit.
• Value-Based Pricing: Determine the price based on the perceived or estimated value your service will bring to the customer, rather than just the cost of the service itself.
• Competitive Analysis: Research what competitors are charging for similar services and position your pricing in a way that reflects your unique value proposition.
• Flexible Pricing Models: Offer different pricing structures, such as hourly rates, project-based fees, or retainer models, to cater to various client needs and project scopes.
• Dynamic Pricing: Adjust prices based on demand, with the flexibility to offer discounts or premium charges depending on the market conditions and client relationships.
• Transparency: Clearly communicate what is included in the price and any potential additional costs to foster trust and avoid misunderstandings with clients.

What does it cost to start a Research And Development business?

Initiating a research and development business can involve substantial financial commitment, the scale of which is significantly influenced by factors such as geographical location, market dynamics, and operational expenses, among others. Nonetheless, our extensive research and hands-on experience have revealed an estimated starting cost of approximately $1169000 for launching such a research and developmentbusiness. Please note, not all of these costs may be necessary to start up your research and development business.

Starting a research and development business involves meticulous planning, particularly when it comes to acquiring the right equipment and supplies. These are essential tools that will enable your team to innovate, experiment, and develop new products or technologies. Below, you'll find a step-by-step guide to help you make informed decisions about the equipment and supplies you need.

• Assess Your Needs: Begin with a thorough assessment of the specific equipment and supplies your research and development activities will require. Consider the nature of your projects and the scale of your operations.
• Source Suppliers: Research and identify reputable suppliers who specialize in high-quality research and development equipment. Look for vendors that offer competitive pricing, good customer service, and reliable support.
• Compare Prices and Quality: Obtain quotes from multiple suppliers to compare prices. However, ensure you also consider the quality and longevity of the equipment.
• Consider Second-Hand Equipment: For cost savings, consider purchasing certified pre-owned or gently used equipment from trusted sources.
• Plan for Future Needs: Invest in scalable equipment that can grow with your business, avoiding the need for frequent upgrades.
• Secure Financing: Explore financing options if the upfront cost of equipment is prohibitive, such as leasing or payment plans.
• Review Warranties and Service Agreements: Ensure that the equipment comes with a solid warranty and check if the supplier provides service agreements for maintenance and repairs.
• Purchase Consumables in Bulk: Save on recurring costs by buying consumable supplies in bulk, but be wary of shelf life and storage requirements.
• Stay Updated on New Technologies: Keep abreast of the latest advancements in equipment and tools that could benefit your R&D processes and consider investing in them.

List of Software, Tools and Supplies Needed to Start a Research And Development Business:

• Software development tools
• Internet access
• Research materials and resources
• Office supplies and stationery
• Laboratory equipment
• Analytical tools
• Laboratory supplies
• Prototyping materials
• Marketing materials

Protecting your research and development business with appropriate insurance is a critical step in safeguarding your assets, intellectual property, and the overall health of your enterprise. It's crucial to assess the risks specific to your field and acquire insurance that addresses those potential vulnerabilities. Below are key considerations to guide you in obtaining the right business insurance:

• Evaluate Risks: Consider the types of risks your business might face, such as property damage, liability issues, or data breaches. This will help determine the necessary coverage.
• Consult with Professionals: Speak with an insurance broker who specializes in business insurance. They can provide tailored advice and help you understand the specific policies that suit your R&D business.
• Consider Intellectual Property Insurance: Given the nature of R&D, protecting your intellectual property (IP) is crucial. IP insurance can help cover legal costs in case of infringement disputes.
• General Liability Insurance: This is a foundational insurance that covers bodily injury, property damage, and advertising injury claims against your business.
• Product Liability Insurance: If your R&D involves creating prototypes or products, this insurance can protect against claims related to product defects.
• Review Regularly: As your business evolves, so will your insurance needs. Make it a practice to review and adjust your insurance policies annually or when significant changes occur.

Successfully launching your research and development services requires a strategic marketing approach. By effectively promoting your unique capabilities and expertise, you can attract clients who are seeking innovative solutions to complex problems. Here are several steps to consider when beginning to market your R&D services:

• Identify Your Target Market: Clearly define who will benefit most from your services, whether it's startups, large corporations, or specific industries.
• Develop a Strong Brand: Create a memorable brand identity, including a professional logo and a compelling tagline that conveys the essence of your R&D services.
• Build a Professional Website: Launch an informative website that showcases your expertise, services, and past projects to establish credibility.
• Utilize Content Marketing: Share your knowledge through blogs, white papers, and case studies to demonstrate thought leadership in your field.
• Network and Collaborate: Attend industry conferences and networking events to build relationships and collaborate with potential clients and partners.
• Leverage Social Media: Use platforms like LinkedIn and Twitter to connect with your audience and share insights and updates about your R&D work.
• Consider Paid Advertising: Invest in targeted ads on search engines and social media to reach potential clients actively searching for R&D services.

Once your research and development business is established, expanding your operations can help in tapping into new markets and opportunities. A thoughtful approach to scaling up will ensure sustainability and innovation continue to thrive. Here are key strategies to consider:

• Explore partnerships with universities and industry leaders to gain access to a wider range of expertise and cutting-edge technology.
• Diversify your R&D portfolio by investing in new areas that align with emerging trends and customer demands.
• Apply for additional funding through grants, venture capital or partnerships to finance your expansion efforts.
• Enhance your facilities and equipment to support increased capacity and more sophisticated research projects.
• Attract top talent by offering competitive salaries, professional development opportunities, and a collaborative work environment.
• Invest in intellectual property protection to safeguard your innovations and establish a competitive edge in the market.
• Use data analytics to assess market needs and direct your R&D efforts more effectively.
• Expand your geographical reach through global collaborations or setting up satellite research labs in strategic locations.

How to spin your scientific research out of a university and into a startup

by Jared Friedman 10/28/2020

This is advice for people who have done scientific research at a university and are considering starting a company to commercialize it.

At YC, we’ve funded more than 75 companies in this situation. We also recently went on a Bio Tour where we went around to research universities and talked with hundreds of students and professors in the life sciences about commercializing their research. These are the most common topics founders have asked us about.

Deciding who should spin out

In a typical spin-out situation, there are several people who worked on the research, including a mix of students, post docs and faculty. The first thing you need to decide is who is going to work on the company and who is going to stay at the university.

A lot of scientific founders have misconceptions about how to structure their founding team. Here are the most common ones.

Misconception 1. You can start a company while continuing your academic career

Here is a blunt fact that often makes founders uncomfortable: your company has little chance of success unless someone who worked on the original research is willing to leave their university role to start this company.

If you are a student graduating soon, you can just wait until you graduate; that’s a perfect time to start a company. But otherwise, at some point you will have to make an intentional decision to leave so you can run the company.

Misconception 2. You should find a CEO to run the company

Too many scientists believe that they should remain in academia and find a CEO to start a company around their invention. This is almost always a bad idea. For one, it’s hard to find a great CEO to run a company at this early stage. Truly great CEOs are scarce, and they usually have much better opportunities available to them than running an idea-stage startup with no funding. As a result, most scientists that try this approach either never find a CEO or end up settling for a mediocre one. It’s even worse if your university tries to find a CEO for you.

But even if you could draft any person in the world to run your company, it still probably wouldn’t be a good idea. The best CEO for this stage is one of the people who did the original research. The people who did the original research will be far more invested in the success of the venture than any outsider. They are also far more qualified to build a company around it because their domain knowledge of the field is much more valuable than whatever general business skills an outside CEO would bring.

A related misconception is believing that the research is done and that all that’s left is to commercialize it. If this were true, perhaps an outside CEO would make sense. However, it rarely works out that way. Usually you find that the thing the market wants is not quite the thing that you’ve invented, and that more research needs to be done. The original inventors can take this feedback and make adjustments; an outside CEO will just be stuck.

Misconception 3. You need someone with business experience on the founding team

Many scientists think that to start a company you need someone with prior business and financial experience. This is just not the case. In the first couple of years, there is typically very little “business” to be done, and whatever business skills you need you will pick up along the way. Most of the scientists we fund at Y Combinator have no prior experience in business.

People who work in business like to make it sound hard, as if business were like quantum physics, a field that needed to be studied for years to master. The fact is, it’s not even close.

Misconception 4: You should raise money first, then leave the university

Often, people are unsure of whether they want to risk leaving a stable academic role to pursue a startup. So they take their idea and pitch it to some local VC firms. They figure if it’s a good idea, the VC firms will fund them, validating the idea and giving them a smooth transition out of their university job and into a well-funded company.

While VC firms will occasionally fund spin-outs this way, usually they don’t. Unfortunately, too many founders get turned down by VCs and conclude that their idea must be bad and give up. Actually, the issue is that it’s just too early at this point to raise money from VCs.

Typically, founders will need to work full-time on their company for 1+ years before it is ready to raise a multi-million dollar round from VCs. In the meantime, they sustain themselves by self-funding from their savings, getting government research grants, raising a small amount from friends and family, or raising a small “pre-seed” round from angel investors, accelerators, or seed funds.

Founders who won’t quit their job before they raise money often get stuck in a catch-22. They are waiting for an investor to take a bet on them before they quit their job. But the investors are waiting for the founders to believe enough in their own company to quit their job!

What I recommend

The ideal situation is that two or more people from the lab who did the work leave together to start the company as cofounders. One full-time founder is also ok. One of the people who leave to start the company should be the CEO.

In many cases, other people who were involved in the research want to remain behind at the university but still contribute in some way. That’s fine. Those are often called “academic cofounders” or “scientific cofounders” and they can still be very helpful. But the founders who are going to be full-time are the most important.

Deciding when to spin out

In the early stages of developing a new technology, you’ll make faster progress still at the university, taking advantage of university resources. It’s the ideal place to do the initial experiments to prove that your idea could work. You can even do some testing of market demand for a new product, through programs like NSF I-Corps or just by calling up potential customers/stakeholders. At some point, though, that will flip, and being at a university will start to slow you down, because universities are not set up to commercialize technologies.

It’s possible to leave too early and possible to wait too long before leaving. Unquestionably, though, the far more common mistake is to wait too long.

Most founders wait too long because leaving is scary. Academia is a comforting environment. No one is pressuring you to leave and leaving seems risky so the natural thing to do is to keep delaying it. There’s a temptation to make the technology perfect before spinning out, and there’s always “one more experiment” you could do. If you don’t stop this cycle, you’ll never leave.

Often after people do leave, they realize that a lot of the work they did in the last year was wasted, because some of their assumptions about what the market wanted were wrong. They also realize that they are now moving so much faster as a company that they could have saved months of time by spinning out a year earlier.

Splitting up Equity

After you’ve decided who is going to be full-time on the startup and what everyone’s role will be, you’ll want to split up equity.

As important as this decision is, founders often don’t have a good framework for making it. Here is the framework I recommend. It has just two rules 1 .

1) Founders who will be working on the company full-time should get equal or nearly equal amounts of equity.

2) Founders who will be leaving their job to work on the company full-time should get much more equity than founders who are going to remain in academia. Academic cofounders should own no more than 10%. 2 .

My colleague Michael Seibel previously wrote a great essay about why rule #1 is so important. Rule #2 is important because it is the full-time founders who will invest many years of their life exclusively in making the company successful, and they need to have enough ownership that it makes sense for them to do that.

The biggest conceptual mistake I see scientific founding teams make here is that they think the purpose of allocating equity is to reward past contributions, when actually it’s mainly to anticipate future ones.

Here’s a blunt fact about starting a company. If you are going to make a new company successful, you will probably have to work on it for 7-10 years post spin-out. That’s a long time!

If you are just spinning out of a university now, you might feel like you’re halfway done, but actually you are on mile 2 of a 26 mile marathon. The academic founders may have been instrumental in the first mile, but it is the full-time founders who will be primarily taking you the other 25. The equity split between founders has to reflect the expected contributions over the whole marathon.

One consequence of this is that your equity split in the new company will not necessarily have any relation to your seniority within the original academic team. It’s often the case that the people leaving are more junior, while the senior people / faculty remain. In that case, the founders who leave will end up with much more equity than their former boss. This can be an awkward conversation, but it’s entirely sensible.

Negotiating with tech transfer offices

If you are going to commercialize research started at a university, you will probably need to negotiate the rights to the intellectual property. The group at a university that does that is the technology transfer office. 3

In the past, tech transfer offices had a well-deserved bad reputation. They were known for being slow and bureaucratic, and for forcing onerous terms onto fragile young startups. Many times the terms they insisted on strangled the very companies they were trying to create. There was so little transparency in the industry, it was hard for founders to know what terms were fair.

Fortunately, things have gotten better. There is now much more information available for founders. Tech transfer groups at the universities in major startup hubs like Harvard, MIT and Stanford now give startups reasonable terms (though they still take too long to do it). At universities that have not seen many successful spin-outs, it’s hit-or-miss. A few universities are now using “ express license agreements ”, preset agreements that require little to no negotiation; hopefully this will become more common.

There are typically four key terms 4 in these agreements.

1) Equity. Typically the university will get equity in the company. This is ok as long as it is not too much. 3-5% is typical. Above 10% will cause problems. 5 , 6

2) Royalty. This means that you pay a percentage of revenue or profits to the university. If this is too high, it can affect the viability of the company to raise money and operate. Ideally you would make this zero. If you can’t do that, try to keep it < 5%, and to have it terminate after a certain number of years and/or a certain level of payments.

3) Milestone payments. I.e., “You owe us $250K when the company raises its first $10M”, or “You owe us $500K when you reach Phase II clinical trials”. Because cash is scarce in the early days of a startup, you want to keep these as low as possible. You should never need to spend more than a few percent of the money you raise.

4) Exclusivity. If a license is not exclusive, the university could theoretically turn around and license the same IP to a big company to go compete with you. This sounds like a real problem, but often it’s not. For many inventions, in practice other companies won’t know how to use the IP and won’t value it until you’ve done years of work further developing it (at which point the university-owned IP isn’t sufficient). 7 It may be optimal to have a non-exclusive license initially with an option to make it exclusive later, or a right of first refusal clause. Here is some advice for negotiating these agreements.

You should get in touch with founders of other companies that have recently negotiated agreements with the same office. Find out what terms they got and ask for advice on negotiating strategy. You can also ask investors, lawyers, and advisors. You should get as many data points as possible.

If you’re a student or post doc, it’s valuable to have the buy-in of the professor running your lab. Professors have sway at universities and will give you leverage over a stubborn tech transfer office. You also want to make sure that they don’t have any competing plans to do their own spin-out with the technology. Often by getting them onboard as an advisor early, they will be helpful in securing a good deal, and they’ll also give you credibility with investors.

If the agreement feels too onerous, ask yourself if you need it at all. It might be cheaper to recreate something similar on the company’s time. 8

More dramatically, you might end up not even using what you’re planning to license, because startups pivot all the time. I’ve worked with many companies that fought tooth and nail over their tech transfer agreement, only to find that a year later they’d totally changed their approach and abandoned the IP they fought so hard to license! One way to protect against this is to ensure that any royalties are directly tied to the use of the technology.

Consider taking an option to license the IP in the future, rather than negotiating a full license agreement now. An option is often much cheaper and simpler to get, and allows you to defer the final negotiation for six to twelve months. That also gives you time to see how much you are using the original IP before committing to licensing it.

Beware of well-meaning but bad advice from university entrepreneurship offices. Some entrepreneurship offices at universities are great, but unfortunately some are not. Worse, some have their own agendas, like helping local investors. Consider whether the people you’re talking to have a track record of many truly successful companies when listening to their advice.

Start the conversation with this office as early as possible. This will give you more time to work out an agreement and also let you find out the lay of the land.

Don’t wait for the agreement to start the company. Getting an agreement can take 6 months or longer. Many investors (including YC) will fund companies before they have an agreement in place. The more progress you make on the company, the more leverage you have in the negotiation.

After the spinout

You’ll need to incorporate your company. If you are based in the US (and possibly even if you aren’t), you’ll want to incorporate as a Delaware C Corporation, no matter which state you are physically in. 9

It may well make sense to continue collaborating with your lab. They may produce new work which you want to license.

In some cases, you may want to continue doing experimental work using university labs. University core facilities are commonly available to companies, albeit for higher fees. It’s possible to save a lot of money using university resources instead of buying equivalents commercially. That’s fine, as long as it isn’t slowing you down significantly and doesn’t create IP issues. Unfortunately there is often a tradeoff between speed and cost.

A big adjustment for founders from academia is internalizing a different incentive structure. In academia, you’re rewarded for new discoveries and for publications. In startups, there is zero reward for new discoveries and hardly any for publications. In startups, the only thing that you are rewarded for is making tangible progress towards a commercially valuable product.

A side effect is that in startups, there is no intrinsic reward for doing something new or difficult. Any time there is a shortcut where you can copy or buy something that already exists, you should take it. In startups, you want the “new part” of what you are doing to be as small as possible, and everything else to be as boring and low risk as possible.

Another big adjustment is the pace. In startups, you are racing against the clock. If you don’t hit milestones before your current funding runs out, your company will run out of money and die. That kind of hard constraint forces focus like nothing else. As a result, founders who leave academia to do YC often tell us they got more done in the three month YC batch than the prior year.

If that’s made startups sound stressful, they are, if only because so much is at stake. When you’re starting your own company, the highs are higher and the lows are lower than any regular job. If you want to learn more about what it feels like, there’s a great essay called “ What Startups Are Really Like ”.

There has never been a better time to start a biotech or hard-tech company. There is far more funding available now than ever before, and a well developed ecosystem to support founders at every stage. Today most grad students and postdocs choose between staying in academia and getting a job in industry. We think there will increasingly be a third option: to start their own company.

Thanks I couldn’t have written this without the help of many YC founders who did spin-outs themselves. Special thanks to Uri Lopatin, Birgitt Boschitsch, Aaron Lazarus, Alexis Rovner, Juan Medina, Glenn Markov, John Ramunas, Wesley Wiersen, Lindsay Amos, Ravi Pamnani, and Andrew Jajack for reading drafts of this.

1. Separately, it’s also very important for all founders to have a vesting schedule for their shares. It should vest over at least four years. ↩ 2. When academic founders own too much of the company, they will find themselves unable to raise money from VCs. VCs call this "dead equity" or "dead weight on the cap table" - the phrase pretty much tells you how they think about it. ↩ 3. The names vary a little – sometimes it’s called the “office of technology licensing”, or the “innovation office”, but I’ll use this term. ↩ 4. Here are some less critical but still common terms and quick advice for them: (5) patent prosecution – you should have control of the patent filing and patent strategy, (6) sublicensing – likely important for you to be able to sublicense, (7) funding requirements – try to avoid, (8) upfront and annual fees – ok if relatively small, (9) rights to future IP coming out of the same lab – may or may not be worth it, (10) pro rata rights so the university can invest to maintain their ownership – acceptable if the university can decide quickly and if it only applies to priced rounds, not convertible securities. ↩ 5. Sometimes the terms call for a “percentage of proceeds from any liquidity event” instead. This is worse than equity because it can’t be diluted. So if your university insists on this because they can’t accept equity, it should be a very small percentage, about ⅓ of the equivalent equity percentage. ↩ 6. Another wrinkle is anti-dilution clauses where these equity percentages don’t dilute until you’ve raised $xM. ↩ 7. Related to this, some universities require a “marketing period” where they shop the invention around to other potential buyers but usually this is a formality because they rarely get interest. ↩ 8. Also, if you have a reasonable path to recreating it, that can give you leverage over a tech transfer office. If they know you are busily working on recreating it, the value of the license deal goes down every day. ↩ 9. Two easy options for doing this are http://clerky.com/ and https://stripe.com/atlas. ↩

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Jared Friedman

Jared is Managing Director, Software and Group Partner at YC. He was cofounder of Scribd, which was funded by Y Combinator in 2006 and grew to be one of the top 100 sites on the web.

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How to Start a Research Organization (from your Bedroom) | VitaDAO

In this article, we’ll look at how to start a laboratory-based research organization like VitaDAO.

So far in this series, we’ve looked at How to Start a Hedge Fund , and How to Start a Charity . Software projects like these benefit from relatively low costs of execution and a high degree of reproducibility, making hypotheses quick to test and iterate. In this article, we’ll look at a case where this situation is reversed: that of a laboratory-based research organization — VitaDAO .

Problem: It’s the Incentives, Stupid

In 2018, an internal Goldman Sachs research report asked, “Is curing patients a sustainable business model?” This inflammatory, albeit rational, question was prompted by a decline in the sales of Sovaldi and Harvoni, two highly effective drugs for Hepatitis C that worked so well that their customer base shrank dramatically; i.e. patients were cured.

This example of misaligned incentives between investors, researchers, and patients, is the first in a long list within the pharmaceutical and medical industries:

• Large pharmaceutical companies have little incentive to eradicate diseases.
• Companies will leave patents undeveloped so a potentially superior drug doesn’t cannibalize strong sales of an existing inferior drug.
• Companies may throttle the production of drugs to keep their prices high.
• There’s no incentive to publish negative or inconclusive results.
• Individual scientists usually won’t own the intellectual property they help to create.
• Testing and development facilities are difficult to access for individuals or small teams.
• Funding applications are generally too laborious for individuals or small teams.
• Government grants favor uncontroversial methods and areas of research.

This list makes pharmaceutical companies sound like monsters, but from their perspective, only 1% of compound discoveries turn into viable drugs, which translates into 10-15 years to bring a drug to market at an average cost of $2.5bn and an average ROI of 3.2% — hardly excessive.

Such high risks and low margins have, historically, driven companies to consolidate and vertically integrate funding, research, development, and distribution. In recent years, that flight to safety has accelerated such that in-house development has been replaced by ‘out-licensing’ agreements where the rights to a patent or potential drug are sold to a third party to carry out the riskier tasks of development and production. Venture funds have followed this trend, which means that while it is still relatively easy for early-stage ventures and startups to obtain funding for research, it is much more difficult to fund development. This translational gap between academic research and industrial commercialization has become known as the ‘Valley of Death’.

The upshot of all this is that in a world where the cost of computing roughly halves every two years (Moore’s Law), the cost of drug development doubles every nine years — a situation that has ironically been called ‘Eroom’s Law’ (’Moore’ in reverse).

Solution: Fix the Incentives, Fix the World

Paul Kohlhaas began his career as an economist and became particularly fascinated by these perverse economics within the pharmaceutical industry. Having discovered Bitcoin in 2013, he asked the question, “How can crypto solve this?”. Five years later, Paul was introduced to Tyler Golato — an academic who had been speaking to a mutual friend about how to reduce systemic bottlenecks in drug development. Paul had been thinking about the same issues but approaching them from the perspective of intellectual property ownership and examining how decentralization and NFTs could help create new ownership structures. They began talking for a few months and both found this problem challenging and exhilarating. In late 2018, they officially joined forces to form Molecule as a biotech protocol for turning early-stage intellectual property into liquid assets that are owned by communities of token holders rather than closed monopolies.

Molecule’s core innovation uses a clever combination of legal trusts, NFTs, and bonding curves, which works like this:

• Assign patent ownership to a Patent Investment Trust.
• Attach the patent data (e.g. the Markush structure ) to an NFT, turning it into an ‘IP-NFT’.
• Legally contract that the Trust’s assets are managed by a software protocol.
• Assign the IP-NFT to a token bonding curve contract on the open market where the token price is determined by the extant supply.

This model means that the inventor can be issued a ‘creator stake’ of tokens (which establishes an initial price along the bonding curve) and then investors can buy and sell into the bonding curve, creating or destroying tokens according to the deterministic relationship between token supply and price established by the curve. Upon FDA approval of a resulting drug, token holders can be paid royalties via the trust. Eventually, it is hoped that patents will not be needed at all as the market embraces the favorable liquidity of IP-NFTs, especially as they can be treated as assets on a company balance sheet.

A liquid market for IP solves many of the misaligned incentives mentioned earlier. Because the innovation is already ‘on the market’, remaining undeveloped is highly unlikely: if one developer passes on the opportunity, another will take its place at a reduced cost. Having developed a drug, it also makes little sense to throttle its distribution because the licensing of the research is not exclusive and may be developed by other teams. As for negative results, they are incentivized by the opportunity for a team to take a short position on the bonding curve before releasing their results. An added layer of incentive alignment comes from the community of IP-NFT token holders who can vote on how the IP is developed and commercialized.

Being able to monetize very early-stage research starts a cascade of benefits for researchers, beginning with an independence from government grants as the sole source of funding. This frees them to pursue unconventional research areas and methods. Most importantly though, funding enables researchers to bridge the Valley of Death and fund the development of their own intellectual property.

Having developed their core infrastructure, Molecule put it to the test by launching VitaDAO : a decentralized collective focusing on research into longevity and the biopharmacology of aging.

The $VITA governance token was created via a Gnosis Auction that ran from June 18-23, 2021. This sale formed the basis of VitaDAO’s treasury, which they use to fund proposals .

Community-First

Long before the $VITA token existed, the primary goal for VitaDAO was to build a strong academic and scientific community. It was to be “...a scientific organization first, and a ‘blockchain project’ second,” according to Tyler. For Molecule, DAOs are simply organizational frameworks with the necessary incentive structures to scale projects like VitaDAO. Tyler characterizes their approach like this:

“The most important goal when building a community is to have strong alignment on mission, vision, and values. We wanted to attract folk that were intrinsically motivated by this mission, even without clear incentives, thus we began building a strong community before ever introducing a token. We started out by identifying a great first project to fund, speaking at academic conferences, and leveraging our pre-existing network to attract academics to the organization around a shared vision of democratizing longevity therapeutics development. Once a scientific and academic culture and community began to form, it became somewhat unstoppable. These organizations are prone to network effects, and due to low gatekeeping, people are continuously attracted to the organization over time. This becomes an even stronger force once incentives and bounties are in place, and contributors can meaningfully begin working with the organization.” — Tyler Golato, Co-Founder, Molecule.

DAO Structure

When structuring the DAO, the team opted for the most common governance process of a forum discussion on Discourse followed by a vote on Snapshot . The quorum requirement for a valid vote was set at 965,000 $VITA out of a total supply of 64,298,880 — approximately 1.5%.

The treasury itself is currently managed by a multi-signature Gnosis Safe wallet controlled by the core team. This is not decentralized and means that only members of the core team may schedule a vote, but it is a safe way to begin and allows the team to incrementally decentralize as VitaDAO and the community prove their viability.

Within the DAO, the team have set up seven working groups / guilds in addition to the core team: Legal, Awareness, Longevity, Governance, Operations, Tech, and Tokenomics. Again, exemplifying their cautious approach, membership of the working groups is not permissionless and must be applied for, but this helps to ensure that a strong, professional culture is established first before scaling the community too quickly.

As discussed, research proposals in the real world are fraught with funding and resource challenges. VitaDAO was founded to improve this process, so a lot of thought was put into how to attract the promising research that traditional organizations overlook and how to involve the community.

To this end, the funding application process is permissionless. Anyone may apply for funding here with a 500-1000 word proposal or be referred by the community. Every application is assessed by the Longevity Dealflow Working Group on a 4-tier scale. Anything in the first tier gets an all-important ‘stamp of approval’ and can present the proposal to the forum, while the second tier will be asked to clarify some follow-up questions. The last two tiers are encouraged to amend their application and apply again. During the forum stages, the community are aided in their decisions by detailed write-ups about the proposal and weekly community calls where they can meet the researchers and ask them questions. After receiving and incorporating community feedback, a first-tier proposal will move to a formal Snapshot vote by $VITA holders.

Molecule’s strategy from the beginning has been to solve the obvious and long-standing misalignment of incentives within the pharmaceutical industry. In a real sense, incentives are their competitive advantage. Before DAOs, the infrastructure to achieve this simply did not exist, but now they are able to distribute the cost, risk, and ownership of intellectual property to the benefit of patients and researchers. Behind the scenes, Molecule are putting in the hours to interface with institutions, think tanks, pharmaceuticals, and biotech companies to introduce them to a completely new way of conducting research.

In VitaDAO, Molecule have built a DAO, but also a prototype for any number of future DAOs that will use their framework. There are already a number of early pioneers: PsyDAO : a DAO with the goal to ‘Make Psychedelics Unmonopolizable’; and LabDAO : a community network of laboratory services.

For those looking to create their own DAOs, Molecule co-founder Tyler Golato has this advice:

“Start with a clear mission, vision, and objective. Have a strong sense of what values you want to imbue the community with. Find people who will build with you without a clear reward and at risk. Don’t launch a token or do anything web3 facing until you have a strong community and a clear mission. Don’t be afraid of setbacks and failures. Community is the single most important part of any project in this space, and you will be amazed at what can be achieved by a strong group of motivated people.

My other advice would be to align with others in the space that have already built similar organizations. Molecule, for example, is actively helping builders that wish to use the IP-NFT framework in their own organizations. We are beginning a small program to give grants and enable token swaps with mission/vision-aligned communities, with a goal of building biotech DAOs. Collaboration is stronger than competition, and this is a strong principle of the web3 space that I firmly believe in.”

Aragon is building the future of decentralized governance for Web3 communities & organizations. Deploy a DAO, manage your community, resolve disputes and run enterprise-level votes, all within our open-source stack. See the latest at aragon.org , subscribe to our monthly newsletter, join the conversation on Discord , or follow us on Twitter .

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Starting a research company here’s everything you should know first.

How to Start a Frozen Food Business From Scratch

Starting a research company from scratch until it successfully stands is no joke, and many business veterans can confirm that, and especially adopting a research business.

So, as you intend to establish your own research business, there are few, but essential questions that you’ll have to get answers.

The common questions include; where will your starting point be? Will you get the relevant support from clients in terms of consumers? Will they buy into your ideas? The questions are endless.

In short, starting a research company is very demanding, but there are remedies. Therefore, here are just among the right tips, besides the requirements you ought to know, to firmly establish your research business and make it thrive.

• Qualifications

To market a business concept, especially, research in our case means that you are fully acquainted with all relevant know-how besides the set skills that will be critical players in your enterprise.

It means that you have to take into considerations several factors such as; performing specific techniques, ability to employ certain devices, ease of assessing certain aftermaths, but most importantly, your capability to treat a particular group of individuals. 

The reason for keenly considering them is because they have enormous potential that can affect the approach to clinical investigations and research projects.

Additionally, correctly tackling the factors is a good indicator that you will successfully focus and thus, man-up the business.

Lastly, it is evidence that you are ready to handle all standard cost in addition to your budgets.

• Reaching your Target Population

Your target population here refers to the ability to access relevant community, for instance; their diversities, willingness to participate, an appropriate number of samples, and enough population samples.

In other words, what it means by target population is that;

You should have the ability to recruit, which will, in turn, give you a unique competitive advantage within the industry. 

Your database at hand is among the most significant commodities, and therefore, if you are not sure about the population available, then, there is no need of doing the study.

In short, all you need to do is to educate and nurture your database, plus ensure that setting of your default practice is the same as that of your patient data, and will be applicable for clinical research.

• Research Service List

Starting a research business means you are willing to spend a considerable amount of time and effort in developing a list of research fees that you will need.

In brief, some of the standard research fees incorporate, new surgical procedures, pre-screening, protocol amendments, and consultation charges and ethics submission fees.

All these costs require careful attention for a successful research business .

 On that note, there are precautions that you ought to take if at all the business will stand. For example, if you become ignorant of a proper study budget, you’ll automatically put the industry on an obvious risk.

You should also be willing to pay some cost such as when paying your staff, contractors and suppliers.

It is essential to handle them with care since they play a very significant role in your enterprise to ensure your business attain all your requirements. 

Therefore, as you mutually relate with your contractors and other players, you tend to reduce risks that involve retardation of your business, thus giving it the chance to stand.

• The Right Resources and Infrastructure

Well, this is where you have to do everything possible to get it right for the first time. That’s because it’ll require some things for most studies.

These usually include;

• Study coordinator
• Participant recruitment
• Specialty equipment
• The ability and ease to travel nationally, internationally and locally
• Specialty diagnostic
• A room in which you will use to assess the participant among others
• Have a Business Plan

Following the numerous research standard list which you will require, it’ll be necessary to raise enough capital to finance the project.

The business plan will, therefore, play a crucial role, especially when showing it to the investors. That’s because a well-written business plan has the potential of making your business succeed.

The plan likewise, shows that you are generating enough revenue, hence, prove to your investors that their funding was worth it.

However, since it is your first time to venture into the business, you can research your competitors; after that use their business plan to prepare yours.

• Familiarize with your Competitors

There are several reasons why you need to know your competitor. For instance, you can get valuable information on how they run their business, besides a few tips that keep them going plus the mistakes that you will need to avoid in your industry.

Apart from background knowledge, you are likely to find resourceful ways to employ while carrying out the research that involves your competitors.

Alternatively, you can make use of the internet’s Google and also explore other social sites. You can further attend conferences to get insight on healthy competition.

• Legalize your Business

Of course, you will need the freedom to operate your business freely, without any government interference or pestering.

It is, therefore, a requirement that you obtain all legal licenses and documentation to ensure that the business runs smoothly and legally. 

It’s simple, after registering the business; you may consider industrial licenses or even your location. To further make it out, refer to the below example;

A scenario where one wants to start a restaurant that sells beverages, the business owner , will have to obtain a beverage license.

So, it’s difficult, if not impossible, to run a business without the relevant legal documents. Therefore, ensure that you avoid any short cut that does not concur with the legal procedures.

• Your Business Should Have a Brand

You can make your business stand by having a brand name that you will display out in the market.

You can take the media businesses, for example. A good number of them are online. And remember that there are perfect ways to maintain dominant conventions. 

You can manage it by attending conventions and giving your product prices, or partner with other businesses that have been on the market for a while.

In a nutshell, having a business brand helps and allows you to learn the right practices within the market. 

• Stress on Feedback

One of the best ways to determine how your business is fairing on is by getting information from outsiders, especially from direct consumers.

To achieve that, you only need to let the customers interact with your service or product, and see their stand, on it.

It is after getting feedback, which you will be in a position to get information in either critique or positive feedback. 

You go the extra mile of taking note on their complains that relates to the product or service, it’ll give you an upper hand of gaining their trust, and in turn, it’s likely to have a positive effect to your business.

For your information, one of the simplest ways to make use of feedback is focusing on the lean start-up approach, which incorporates three fundamental pillars. 

The three pillars include experimenting, pivoting and prototyping. There are thus, few steps you ought to take, to properly handle feedback.

Have a look.

• Take a break

Usually, you’ll get excited to get a response from your consumers . You hence, don’t have to rush to actions as you may end up making wrong choices.

Take some time before concluding the next step.

• Appreciate the Feedback

Naturally, not everyone is going to give you positive feedback. You ought to, therefore, ethically, handle the negative comments about your services or products.

The aim is to portray the right image to the public for the growth and sustenance of the business.

• Take Note of the Patterns

If you continuously happen to be hearing the same comments, it means it’s your time to take action before the whole thing ruins. 

• Become Curious

You can decide to participate in healthy conversations, but be careful to let the customer be in control of the entire talk, to get as much information as possible.

• Ask Relevant Questions

After gathering all the data that pertains to your business, you can, therefore, get answers that will form the basis of a solution to your enterprise. 

 It’s not necessarily that you will take all, answers as some may be void. Only be sure to get that which will be of help to your business, and you’ll increase the chances of sustaining the business.

Final Thoughts Starting a Research Company

Now, you have it all. Therefore, regardless of all aggressiveness in the research field and the willingness to sustain your business, there are several things that you cannot escape.

Go no further than these tips. Simply employ them as you start your research company because they are among the first things that one has to equip with for a good start, and sustaining of a research company.

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How to Start a Market Research Company and Sell Reports for Profit

By: Author Tony Martins Ajaero

Home » Business ideas » B2B Industry » Market Research Firm

Do you want to start a market research company? If YES, here is a complete guide to starting a market research business with NO money and no experience plus a sample market research firm business plan template.

Business in this modern age has gone from just a roadside shop to a field of battle for supremacy. Often, corporations are so busy with running day-to-day operations that third-party providers are now required to do market research for them.

Market research companies have become priceless partners to companies interested in knowing and understanding the current and future health of their customers, visions and industry.

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• How to Make Money Selling Market Research Reports
• How Do Market Research Companies Make Money?

This industry from its inception has proven to be recession-proof in that organizations need to collect pertinent market data to operate optimally even in a down economy. Starting this business will definitely make you constantly learn about different markets, and in some cases to network with and even blend with business executives and everyday consumers.

When planning to start this business, you have to be well versed in the art of questionnaire creation, the most common research instrument. Experts on this industry believe questionnaires should include simple instructions, should progress from simple to more complex questions, and should be pre-tested on random subjects, even friends, to assess their simplicity and effectiveness.

It is also very important to know that it is better to focus on one niche than to attempt expertise in a myriad of industries. Specialize in one niche and try to gain more market share. The target market in this industry is massive due to a lot of reasons.

Market research improves businesses decision-making capabilities and it also reduces risk. It provides insightful information about the market, product, audience, competition, and more. Read on as we take you through the necessary things to do when planning to start a market research company.

How Market Research Companies Make Money

It should be noted that market research companies carry out services on behalf of their clients. When the research has been done and results collated, the market research company gets to submit its findings to their clients after which they get paid.

Market research companies usually do not get paid a certain determined lump sum for every research they undertake as the various research methods differ and some do involve more logistics than the others.

Generally, market research companies make money or get paid through question development, managing focus groups, per question asked etc.

i. Question development

Market research companies get to make their money from developing questions to administer to research groups. This method is usually used where the company only wants the research company to create appropriate questions to fit the research situation, but may not be needed to administer the questions. The company can then take the questions and conduct their own surveys while paying off the market research company.

ii. Managing focused groups

A focus group is a gathering of deliberately selected people who participate in a planned discussion that is intended to elicit consumer perception/reaction about a particular topic or product or service.

During a focus group, a group of individuals – usually 6-12 people – is brought together in a room to engage in a guided discussion of a topic. Market research companies sometimes utilize focus groups when carrying out market research. Market research companies get to bill their clients for organizing focus groups on their behalf because participants in focus groups always get paid for their time.

iii. Through billing per question asked

Some market research companies have been known to make money through billing their clients per questions asked.

iv. Research analysis

Market research companies have been known to bill separately for research analysis as against submitting raw data to their clients. Research analysis is predominantly part of the marketing research package, but some companies prefer to bill it separately.

Steps to Starting a Market Research Company and Sell Reports for Profit

1. understand the industry.

Reports have it that the global revenue of this industry has grown past 44 billion U.S. dollars in 2015, rising year-on-year since it experienced a slight dip in 2009 during the Great Recession. According to reports, North America generated the largest share of market research revenue at 44 percent, or 19.45 billion U.S. dollars in 2015, closely followed by Europe with 37 percent.

These regions also ranked first and second in terms of annual growth, with North America growing by 3.1 percent over 2014 and Europe by 2.8 percent. Nielsen Holdings, a united states Market research company, headquartered in New York City, was by far the largest market research company worldwide in terms of revenue in 2015. That year, the company’s revenue amounted to approximately 6.17 billion U.S. dollars – almost twice that of its closest competitor, Kantar, with revenues of 3.71 billion.

In the United States, market research industry leaders made over ten billion U.S. dollars combined in revenue in 2015. The same companies also employed more than 34 thousand people in the U.S. – Nielsen employees accounted for around one third of this figure.

The U.S. market research industry generates $20 billion in revenue annually. There was .4 percent annual growth in the industry between 2011 and 2016. Research has shown that this industry has experienced slow, steady growth the past few years, and growth is expected to speed up in the coming years due to stronger corporate profits and more market research opportunities online and with social media.

This industry is also new and is relatively young compared to other industries. It got its start in the early 1900s, when people started to take interest in the relationship between sellers and buyers.

2. Conduct Market Research and Feasibility Studies

• Demographics and Psychographics

Any successful entrepreneur would tell you wholeheartedly that market research is crucial for business growth. Businesses need to get concrete information before releasing a new product or service into a marketplace. Crucial information like demographics, help shed some light on whether a product will be well received in a certain region.

The objective of the market research company is to provide its clients with a snapshot view of a particular market, thereby reducing the financial risk involved in the launch of a new product. Your target market in this business is endless as every organization will always want to know how to best attract its required audience. Your target market may include…

• Banks, Insurance Companies and other related Financial Institutions
• Blue Chips Companies
• Corporate Organizations
• Manufacturers and Distributors
• Real Estate Owners, Developers, and Contractors
• Research and Development Companies
• The Government (Public sector
• Schools (High Schools, Colleges and Universities)
• Sport Organizations
• Religious Organizations
• Television Stations
• Printing Press (Publishing Houses) and Authors
• Branding and Advertising agencies
• Entrepreneurs and Startups

3. Decide Which Niche to Concentrate On

When planning to start this business, you have to first and foremost identify a sector or niche that you will specialize or focus on. Maybe you love finance, or organic products, or technology. Then choose a niche and maybe start a market research company for the financial industry in your area, for the organic snack niche, or the gadget and mobile device industry. There are various types of market research as there as business segments. Specialized areas of expertise include…

• Market testing using product samples
• Creating and tabulating customer satisfaction surveys
• Market segmentation research
• Brand equity research
• Mystery shopping
• Market segmentation

The Level of Competition in the Industry

The steady growth of this industry has totally encouraged more and more companies to invest in market research with a motive to grow their leads and also to introduce newer products. Unfortunately, the market research industry is seeing a slow but steady and consistent growth.

Reports have it that the sudden spurt of technological changes that are likely to take place in the year 2018 will likely impact the market research work. Experts still believe that the market research industry might struggle with the handling and implementation of the entire research aspects.

Reports have it that the market research industry will enjoy favourable growth in spite of the uncertainties prevailing at varied levels of micro-macro, political, economic and monetary. The market research industry as per the industry overview studies can expect a major shift in their business.

Have it in mind that the leading giants of the market research industry as per industry overview studies outsource their research needs to research firms. We believe that this step by the leading market research giants of the market research industry would be done to understand the complexity of the factors that drive the ever-evolving nature of the consumers, the supply chain, and the competitor’s motive including macro dynamics.

4. Know Your Major Competitors in the Industry

• Forrester Research
• Frost & Sullivan
• Gartner Group
• Hall & Partners
• Harris Interactive
• Decision Analyst
• International Data Corporation
• Off Madison Ave
• A. Walker Research Solutions
• Rockbridge Associates, Inc.
• SIS International Research
• StrategyOne
• D. Power and Associates
• Medimix International

Economic Analysis

We can all agree that businesses that sell products and services get to understand more about their current customers and target audiences through market research. They also use market research to learn more about their business reputation, brands, and other aspects of their organization. The very first step in the business planning process is market research.

Businesses use it to help avoid such challenges as market segmentation, which is the identification of specific groups within a market, or product differentiation, the creation of an identity for a service or product to distinguish it from that of competitors.

Businesses in the market research industry gather, record, tabulate, and present data on marketing and public opinions. The services that market research companies offer include sampling and statistical services, broadcast media rating services, market analysis services, and political polling.

It’s very important to note that a lot of organizations also have their own marketing departments. The types of jobs in the field include research director or manager, research analyst, operations director, fieldwork manager, and statistician/data processing workers.

We were able to note from our detailed research that 506,420 market research analysts and specialists were employed in the United States in May 2015. These individuals worked for management, scientific, and technical consulting services; wholesale trade companies; finance and insurance companies, among others. But note that most individuals who work in market research work in a team and collaborate on projects for clients.

5. Decide Whether to Buy a Franchise or Start from Scratch

We believe there are two ways to start a business full time, you start from the scratch or buy into a franchise. In the case of market research business, it is advisable that you start from the scratch. Market research is now a necessity in business process and many companies, especially small businesses, don’t have the time or the means to adequately research up on all their target markets.

This leaves an opening for you to start your own market research company from the scratch. Research has shown that a market research business has relatively low startup costs and low barriers to entry — you don’t need a special degree for this service, but you do need a firm understanding of laws and business industry. Starting from the scratch offers you this few advantages…

• It gives you the chance to choose what services you will provide and pick a niche
• You have control over your marketing strategy
• You choose your speed and scale of business
• It gives you control over your business

6. Know the Possible Threats and Challenges You Will Face

Just like we stated above, starting and running a market research business is not capital intensive, because you don’t need to purchase expensive machineries and equipment to run the business. But on the issue of labour, you can get few employees to run the business with you. But there are few challenges and barriers you might face when starting your market research company and they may include;

• writing a business plan
• Deciding on a suitable marketing strategy
• Deciding on a niche for yourself
• Registering your business as a company
• Renting an office space

7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)

Your ideal customers in this business should be corporate organizations both big and small, which is why you need to incorporate your business as a legal body because it may be difficult for you to get clients to use your services if they know you are running the business as a private individual, not a corporate firm. Advantages of incorporating your business includes…

• Boosts Your Business’ Credibility
• Perpetual Existence
• Gain anonymity
• Protecting your personal assets
• Have Easier Access to Capital

8. Choose a Catchy Business Name

• Market Solutions
• April Search
• Edge Information
• People Research
• Sterling Infosystems
• Argus Services
• FasTrak Services
• Klink Researchs
• Lighthouse Information Services
• Nation Research
• Paper Trails
• Certifix Live Scan
• Centre Markets

9. Discuss with an Agent to Know the Best Insurance Policies for You

Market research helps businesses do the job that will surely dictate the direction and success of the business. Organizations are always busy taking care of their day to day activities and so they outsource this task to other companies or experts. This creates a unique opportunity for you but don’t think it will come easily.

When you work from home to offer Market research services to your clients, the problem of lawsuits and liability claims may seem like a remote possibility. But you need to understand that your line of business bares you to unique risks – a lot of which come with price tags high enough to bankrupt a small-business owner.

And though you run your business from home, your Homeowner’s Insurance will not cover these losses. To protect your market research business, you need adequate business insurance coverage that can address your most pressing risks. They may include;

• General Liability Insurance.
• Errors & Omissions Insurance.
• Cyber Liability Insurance.
• Umbrella Insurance
• Property Insurance / Inland Marine Insurance.
• Business Owner’s Policy.
• Workers’ Compensation Insurance.

10. Protect your Intellectual Property With Trademark, Copyrights, Patents

When planning to start a market research company, we strongly suggest you consider going for intellectual property protection to be able to protect your intellectual property. Filing for intellectual property protection for a market research company goes beyond protecting your company’s logo and other documents, but also protecting your investments, patents and of course the name of your company.

If you want to file for intellectual property protection and also register your trademark in the United States, then you are expected to begin the process by filing an application with the USPTO. The final approval of your trademark is subjected to the review of attorneys as required by USPTO.

11. Get the Necessary Professional Certification

We still pinpoint the fact that you don’t need special skill or a college degree to start a market research firm; as long as you can carry out an extensive research and compile detailed information on your clients business needs, then you have what it takes to run the business, but also having a professional certification can boost your business and increase your cooperate identity.

• Certified Market Research Professional ( CMRP) certification
• The Certified Research Analyst (CRA)
• Certified Research Expert (CRE)
• Certified Research Professional (CRP)
• Certificate in Market and Social Research Practice
• Professional Researcher Certification (PRC)

12. Get the Necessary Legal Documents You Need to Operate

• Request for Reservation of Corporate Name.
• Articles of incorporation
• Corporate bylaws
• Minutes of First Meeting
• Stock certifications

Have it in mind that every state or even country has its own terms for issuing out such licenses, make an inquiry of the requirement for the State you are planning to run your business and get the license. Or better still, you can use the services of a lawyer to hasten up the process.

13. Hire Employees for your Technical and Manpower Needs

In this business, just like every other business, you should develop effective and strategic business plan to help plan your business for success. It will help you in predicting possible business problems and at the same time helps you identify the services you will offer.

We also suggest that you connect with powerful organizations that can help promote your company. Tying up with Chamber of Commerce and other associations gives you the opportunity to obtain updates about the latest business trends. You can also obtain valuable information by networking with your contacts.

You have to understand that you cannot run the business alone which is why you will need to hire qualified staff that have experience in marketing research. In looking for staff, you should include the requirements and job description.

It is recommended to hire competent employees as they can help you grow your marketing research company. Also have it in mind that establishing a solid connection with other local business owners will keep you in the right track and at the same time help you understand the client’s needs and challenges in the marketing.

The Service Delivery Process of the Business

Market research is very crucial for entrepreneurs who want their business to succeed and achieve more grounds. The market research process is a systematic methodology for making business decisions. The process involves six steps that help to achieve very reasonable results that would benefit both your supposed client and you financially and otherwise. Below are the six steps for conducting an excellent market research…

Know the Objective and the problem

The very first step and indeed the most important step in the market research process is knowing the goals of the project. This is the point where you have to know the root question that needs to be answered by market research.

There is typically a key business problem (or opportunity) that needs to be acted upon, but there is a lack of information to make that decision comfortably. When you understand the business problem clearly, you’ll be able to keep your research focused and effective.

Choose your Research Design

Then you have to think of the “research design” as your detailed plan of attack. Note that in this step, it’s very important that you first choose your market research method (will it be a survey, focus group, etc.?). You will also think through specifics about how you will identify and choose your sample (who are we going after?  where will we find them?  how will we incentivize them?, etc.).

Also at this point, you have to plan where you will conduct your research (telephone, in-person, mail, internet, etc.). Don’t forget to keep the end goal in mind–what will your final report look like? It will help you decide the types of data analysis you’ll be conducting (simple summaries, advanced regression analysis, etc.).

We believe that your choice of research instrument will be based on the nature of the data you are trying to collect. It’s very important to state that there are three classifications to think of…

Exploratory Research

This form of research is used when the topic is not well defined or understood, your hypothesis is not well defined, and your knowledge of a topic is vague.

Descriptive Research

If your research objective calls for more detailed data on a specific topic, you’ll be conducting quantitative descriptive research.

Causal Research

The most specific type of research is causal research, which usually comes in the form of a field test or experiment. In this case, you are trying to determine a causal relationship between variables.

Get your Research Instrument ready

At this point, you have to wonderfully design your research tool. If a survey is the most appropriate tool, then you will have to start by writing your questions and designing your questionnaire. If a focus group is your instrument of choice, then you have to start preparing questions and materials for the moderator. Also at this point you have to test your survey instrument with a small group prior to broad deployment.

Retrieve Your Data

This is where the main achievement and activity is, because at this point you then have to administer your survey, running your focus groups, conducting your interviews, implementing your field test, etc. The answers, choices, and observations are all being collected and recorded, usually in spreadsheet form. Each nugget of information is precious and will be part of the masterful conclusions you will soon draw.

Calculate Your Data

After you must have collected your data, it’s now time to convert those scraps of paper into a systematic spreadsheet form for further analysis. If it’s already in spreadsheet form, it’s time to make sure you’ve got it structured properly. Once that’s all done, the fun begins.

Then you have to do the summaries with the tools provided in your software package (typically Excel, SPSS, Minitab, etc.), build tables and graphs, segment your results by groups that make sense (i.e. age, gender, etc.), and look for the major trends in your data.

Know and understand Your Data and Communicate Results

After you must have taken your time going through your raw data, building useful summary tables, charts and graphs, you now have to compile the most meaningful information into a digestible report or presentation. A great way to present the data is to start with the research objectives and business problem that was mentioned earlier, then restate those business questions, and then present your recommendations based on the data, to address those issues. Don’t forget to present insights, answers and recommendations, not just charts and tables.

14. Write a Marketing Plan Packed with ideas & Strategies

Having numerous marketing factors can alter the profitability of your company, yet one feature seems to be part of the shared DNA of all effective marketing programs. Seasoned entrepreneurs usually have a solid foundation in marketing. But to achieve your goals, there are some other things you also need to learn about marketing your market research company.

Price Matching

It’s very important to state that price matching is a protection for buyers who are concerned that they could get a better deal elsewhere. For businesses, price matching deletes buying risk, convincing cautious consumers to buy now. The principle is simple:

Since pricing is a primary factor in product selection, your business should agree to match advertised competitor pricing. If they can find a similar proposition from another market research company with less pricing, then your customers will abandon your brand in droves. So always remember that pricing is a necessary aspect of your overall marketing strategy or plan.

Expertise in Marketing

Not having a personal marketing experience is not an excuse for not moving forward and achieving success in business. Large market research companies can’t afford to invest large sums of money in untested marketing strategies or first-time marketers. When in doubt, look into either an internal or external knowledge base to design your company’s marketing strategy.

Measurement and Evaluation

Have it in mind that there are no substitutes for measurement and evaluation mechanisms. A well bedded measurement and evaluation process should include metrics that can be monitored on a monthly, weekly or even daily basis.

These metrics can be used as a baseline for strategic planning. Given the importance of measurement and evaluation, market research companies often choose to consult with professional marketers for assessment tools and strategic insights.

15. Develop Iron-clad Competitive Strategies to Help You Win

The world has changed drastically and now it flows with integration. The world is now all about finding a common ground with your competitors. It’s about collaborating with each other to collectively get more customers. If you want to take your market research company to the next level, you have to know the power of partnerships.

We suggest that you stop seeing your competition as your enemy, learn to embrace it, instead of fighting it. By joining forces with your competitors, you’ll worry less about losing sales and be able to focus more on growing your business.

Now, the question is, how do you create joint ventures that give results without hurting your own profits? For starters, we strongly advise that you do your homework before you jump into any kind of partnership with a competitor. You need to understand and know them before jumping into bed with them, find a gap and make the best out of it. Excellent ways to leverage your competition to boost your market research company include….

• Conduct Free Value-Driven Webinars
• Create branded pdf reports
• Refer Service to Get Services In Return
• Give 100% Commission on a Front End service

16. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity

Have it in mind that your company needs to be recognizable and stand out from the rest if you want to keep progressing. Corporate identity allows your brand to speak with a unique and consistent voice. It helps you grow in people’s minds and start creating a particular impression in them.

Establish an Online Presence

With the world going vastly online, you have to create an online presence for your company. This website needs to contain explicit details of the services your company offers, contact information including email address and phone numbers.

Also an online customer service is needed on the site to attend to questions of website visitors. Then you should have a price package for each service you offer because corporate organizations or private individuals who are looking for good market research firms in your location may decide to look up the internet to find a good firm close to them.

Referral adverts

We also believe that you can spread the word around to your friends and acquaintances that you run a market research company. You can offer them an incentive for every client they refer to your company.

Send Out Proposals

Marketing being the primary task of every organisation is managed by the marketing department of any company. This is why we suggest you send out proposals to the marketing department of all the major firms and organisations in your city or state; stating that your firm will make their growth strategy easier by helping the company carry out thorough market research on any intended employee.

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Start » strategy, what is research and development .

Research and development provides businesses with the information they need to successfully bring their products or services to market.

In any industry, even the most revolutionary products and services are rarely fully conceptualized on day 1. Most often, success in the market stems from extensive, effective research and development (R&D). This is especially true for small businesses, which contribute a significantly higher percentage of sales to R&D work than larger businesses.

Here’s everything you need to know about R&D and why it’s well worth the investment.

What is research and development?

R&D refers to the various activities businesses conduct to prepare new products or services for the marketplace. Businesses of all sizes and sectors can partake in R&D activities, though the amount of investment can vary. For example, technology and health care companies tend to have higher R&D expenses , as do enterprises with larger budgets.

Typically the first step in the development process, R&D is not expected to yield immediate profits. Rather, it focuses on innovation and setting up a company for long-term profitability. During this process, businesses may secure patents, copyrights, and other intellectual property associated with their products and services.

At larger companies, R&D activities are often handled in-house by a designated R&D department. However, some smaller companies may opt to outsource R&D to a third-party research firm, a specialist, or an educational institution.

[Read more: 7 Ways to Find Small Business Grant Opportunities ]

Types of research and development

R&D activities typically fall into one of three main categories:

• Basic research: Basic research, sometimes called fundamental research, aims to provide theoretical insight into specific problems or phenomena. For example, a company looking to develop a new toy for children might conduct basic research into child play development.
• Applied research: This type of research is practical and conducted with a specific goal in mind, most often discovering new solutions for existing problems. The children’s toy company from the previous example might conduct applied research into developing a toy that facilitates play development in a new or improved way.
• Development research: In development research, researchers focus exclusively on applied research to develop new products and improve existing ones. For example, a team of development researchers may test the hypothetical company’s new toy or implement feedback obtained from customers.

Small businesses have limited resources. They don’t have that endless budget that the Fortune 500 company has, which means the small business will have to get creative to conduct worthwhile research and development.

Becca Hoeft, CEO and Founder of Morris Hoeft Group

Why invest in research and development?

While R&D can require a significant investment, it also yields several advantages. Below are four specific areas where your business can benefit by conducting R&D.

New products

R&D supports businesses in developing new offerings or improving existing ones based on market demand. By conducting research and applying your findings to your final product, companies are more likely to develop something that meets customers’ needs and performs well in the marketplace.

R&D can help businesses understand their place in the market as well as identify inefficiencies in their workflows. Insights from R&D activities can illuminate ways to improve operations as well as where to most effectively allocate resources, increasing overall efficiency.

Cost reductions

While developing a well-researched product or service that performs well is likely to maximize profit, R&D aimed at improving internal processes and technologies can reduce the cost of bringing products and services to market.

Businesses that invest in R&D may be eligible for specific tax incentives. For one, the federal R&D tax credit offers a dollar-for-dollar reduction in tax liability for businesses that partake in various research-based activities. Eligible companies can apply for this credit by submitting Form 6765 with their business taxes.

[Read more: How to Seek Funding for Your Invention ]

Overcoming the challenges of small business R&D

According to Becca Hoeft, CEO and Founder of Morris Hoeft Group , small businesses may face numerous challenges related to R&D that their larger counterparts might not experience.

“Small businesses have limited resources,” said Hoeft. “They don’t have that endless budget that the Fortune 500 company has, which means the small business will have to get creative to conduct worthwhile research and development.”

While R&D funding is available through various government grants, university programs, and research institutions, Hoeft noted that it may take some time and strategic planning to obtain it. She recommended that small business owners start talking publicly about what kind of research they are doing and what they need to conduct it.

“Don’t hide under a rock and expect money to magically appear,” Hoeft told CO—. “Get on a stage at a relevant conference [or] start a blog series about your idea.”

Keep in mind that once you start sharing your ideas and what you want to research, “it’s out there in the universe,” said Hoeft. Therefore, protecting your intellectual property before you begin and during the research process is extremely important.

“Ensure your trademarks, patents, and copyrights are in place to protect you and your small business,” Hoeft added.

[Read more: How to Qualify for and Claim the R&D Tax Credit ]

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How to Research a Company: The Ultimate Guide

Free Website Traffic Checker

Discover your competitors' strengths and leverage them to achieve your own success

Good company research can take many forms. Depending on your research goals, you might want to look at the strengths, weaknesses, opportunities, and threats of a market, or drill down into key industry leaders and emerging players to unpack their successes.

If you want to beat the competition, you need to know their business as well (if not better) than your own. The more intel you have, the quicker you’ll be able to spot and leverage opportunities, respond to market changes, and grow.

Read on to discover how to research a company online, tear down its strategies, and take over its market share.

What is company research?

Company research gathers and analyzes information about a business and its customers. This means understanding its performance data and target audience so you can optimize your own strategy.

In today’s fiercely competitive markets, doing good company research is a game-changer. In fact, a 2022 report on competitive intelligence found that 98% of businesses believe researching their competitors is vital for success.

If you have the right tools to collect accurate competitive intelligence , you’ll be able to anticipate your competitors’ moves and emerging threats to stay ahead and succeed.

How to do company research in 8 steps

Researching a company is a bit like doing detective work. The deeper you go, the more questions you ask, and the more curious you are, the better the outcome will be.

Here are eight steps to steer you through the process of doing company research.

1. Track top competitors

You want to know exactly what your rivals are doing, where they’re going, and how the competitive landscape is changing. With this data, you can carefully plan your next move and take action when and where it’s needed most. Competitive tracking tools like Similarweb give you the ability to track what your rivals are up to. You can measure each competitor’s digital footprint, and identify any changes or growth over time.

Did someone experience a sudden uptick in website visits? Would you like to know why and how? Perhaps they launched a new feature or ad campaign, or maybe its social channel is driving growth.

With Similarweb Research Intelligence, you get alerts about changes so you can be sure you’ll never miss a beat.

Analyzing the top performers in your industry will give you new ideas and provide targets for what is achievable for you.

Similarweb’s Analyze Industry Leaders tool will tell you who is winning in your industry based on their website performance. A Market Quadrant Analysis graph, or competitive matrix , provides a visual snapshot of the websites in your industry and how they compare based on different metrics. The industry leaders may inspire you to try new things, while the weaker competitors in your industry can provide you with swift opportunities to chip into their market share.

Pro tip: Similarweb’s Similar Sites tool helps you uncover up to 40 domains that are similar to yours. Finding these domains can be infinitely useful when conducting a competitive content analysis . You can audit these domains to learn more about their content strategy and upgrade your own.

2. Benchmark

Now that you have a good view of the market, you need to drill down into your competitors’ performance. You want to understand their metrics and KPIs so you can benchmark them against your own.

A company research and analysis tool can help you understand your competitors’ digital reach and performance. You can look at multiple websites or domains owned by a single company to analyze their aggregated data or look at a specific market. This will give you a good idea of the business’ size and market share .

You’ll also want to look at their engagement metrics and any changes over time. If you see their metrics improving, they are probably investing in a digital strategy . You should look into this to see what has been working for them. We’ll show you how in the next section.

Pro Tip: Don’t forget to look at mobile app intelligence too. There are five key metrics you’ll want to track when benchmarking an app:

• Demographics

3. Compare traffic and engagement

These days, it’s no longer enough to consider website traffic and engagement metrics on their own. The complete digital perspective of any company includes mobile app intelligence, alongside traditional desktop and mobile web metrics. You need to see the full picture before you make any judgments or decisions.

Using Similarweb digital intelligence, I wanted to view the key players in the travel industry – specifically travel booking sites, like booking.com, Expedia, and Airbnb. First, I want my company research to focus on mobile web and desktop traffic alone.

Using Similarweb Digital Research Intelligence, I can see the overall benchmarks for traffic and engagement. This shows metrics like monthly visits, unique visitors, pages per visit, bounce rate, and visit duration. 

The top websites include booking.com , Airbnb , Expedia , Agoda , and Hotels.com . So, in essence, these are my industry leaders .

However, knowing how important apps are these days to consumers, I want to consider app intelligence in my company research too. When I add this data into the mix, things look a little different.

On both Android and iOS: Expedia, Airbnb, VRBO, booking.com, and Hopper are my top five.

Now, my view of industry leaders has changed . We’ve got three key players who are leading desktop, mobile web, and app platforms; and four others, who respectively dominate different channels.

Here, you can see a range of engagement metrics that apply to mobile apps on Android. Including active users, number of sessions, and session times; which shows engagement, upturns, downturns, and opportunities at a glance.

So, when you view traffic and engagement metrics, make sure you explore desktop, mobile web, and app intelligence to get an accurate picture of what’s really going on.

4. View audience interests

Understanding cross-browsing behavior tells you what other sites your users are interested in. Maybe they are looking at other products and solutions like yours!

This audience interests tool allows you to evaluate the browsing behavior of your target audience, helping you understand user intent and their purchasing process. You might even discover new markets or a specific niche audience , and come up with new audience acquisition strategies.

5. Pinpoint audience overlap

Who else holds your potential customer’s attention? With Similarweb’s Audience Overlap feature, you can analyze metrics and insights on the overlap of visitors across up to five websites for a selected time period and geographical region. You’ll be able to determine the size of your total addressable audience , evaluate what part of the audience is shared, and pinpoint your unreached audience potential.

This is also a good way to gauge audience loyalty . You’ll see the proportion of monthly active users who look at multiple sites in the same category or just one site.

6. Analyze specific pages

While a company may be your competitor, you may not be competing on every front. You might only want to look at a particular segment of a business when doing your company research. This ensures that your insights are specific and useful, and leave out less relevant information.

Similarweb’s Segment Analysis tool lets you slice the URL of a website to analyze just the parts that are relevant to you. You can deconstruct their website to look at a specific category, topic, brand, or whatever else interests you. This can help you benchmark a specific line of business or individual products.

This analysis is extremely powerful for marketing and sales managers, data analysts, and BI specialists who want to optimize their strategies for specific business segments. For example, if you are a clothing retailer looking to launch a line of kids’ clothes, you can use this tool to analyze your competitors’ kids’ clothing lines.

7. Reveal successful conversion strategies

What makes customers convert? The only way to know for sure is to analyze conversion data across your industry. You need to understand the conversion funnel, which keywords and marketing channels drive traffic, and which trends your potential customers are interested in.

You can get a unique view of your industry’s conversion data with Similarweb’s Conversion Analysis tool . Check out each company’s conversion efficiency and how they scale over time. You can identify efficient marketing channels , go-to-market strategies, and their ROI for marketing spending. You can also benchmark your metrics across the industry average.

Understanding conversion strategies also reveals opportunities for your own growth. You can examine category performance at top retailers such as Amazon, Walmart, and Target, and identify what consumers are searching for at the different retailers and what converts. When you understand the customer journey, you can better position yourself to guide them toward purchasing from you.

8. Research mobile app performance

When you research a business, you need to look at all customer touchpoints. Today, that means analyzing apps alongside web and mobile web traffic. You want to know how well your competitors’ apps rank so you can focus on your own app strategy. With rapid consumer adoption of mobile-first spending ( 46% of people now complete a full purchase via mobile ), app intelligence is a key consideration for any type of company research. In almost every industry, the digital landscape changes when you add app intelligence metrics.

If you’re looking at apps competitively, you want to consider:

• Monthly/ Daily Active Users
• No. of sessions/session time
• Sessions per user
• Overall rank
• Category rank
• User retention
• App demographics

Similarweb App Intelligence Premium now provides a few ways to help you view app rankings , downloads, engagement, and usage metrics across both Android and iOS. From benchmarking an app to unpacking the successes of those with apps in your market; good company research should include app analysis. By unifying digital insights, you see a truer picture of a company’s successes online.

How to research a company like an expert

Follow these eight steps and you’ll quickly be able to research any company in any niche like a pro. Uncover key insights that tell you more about a market, target audience, or competitors to shape your own strategy for success.

Ready to get growing? Grab a free trial of Similarweb today.

See Similarweb In Action

Don't miss out! Have the latest data at your fingertips.

Why do company research?

Your business doesn’t exist in a vacuum. You’re competing with other companies and operating in an industry that has its own norms and expectations. If you want to succeed, you need to research other companies in your industry to ensure your strategy is aligned, but also positioned to give you a competitive advantage . You won’t be able to do this without researching other companies.

What to look for when researching a company?

You want to review all their company metrics, including traffic and engagement metrics, and look at their strategy, focus, processes, and content. You should search for any interesting ideas and identify where the company excels. All the data you collect will be valuable for you to compete.

What can company research tell you?

Good company research shows you how a market, company, and its target audience’s interests change over time. It can help you develop your own strategy for growth, and shows trends and emerging threats to watch out for.

by Liz March

Digital Research Specialist

Liz March has 15 years of experience in content creation. She enjoys the outdoors, F1, and reading, and is pursuing a BSc in Environmental Science.

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How to Start a Research Business

• Small Business
• Advertising & Marketing
• Business Research
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How to Create an Earthlink Web Mail

How to contact someone using linkedin, how to market your civil engineering practice on the internet.

• How to Create a Tutoring Business
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A research business provides consulting services to people who desire to obtain data about specific topics. The research consultant gathers information from credible sources and provides an analysis of his findings. Research consultants can also interpret the information for clients. A research business owner or consultant is also called an information broker, and many companies hire information brokers to perform research services.

Establish your market niche and ascertain what type of research services you will offer. Basically, your market niche is the image you will portray to the world and how you want others to perceive your business. You may be an expert in a specific profession, such as accounting, law, genealogy or education. Alternatively, you may want to provide research services for a variety of different topics. If you choose a specific niche for your research services, refresh your knowledge and conduct your own research on the topic. For example, if you intend to provide information about statistics, develop a clear understanding of how data are collected for statistics and understand how to interpret statistics.

Make a list of credible resources that will provide accurate information related to your specific type of knowledge. You can utilize online magazines, government resources, online encyclopedias and published books. Also, depending on the type of information you will provide, it may be beneficial to develop connections with experts in the field. For instance, if you plan to offer information about educational topics, it will be helpful to develop a relationship with school administrators, teachers or professors.

Determine how you will deliver the findings of your research to clients. You can provide Internet-based research and deliver the information to customers via email. Set up a website with a web hosting service. Market your site with search engines, and provide an email account to enable potential customers to email their proposals for research. Additionally, you will need to determine how customers will pay for your services, for example through an account you set up with an e-commerce business. Alternatively, you may opt to consult directly with business owners and potential clients. Either way, develop a plan for how you will provide information to clients and how you will charge.

Market and advertise your services to potential clients. Establish relationships with potential clients and other business owners. Advertise your services via a website, message boards, business cards and proposals to companies. Join professional associations and network with other consultants. Additionally, developing an effective marketing strategy allows you to categorize your target markets and understand how to successfully promote your services to ideal clients. Your potential clients for a research business can encompass a wide range of people and businesses that wish to obtain accurate information on a variety of topics.

• Internet Based Moms: Start an Internet Research Business
• PowerHomeBiz: Starting an Information Broker Business
• Business.gov: Market Research

Marie Huntington has been a legal and business writer since 2002 with articles appearing on various websites. She also provides travel-related content online and holds a Juris Doctor from Thomas Cooley Law School.

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Marketing & Branding

• 21 Jul 2020

How to Start a Market Research Company

Andrew Moran

In the age of big data, advanced analytics and an internet economy, market research has never been more imperative and precise than it is today. With a treasure trove of both detailed and minute information about consumers, businesses can study new ways of selling their products and marketing their services.

Suffice it to say, analysts contend that  data is the new crude oil , and a market research company can extract this information with a myriad of technologies and strategies. With expertise in the field of marketing and tapping into your  entrepreneurial skills , you can become a pioneer comparable to the oil drillers of the 19th century who improved our standard of living forever.

Are you an  entrepreneur  interested in dipping your toe in market research? We have compiled a step-by-step guide to help you get started and ensure your success!

1. Plan your business

Before you make your first cold call or conduct your first survey, it is important to plan your new market research company. There are many different components you need to consider to ensure that you are still open for business in the next five years.

First, determine your target market. Will they be consulting firms, advertising agencies or research departments? Will you be concentrating on B2B market research or public policy polling? Will you offer your services to retailers, financial institutions or airlines?

Second, are you charging a blanket fee? Or will your costs vary from client to client? Will you conduct research in advance and then sell the results to organisations? Indeed, every customer will have unique needs. Typically, a couple of hundred telephone surveys can generate at least $5,000, while mail surveys can bring in about $7,000 in revenues.

Third, what will be the name of your company? Whatever you choose, it is also a good idea to use it as your web domain, so perhaps you will need to think about a corporate name from a search engine optimisation vantage point.

Fourth, will you be operating your corporate entity in an office or from your home?

2. Establish your online presence

For the most part, you will attain your clients through  digital marketing efforts . While offline initiatives are welcome and fruitful, your website and online advertisements will prove to be the most effective methods of adding clients to your Rolodex.

So, what should your overall digital marketing strategy look like in this type of market? Here are some tips to help you get started:

• Paid advertising: You can target your audience with dedicated advertising campaigns, or you can pay for the privilege of being a top listing on a search engine results page that is relevant to a particular search query.
• Content marketing: Content is king, and you can leverage the power of an excellent  content marketing strategy that showcases your authority status in the industry.
• SEO: Search engine optimisation is more than just your placement on Google. SEO now involves speeding up your website, linking to other websites with relevant content, getting trustworthy websites to link to yours and creating unique content.
• Social media: If you’re not using Facebook or Twitter, then you should be. Being  active on major social networks is critical for any digital marketing campaign, even if it is just as simple as sharing content, engaging with the community and answering customer inquiries.
• KPI: Whether you choose to integrate all your marketing channels, or you are going through them one by one, you need key performance indicators (KPIs) that can determine if your efforts are working. For sales, the number of new contracts signed per period or the number of engaged qualified leads in sales funnel. For financial KPIs, operational cash flow and net profit margin are useful measurements of success.

This is how you establish your presence in the vast digital ocean. It might require some upfront investment but pouring money into a digital marketing campaign is worth every penny.

3. Define your brand

Across Europe and North America, there are hundreds of market research firms. The critical question to ask is what makes you different from the myriad of other comparable organisations in your field.

Some companies are a one-stop-shop for all kinds of market research services. Others specialise in one area. When you are starting out, the best thing to do is to concentrate on one speciality.

Here are some niche concepts for your market research business:

• Conducting customer satisfaction surveys
• Performing mystery shopping for businesses
• Completing market segmentation research to divide a broad consumer market into sub-groups based on shared traits
• Testing market response to goods and services
• Executing brand equity research to understand consumers’ opinions of brands

How will you define your brand?

4. Brace for startup costs

Every enterprise will need to endure startup costs that will serve as seeds to grow your company. For a market research company, you need more than just your personal laptop and the Yellow Pages.

A professional outfit consists of the following:

• Office lease: Of course, how much you spend on leasing an office will vary in your region. You need to aim for a central and easily accessible location.
• Enterprise software: The software industry has produced many types of applications that are tailored to the market research sector. Software companies have come up with a wide variety of programmes with a particular type of client or industry. Many seasoned market research veterans do recommend employing a team of software developers to construct your own software solutions once you have grown.
• Technology: For your team to do their job, you will need the necessary equipment such as computers, telephones, mobile devices and any other type of technology that is relevant to your research efforts.
• Insurance: Business insurance is necessary for a company to operate with peace of mind. By purchasing business insurance, your firm’s purse will remain intact in the event of a covered loss. Although there are plenty of insurance policies to choose from, you can always start with general liability and workers’ compensation insurance.
• Fees: You will come across plenty of fees, but the two most common are professional and supplier fees. The former involving paying specialised professionals for their expertise, such as an accountant for tax purposes and an attorney for contracts. The latter consists of paying vendors for procurement.

There are also going to be ongoing expenses, such as website hosting, utilities, payroll (wages, benefits and bonuses) and telecommunications (phone and internet).

5. Prepare your business documents

The most common form of  business documents  is of the legal variety. This is probably also the most headache-inducing compared to everything on this list. Indeed, just reading through government paperwork – the blue and pink forms, especially – can give you a migraine. That said, since these are an essential part of running a company, you should have some idea of what you will be needing to get the company running.

Your adventures commence by forming a legal entity by completing and submitting applications for a business structure, whether it is a corporation or an LLC. Market research firms typically  register their companies  by applying for a limited liability company since it protects you from being personally liable if the firm gets sued.

The next step is to register for taxes. Every jurisdiction possesses different rules and regulations regarding business taxes, but you will generally need a tax number to pay your federal and state or provincial taxes.

Again, the permits and licenses you need will depend on the jurisdiction. Ultimately, you will need to inquire with your state or provincial and municipal departments to learn about necessary permits and licenses. Failing to do so could result in hefty fines!

Legal experts usually recommend market research firms to get their hands on informed consent agreements and services contracts. These are contractual documents that reduce your legal liability and foster transparency between all parties.

6. Open a business bank account

It would be prudent for your finances, and the  finances of your company , to open a business bank account. Instead of tapping into your personal chequing account, you can pay for every business-related expense through an account that is dedicated primarily to your enterprise. Whether you are paying overhead or receiving funding from a small business loan, every dollar meant for your company needs to be deposited, spent through a business bank account and accounted for at the end of each workday.

What better way to monitor your business budget?

Moreover, it would also be beneficial to apply for a business credit card. Most financial institutions will offer their business clients one of these cards, so be sure to take advantage of them. Some banks will go as far as providing you with special offers and discounts.

7. Hire specialists

Inevitably, you will  hire employees  to fill certain roles within your company. But it is vital to take a different approach to human resources. Since there are hundreds of competitors in your industry, you want to hire specialists in their respective fields - not just workers.

By hiring quality professionals who have already established their place within their niche, you can immediately elevate your startup to the next level. Plus, what better way to attract clients than by maintaining a roster of top talent?

Consider the 1941 classic Citizen Kane. Charles Foster Kane transformed his newspaper overnight by hiring the best reporters in the country from a competing and more successful publication. You do not need to poach another organisation but launching a crusade to  find top-tier talent  is the way to go.

8. Build your client base

You have the website. You have the team. You have the technology and software. Now you need the clients. But how do you find clients? While some customers will eventually come to you due to ads or connections, you need to do the legwork during your business’s infancy period. This consists of making cold calls to companies, looking into your existing contacts, attending industry conferences and researching businesses or organisations that may need to conduct market research.

Of course, this is potentially the hardest part of running a new company. But who said  starting a business  was easy?

According to a  2020 report by Research and Markets , the market research sector is expected to rebound and grow at a compound annual growth rate (CAGR) of 4% to $82.9 billion in 2021.

Your startup can take its share of the pie. But this can only be achieved with the right business model, the best experts in their field and unique tactics of attaining market data.

Do you own a market research business? Share your industry tips in the comments section below!  

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How to Conduct Market Research for a Startup

• 17 Mar 2022

With every innovative product idea comes the pressing question: “Will people want to buy it?”

As an entrepreneur with a big idea, what’s the best way to determine how potential customers will react to your product? Conducting market research can provide the data needed to decide whether your product fits your target market.

Before launching a new venture, you should understand market research. Here’s how to conduct market research for a startup and why it’s important.

Access your free e-book today.

What Is Market Research?

Market research is the process of gathering information about customers and the market as a whole to determine a product or service’s viability. Market research includes interviews, surveys, focus groups, and industry data analyses.

The goal of market research is to better understand potential customers, how well your product or service fits their needs, and how it compares to competitors’ offerings.

There are two types of research you can conduct: primary and secondary.

• Primary research requires collecting data to learn about your specific customers or target market segment. It’s useful for creating buyer personas, segmenting your market, and improving your product to cater to customers’ needs .
• Secondary research is conducted using data you didn’t collect yourself. Industry reports, public databases, and other companies’ proprietary data can be used to gain insights into your target market segment and industry.

Why Is Market Research Important for Entrepreneurs?

Before launching your venture, it’s wise to conduct market research to ensure your product or service will be well received. Feedback from people who fall into your target demographics can be invaluable as you iterate on and improve your product.

Performing market research can also help you determine a pricing strategy by gauging customers’ willingness to pay for your product. Additionally, it can improve the user experience by revealing what features matter most to potential customers.

When assessing which startups to fund, investors place heavy importance on thorough market research that indicates promising potential. Providing tangible proof that your product fulfills a market need and demonstrating you’ve taken the time to iterate on and improve it signal that your startup could be a worthwhile investment.

Related: How to Talk to Potential Investors: 5 Tips

How to Do Market Research for a Startup

1. form hypotheses.

What questions do you aim to answer through market research? Using those questions, you can make predictions called hypotheses . Defining your hypotheses upfront can help guide your approach to selecting subjects, researching questions, and testing designs.

An example question you may ask is: “How much are people in my target demographic willing to pay for the current version of my product?” Your hypothesis could be: “If my product contains all its current features, customers will be willing to pay $500 for it.”

Another example question you may ask is: “What’s the user’s biggest pain point, and is my product meeting their needs?” Your hypothesis could be: “I believe the user’s biggest pain point is needing an easy, unintimidating way to learn basic car maintenance, and I predict that my product meets that need.”

You can and should test multiple hypotheses, but try to select no more than a few per test, so the research stays focused.

Related: A Beginner’s Guide to Hypothesis Testing in Business

2. Select the Type of Research Needed to Test Hypotheses

Once you’ve formed your hypotheses, determine which type of research to conduct.

If your hypotheses focus on determining your startup’s place in the broader market, start with secondary research. This can include using existing data to determine market size, how much of that market your startup could reasonably own, who your biggest competitors are, and how your brand and product compare to theirs.

If your hypotheses require primary research, decide which data collection method best fits your needs. These can include one-on-one interviews, surveys, focus groups, and polls. Primary research allows you to gather insights into customer satisfaction and loyalty, brand awareness and perception, and real-time product usability.

3. Identify Target Demographics and Recruit Subjects

To gather meaningful insights, you need to understand your target demographic. Do you aim to cater to working parents, young athletes, or pet owners? Determine the type of person who can benefit from your product.

If you conduct primary research, you need to recruit subjects. This can be done in several ways, including:

• Word of mouth: The simplest but least reliable way to recruit participants is by word of mouth. Ask people you know to refer others to be research subjects, then screen them to confirm they fit your target demographic.
• Promoting the study on social media: Many social media platforms enable you to show an ad to people who fall into specific demographic categories or have certain interests. This allows you to get the word out to a large number of people who qualify.
• Hiring a third-party market research company: Some companies provide full market research services and recruit participants and conduct research on your behalf.

However you recruit subjects, ensure they take a screener survey beforehand, which allows you to determine whether they fit the specific demographic you want to study or have a trait that eliminates them from the research pool. It also provides demographic data—such as age and race—that enables you to select a diverse subset of your target demographic.

In addition, you can offer compensation to boost participation, such as money, meal vouchers, gift cards, or early access to your product. Make it clear that compensation is in appreciation for subjects’ time and honest feedback.

4. Conduct the Research

Once you’ve determined the type of research and target demographic necessary to test your hypotheses, conduct your research. To reduce bias, enlist someone unfamiliar with your hypotheses to perform interviews or lead focus groups.

Ask questions based on your audience and hypotheses. For instance, if you’re aiming to test existing customers’ purchase motivations, you may ask: “What challenge were you trying to solve when you first bought the product?”

If examining brand perception, your audience should consist of potential customers who don’t yet know your brand. Present them with a list of competitor logos—with yours in the mix—and ask them to rank the brands by perceived reliability.

While the questions you ask are vehicles to prove or disprove hypotheses, ensure they don’t lead subjects in one direction. To craft unbiased research questions , use neutral language and vary the order of options in multiple-choice questions. This can keep subjects from selecting the same option each time if they sense the third option is always mapped to a certain outcome. It also helps account for primacy bias (the tendency to select the first option in a list) and recency bias (the tendency to select the final option in a list).

Once you’ve collected data, ensure it’s organized efficiently and securely so you can protect subjects’ identities .

Related: 3 Examples of Bad Survey Questions and How to Fix Them

5. Gather Insights and Determine Action Items

After you’ve organized your data, analyze it to extract actionable insights. While some of the data will be qualitative rather than quantitative, you can detect patterns in responses to make it quantifiable. For instance, noting that 15 of 20 subjects mentioned feeling overwhelmed when attempting to assemble your product.

Once you’ve analyzed the data and communicated emerging trends using data visualizations , outline action items.

If the majority of users in your target demographic reported feeling overwhelmed while assembling your product, action items might include:

• Creating different versions of assembly instructions to test with other groups, varying diagrams and instructional language
• Researching instruction manual best practices

Each round of market research can offer more information about how your product is perceived and experienced by potential users.

Market Research as an Ongoing Endeavor

While it’s useful to conduct market research before launching your product, you should revisit your hypotheses and form new ones over the course of building your venture.

By conducting market research with each version of your product, you can gradually improve it and ensure it continues to fit target customers’ needs.

Are you interested in bolstering your entrepreneurship skills? Explore our four-week online course Entrepreneurship Essentials and our other entrepreneurship and innovation courses to learn to speak the language of the startup world.

About the Author

How to Start a Market Research Firm

Market research firms offer specialized marketing services to their clients. They collect and analyze data to determine how well their clients are connecting with their target audience. Additionally, these firms identify industry trends and advise clients regarding what tactics they should continue and what new strategies should be implemented.

You may also be interested in additional online business ideas .

Ready to turn your business idea into a reality? We recommend forming an LLC as it is the most affordable way to protect your personal assets. You can do this yourself or with our trusted partner for a small fee. Northwest ($29 + State Fees) DIY: How to Start an LLC

Start a market research firm by following these 10 steps:

• Plan your Market Research Firm
• Form your Market Research Firm into a Legal Entity
• Register your Market Research Firm for Taxes
• Open a Business Bank Account & Credit Card
• Set up Accounting for your Market Research Firm
• Get the Necessary Permits & Licenses for your Market Research Firm
• Get Market Research Firm Insurance
• Define your Market Research Firm Brand
• Create your Market Research Firm Website
• Set up your Business Phone System

We have put together this simple guide to starting your market research firm. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Exploring your options? Check out other small business ideas .

STEP 1: Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

What will you name your business?

• What are the startup and ongoing costs?
• Who is your target market?

How much can you charge customers?

Luckily we have done a lot of this research for you.

Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Market Research Firm Name Generator

If you operate a sole proprietorship , you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.

When registering a business name , we recommend researching your business name by checking:

• Your state's business records
• Federal and state trademark records
• Social media platforms
• Web domain availability .

It's very important to secure your domain name before someone else does.

Find a Domain Now

Powered by godaddy.com, what are the costs involved in opening a market research firm.

Those who are limited in capital have found success working out of a home office the first few years. However, if your immediate plan is to build a team and meet with clients in an office setting, you will need to invest in a professional office.

The following are standard costs associated with setting up an office:

• Lease - Cost varies, depending upon your region. Location should be easily accessible and centrally located.
• Office equipment - Computers, phones, and business software applications.
• Market research software - There are a number of software applications available, with many designed with a specific type of client or industry in mind. As time goes on, it might be cost-effective to employ a team of software developers that can build a software solution specifically geared towards your niche.
• Payroll and associated expenses - To attract (and retain) the very best in the industry, you must provide your workforce with pay relevant to their experience.
• Professional fees - In this business endeavor, it is recommended that you seek the guidance of specialized professionals. Hire an accountant to handle the books and an attorney to draw up contracts, etc.
• Supplier’s fees - Once you gain your first client, there will be supplier’s fees associated with each project.
• Insurance - Speak with a licensed professional regarding coverage requirements.

Should you opt to start out as the sole contributor to the business, start-up expenses would be fairly minimal compared to many business ventures. Owners should budget for a minimum of $25,000 in start-up expenses.

What are the ongoing expenses for a market research firm?

In addition to the standard overhead expenses that come with leasing an office space, expect to incur the following costs:

• Payroll - Offer an appealing benefits package to attract and retain the industry’s top talent.
• Supplier fees
• Website hosting
• Software and/or software developers
• Professional fees

Who is the target market?

There are a number of different paths you could take when it comes to defining your target market. The key is to find your niche and become an expert in this. As you build your team, hire quality professionals who have carved out their own niche.

What is your area of expertise? Do you want to work for direct clients or survey advertising agencies, consulting firms, research departments, or survey companies? Are your strengths in B2B market research or job satisfaction measurement?

How does a market research firm make money?

Your firm will generate revenue from each paying client. One customer’s needs will be different from the next. Your pay is defined by their short and long-term goals, the size of the company, and their budget. These will, hopefully, be ongoing clients that you build relationships with. Their growth signifies your value. The value your firm adds to the enterprise will define their needs moving forward, your role in this, and how much you’re able to charge each client.

Fees vary, depending upon the scope of the project. Two hundred phone surveys could bring in between $5,000 and $15,000, while mail surveys would generate $5,000 - $7,000 in revenue.

How much profit can a market research firm make?

Profits vary, depending upon ongoing expenses, the number of contracted clients, and the level of services you provide them. The National Average for a single employee business is just over $51,000.

How can you make your business more profitable?

To increase your profit margins, consider:

• Developing a full service marketing firm. Offer a full suite of services, such as content marketing and multimedia advertising firm
• Develop industry-specific business management and marketing tools and software solutions

Want a more guided approach? Access TRUiC's free Small Business Startup Guide - a step-by-step course for turning your business idea into reality. Get started today!

STEP 2: Form a legal entity

One crucial aspect that cannot be overlooked when starting your market research firm is the importance of establishing a solid business foundation. While sole proprietorships and partnerships are the most common entity types for small businesses, they're a far less stable and advantageous option than LLCs.

This is because unincorporated business structures (i.e., sole proprietorships and partnerships) expose you as an owner to personal liability for your business's debts and legal actions, while LLCs protect you by keeping your personal assets separate from your business's liabilities.

In practice, this means that if your market research firm were to face a lawsuit or incur any debts, your savings, home, and other personal assets could not be used to cover these costs. On top of this, forming your business as an LLC also helps it to appear more legitimate and trustworthy.

More than 84% of our readers opt to collaborate with a professional LLC formation service to kickstart their venture. We've negotiated a tailored discount for our readers, bringing the total down to just $29.

Form Your LLC Now

Note: If you're interested in more information before getting started, we recommend having a look at our state-specific How to Start an LLC guide (DIY) or our in-depth Best LLC Services review (for those opting for a professional service).

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

You can acquire your EIN through the IRS website . If you would like to learn more about EINs, read our article, What is an EIN?

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil .

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.

Get a business credit card

Getting a business credit card helps you:

• Separate personal and business expenses by putting your business' expenses all in one place.
• Build your company's credit history , which can be useful to raise money later on.

Recommended: Apply for an easy approval business credit card from BILL and build your business credit quickly.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

State & Local Business Licensing Requirements

Certain state permits and licenses may be needed to operate a market research business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits .

Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses .

Services Contract

Market research businesses should require clients to sign a services agreement before starting a new project. This agreement should clarify client expectations and minimize risk of legal disputes by setting out payment terms and conditions, service level expectations, and intellectual property ownership.  Here is an example service agreement.

Recommended: Rocket Lawyer makes it easy to create a professional service agreement for your market research business when you sign up for their premium membership. For $39.95 per month, members receive access to hundreds of legal agreements and on call attorneys to get complimentary legal advice.

Certificate of Occupancy

Businesses operating out of a physical location typically require a Certificate of Occupancy (CO).  A CO confirms that all building codes, zoning laws and government regulations have been met.

• If you plan to lease a location :
• It is generally the landlord’s responsibility to obtain a CO.
• Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a market research business.
• After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
• If you plan to purchase or build a location :
• You will be responsible for obtaining a valid CO from a local government authority.
• Review all building codes and zoning requirements for your business’ location to ensure your market research business will be in compliance and able to obtain a CO.

Informed Consent Agreement

It is recommended to provide clients with informed consent agreements to decrease legal liability and encourage transparency.

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance . This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance . If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

FInd out what types of insurance your Market Research Firm needs and how much it will cost you by reading our guide Business Insurance for Market Research Firm.

STEP 8: Define your brand

Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.

If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners , we'll give you helpful tips and advice for creating the best unique logo for your business.

Recommended : Get a logo using Truic's free logo Generator no email or sign up required, or use a Premium Logo Maker .

If you already have a logo, you can also add it to a QR code with our Free QR Code Generator . Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.

How to promote & market a market research firm

There are a number of market researchers out there fighting for the same business you are. Consider your own business the firm’s first client. What does your target audience respond most to? Build a marketing strategy around that. Highlight your strengths through the use of existing contacts, networking, and cold calling. Get involved by attending conferences. Offer to speak at a conference or become a committee member.

Leaders in the Market Research industry urge maintaining a strong social media presence. Twitter, YouTube, Facebook, and LinkedIn are wonderful tools for making connections and building a client base.

How to keep customers coming back

Your first step is to build a reputation of trust within the community and with each client. Once this has been established, remain ethical and deliver results. Your customers understand your potential value, or they would not seek out your expertise. It’s up to you to prove your value.

STEP 9: Create your business website

After defining your brand and creating your logo the next step is to create a website for your business .

While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.

Here are the main reasons why you shouldn’t delay building your website:

• All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
• Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
• Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.

Recommended : Get started today using our recommended website builder or check out our review of the Best Website Builders .

Other popular website builders are: WordPress , WIX , Weebly , Squarespace , and Shopify .

STEP 10: Set up your business phone system

Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.

There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2023 to find the best phone service for your small business.

Recommended Business Phone Service: Phone.com

Phone.com is our top choice for small business phone numbers because of all the features it offers for small businesses and it's fair pricing.

Is this Business Right For You?

Individuals who enjoy understanding people on a deeper level make the best market researchers. They consistently seek new ways to grow and learn and are passionate about passing this knowledge on to others.

Want to know if you are cut out to be an entrepreneur?

Take our Entrepreneurship Quiz to find out!

Entrepreneurship Quiz

What happens during a typical day at a market research firm?

Your marketing firm’s top priority is connecting your clients with their current and potential clients. This means that the bulk of your day will be spent conducting research. This is an ever-evolving field. Your clients' customers are, in essence, your customers. Their needs are dynamic. Stay up-to-date on the latest trends and innovations in technology, as well as new research tools and methodologies.

When you’re not researching directly for a client, you are researching for your own firm and its future clients. To realize success in this industry, it is critical that you establish yourself as a thought-leader. A portion of each day is spent writing, both for your own business and your customers. Publishing white papers, blogs, and articles will help you make connections, marketing your business in the process.

Meeting with both clients and potential customers also takes up a great portion of each day. Some meetings may require travel, while others can be done via online conferencing. Scheduling, answering emails and phone calls, and other administrative duties are equally as essential to the success of your business.

What are some skills and experiences that will help you build a successful market research firm?

Regardless of how large you envision your organization growing, this endeavor will require attention to detail and strong leadership. A balance between confidence and a willingness to learn and grow is also critical. Industry leaders indicate strong bargaining skills would also prove beneficial.

While a marketing degree is not required, it would prove beneficial. It is recommended that you have a background in this industry, with significant knowledge in marketing, research strategies and tools, and qualitative and quantitative analytics. Since surveys are the most common research tool, it is essential that you be well-versed in the art of questionnaire creation. This requires strong communication and writing skills and naturally connect to individuals of every demographic.

What is the growth potential for a market research firm?

This industry is recession-proof and there will always be a need. The key to achieving significant growth is in putting your own skills to work for you. Before embarking on this business venture, consider what your long-term business goals are. Where do you envision this going? Technology has made everyone an “expert” in marketing and research. With a winning combination of talent and the proper tools, you’ll have the option to remain small and selective on your clients, or grow to a global scale. Both are equally rewarding paths.

Not sure if a market research firm is right for you? Try our free Business Idea Generator and find your perfect idea.

TRUiC's YouTube Channel

For fun informative videos about starting a business visit the TRUiC YouTube Channel or subscribe to view later.

Take the Next Step

Find a business mentor.

One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.

Having a support network in place to turn to during tough times is a major factor of success for new business owners.

Learn from other business owners

Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.

Resources to Help Women in Business

There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:

If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.

What are some insider tips for jump starting a market research firm?

• While it does not have to be complex, an informative and professional website is critical. This is how you will showcase what sets you apart from the competition. If you are unable to capture your target audience, how will you do so for your clients?
• Make sure your website is mobile-friendly. Don’t use Flash Player.
• Develop connections with leaders in your targeted field(s). They could be your greatest resource. Online magazines, government resources, published articles/books, and online encyclopedias are also great resources.
• Become a member of associations such as the American Marketing Association  (AMA) and  Data & Marketing Association  (DMA).

How and when to build a team

When you build your team is up to your vision and the capital you have to work with. Thoroughly research each new candidate. Everything they do reflects back onto your firm.

Surround yourself from the beginning with a small team of mentors who you can trust. Pass that knowledge on, becoming a mentor for others just starting out in the industry.

Recognize your strengths and weaknesses and employ a team accordingly. Turn to legal and accounting professionals for their specialty, and hire an administrative staff that can handle clerical staff.

Useful Links

Industry opportunities.

• US Census Bureau
• Learn about more Online Business Ideas

Real World Examples

• Amplitude Research - Boca Raton, FL
• Info Surv Research - Atlanta, GA

Further Reading

• The Marketer's Guide To Surveying Users
• 12 Steps To Create An Effective Customer Survey
• Survey 101: A Simple Guide To Asking Effective Questions

Have a Question? Leave a Comment!

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MemberPress

The All-In-One WordPress Membership Plugin

How to Start an Online Research Business (In 5 Steps)

December 19, 2022 by Zeph Bluestone

Are you the go-to person when friends or family need information on a complex topic?

WHAT'S INSIDE

Do you have a knack for analyzing complex data or information and turning it into something regular people can understand?

Did you know you could be making a living doing what you love – that you could be turning all the info in that brain of yours into passive income ?

Yep, with WordPress and MemberPress , you can build an awesome online business around your research skills. And in this post, we’ll show you how!

If you’re ready to learn how to create an online research business all your own, keep reading… 

The Tools You’ll Need

Making money from research is easier than you might think. In fact, you’ll only need 2 tools – one that’s free and one that’s super affordable :

• WordPress – a free content management system (CMS) you can use to create a high-quality website. You’ll just need to pay for a domain name and web hosting .
• MemberPress – the world’s #1 monetization and membership plugin for WordPress. It basically enables you to turn your WordPress website into a money-making machine.

Using these two simple tools, you’ll have everything you need to start an online research business!

Now that you know what tools you’ll need, it’s time to create your business website. Let’s dive in!

Step 1: Get WordPress and Install MemberPress

First, you’ll need to find a hosting provider for your WordPress website. There are plenty of options available, and the right one will depend on your needs and budget.  

Bluehost is a great option for anyone looking to make a profit from their website. It’ll help you run a fast and secure site for your research business at a low price:

Plus, it offers 1-click WordPress installs , so you can start building your site right away. With Bluehost, you’ll also get a free domain for the first year .

Once you have your WordPress site up and running, you can download and install MemberPress :

As mentioned, this premium plugin enables you to monetize your site so people can sign up and access your research reports and services. 

Step 2: Add Your Research Content

Now that you have all the necessary tools, you can add your content to your website. This could be things like research reports , white papers , and even video compilations .  

For example, this content could be available through memberships that include access to the latest market research.

MemberPress-based research site BiteSize Bio is a perfect example.

This online research library is available to members working in the fields of biochemistry , molecular and cell biology , genomics , gene editing , and microscopy .

Now back to the nuts and bolts of Step 2: Add Your Research Content. ..

Adding reports to WordPress is simple. You’ll start by creating a new page on your website:

Then, you can add a title and report summary. To upload a document, first add a new block by clicking the plus sign (+).

Then search for “file”:

Then, just upload your complete research report to your page:

You’ll also want to add categories and tags for your page. These taxonomies will make it easier to restrict access to your content (and they’ll help boost your SEO).

When you’re done, hit Publish .

Step 3: Create a Membership

Now it’s time to create your first membership to allow users to access your research reports.

To start, go to your WordPress dashboard > MemberPress > Memberships > Add New :

You’ll land on a page where you can create a new membership. Start by adding a title and description .

Then, you can set the pricing , billing type , and payment interval (how often users are charged):

This video tutorial will give you step-by-step instructions on how to create a membership in MemberPress:

Remember, you can (and should!) create multiple memberships . They allow you to expand your potential audience by providing options that meet the needs and budgets of a variety of customers.

Also, MemberPress gives you fine-grained control over membership types to help you maximize your profits.

For example, you might create memberships that offer a scaled number of downloads at different prices. Something like this:

• Apprentice – Full library access + 1 download/mo. – $20/mo.
• Journeyman – Full library access + 5 downloads/mo. – $50/mo.
• Master – Full library access + unlimited downloads – $100/mo.

Step 4: Set Up Rules to Control Access

To protect your research materials from non-members, you’ll need to set up rules to restrict access.

Go to your WordPress dashboard and navigate to MemberPress > Rules > Add New :

This will take you to a page where you can create new rules for your content. Under the Content & Access section, you’ll find a dropdown menu where you can choose which content to protect.

For example, to protect a specific report, you’d select A Single Page , then enter the name of the page that contains that report:

As an alternative, you might want to protect content with certain tags and categories . For example, you might restrict access to posts with the tag “2022 reports”.

Under Access Conditions , you can select the membership that grants access to this protected content:

Click on Save Rule when you’re done. For further instructions on protecting content, you can watch this video tutorial:

The tutorial will show you how to set up more complex rules and restrict access for different memberships.

Step 5: Set Up Your Login and Registration Pages

Finally, you’ll need to set up your login and registration pages. This way, users will be able to sign up and access your content.

In your WordPress dashboard, go to MemberPress > Settings > Pages . Here, locate MemberPress Login Page and select Edit to configure the page:

This video will show you how to create a unique login page for your site:

Next, you’ll want to create a registration page for users. To do so, go to MemberPress > Settings > Fields :

Under Custom User Information Fields , you can create new fields for your registration form:

This video gives you more guidance on how to customize your registration page:

Remember to save your changes when you’re ready. And that’s it! You can now start selling your research services!

So Many Ways to Sell Your Stuff

For the tutorial above we used the “ research subscription ” model. That is, customers get access to your published library of research content for a monthly fee.

However, because MemberPress is a comprehensive monetization tool , it gives you virtually unlimited ways you can sell your products and services.

The coolest thing is that all these selling models can be combined and offered as purchase options on your pricing page.

Here are a few more good options for selling research…

Service Packages

The service package model is a real money-maker because it gives you a way to fund new research that you can then resell through your library.

For example, you could create 3 tiered service retainer packages : Bronze, Silver, and Gold. The packages might look something like this:

• Bronze – 3 research reports/mo. for $X/mo.
• Silver – 5 research reports/mo. for $X/mo.
• Gold – 8 research reports/mo. for $X/mo.

The research you complete (or, at the very least, elements of it) for your service package clients can then be added to your library and offered as part of your research subscription content.

Webinars and research go together like bread and butter. So running an online research business gives you the perfect forum for paid webinars .

Integrate your MemberPress site with a platform like Crowdcast , and you’ve got everything you need to host your way to a well established recurring revenue stream.

Online Courses

More and more online businesses and service providers are including online courses in the mix. Why? Because courses SELL !

And also because online courses can be an excellent source of passive income . You just…

• Create your content
• Set up your course
• Click go, and watch the revenue keep rolling in

If you’ve got a mind for research, you’ve also got the know-how to teach the basics of DIY.

Take Christina Jones as an example. Her photography business (built on MemberPress) is booming.

But because MemberPress includes a full-service learning management system (LMS) , Christina decided to add photography courses to her product offerings.

With course materials in the bag, she’s now got an additional passive income stream her business can rely on if and when contracts are down.

More MemberPress-Powered Examples

Here are a few more real-life examples of businesses using MemberPress to sell services and digital products online.

Launchblot is an IT and copywriting business. They’re a perfect example of how you can use MemberPress to power up service packages:

Through MemberPress, Toolshero offers personal and professional development services. They also have memberships granting access to their database of scientific articles, worksheets, and templates.

UPSC Mentor

UPSC Mentor uses MemberPress to offer exam prep services alongside access to its large library of study materials for the civil services exam.

An online research business can be an awesome way to monetize your mind . And WordPress + MemberPress makes it fast and easy to set up and get rolling.

To recap, here’s how you can start your own online research business:

• Set up a WordPress site with a reliable host like Bluehost .
• Install MemberPress.
• Add research content to your site.
• Create your memberships.
• Set up rules so only members can access your material.
• Configure your login and registration pages.

There you’ve got the basics. You can also consider adding service packages, webinars, and courses to the mix to expand your profit-making potential. The sky’s the limit!

Get MemberPress Today!

Start getting paid for your research skills

Do you have questions or thoughts about how to start a research business online? Let us know in the comments!

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How to Conduct Market Research for Startups

With 50% of new businesses failing within the first five years of operation, startups need to develop a deep understanding of their customer base quickly in order to thrive. Successful new business ventures strategically begin by gathering accurate and thorough information about their industry to identify the best path ahead. Conducting market research for startups is a key step toward meeting customer needs and strengthening marketing messaging.

Market research brings together important details about a business's customers, competition, and industry. The results serve as a tool in a startup’s business planning process as it evolves. Analyzing the findings can help determine the viability of a business concept and identify areas for adjustment to improve performance, profitability, and attract investors.

“Without market research, a startup is just making guesses. Listening to your prospective customers will help you align your product/service and marketing messaging to address their needs.” Dr. Elaine Young, Champlain College Online

As noted by Dr. Elaine Young , professor and program director of marketing communication at Champlain College Online, “Startups need market research so that they can gain insight into the behaviors and values of their target customers. Just because you think your startup idea is amazing, doesn't mean that consumers will. Without market research, a startup is just making guesses. Listening to your prospective customers will help you align your product/service and marketing messaging to address their needs.”

Table of Contents

What is market research?

Why is it valuable for startups, types of market research, methods of market research, how to do market research for startups, sample questions to ask customers.

Market research is defined as the process of collecting, analyzing, and interpreting a broad set of information about a specific market or industry. The research might focus on:

• A potential product or service for that market
• Existing and/or potential customers for the product or service
• The needs, purchase habits, characteristics, and location of your target market
• Competitors in your industry
• Trends within your market or industry as a whole

As a business strategy, market research enables companies to make actionable decisions according to data-based findings. These measurable statistics can be gathered through a variety of methods, which we will explore below.

Startups benefit from market research in multiple ways. With so much time, energy, and funds invested in a startup, taking steps to strengthen the concept and connection to your target audience is critical to survival and the bottom line. 

The market research process delivers value to startups by:

• Allowing you to test the ideas and concepts behind your product or service
• Enticing investors with data showing the projected profitability of your venture 
• Providing statistical evidence to potentially support your business concept or encourage you to adapt it to better meet the needs of your target market
• Helping to clarify exactly who your customers are
• Serving as evidence to investors of an entrepreneur’s commitment to improving a business based on current market conditions
• Increasing the odds of   success of your startup

“Market research can help founders focus their energy, enthusiasm, and resources toward a specific segment and the real target audience.”

Adrienne Wallace, Grand Valley State University

The American Marketing Association confirms that market research can directly increase your bottom line. And trusted market research findings can also speed up the process of getting investors on board with your startup venture.

“Startups can't begin with just a hope and a prayer,” notes Adrienne Wallace , associate professor at Grand Valley State University. “Market research can help founders focus their energy, enthusiasm, and resources toward a specific segment and the real target audience instead of making the age-old error of ‘everyone is the target’ because it simply can't be that for efforts to be fruitful.”

There are two types of market research used most in the business world today: primary and secondary. They can be used individually but are often combined to create a broader understanding of your target market.

Primary research

Primary research involves collecting data directly from your target market. This is often achieved through the use of surveys, interviews, and focus groups. The findings can provide a comprehensive understanding of your customer base’s needs and preferences.

Secondary research

Secondary research requires examining existing data collected by third parties. Examples of potential data sources include news media, industry reports, proprietary data from other companies, academic journals, or public databases. Although targeted data is not always available for your particular industry, secondary research enables you to gain insight and understanding about an industry overall.

Choosing a specific method of market research — either quantitative or qualitative — will determine the type of data collected in your research.

Quantitative research

Quantitative market research gathers large numerical datasets that can be used in statistical analysis. These results offer more accurate snapshots of industry trends and market challenges. Common methods of collecting quantitative research data are through surveys, questionnaires, and polls.

Qualitative research

Qualitative market research strives to identify the reasons behind customers’ buying habits, as well as their needs, wants, and overall customer satisfaction . These results can help clarify the “why” behind your target market’s behaviors and feelings. Focus groups, in-depth interviews, and online bulletin boards are typical methods for conducting qualitative market research.

Generally, quantitative market research is more commonly utilized than qualitative market research because it is more scientific, unbiased, and more easily plicated in future studies. In 2019, 61% of the money spent on market research in the United States went toward quantitative research, with only 12% spent on qualitative research.

Conducting market research is not a quick process, so it requires thoughtful planning. You may handle this research on your own or hire a third-party market research company to manage the process on your behalf. The steps below will guide you through developing a market research strategy that benefits your startup.

Step 1. Define your research purpose

The first step in market research for startups is to determine what questions you hope to answer through this research. From those questions, you can develop projected results that will help reveal the overall purpose of your research. Understanding the purpose from the beginning will be an asset in identifying the best approach to selecting subjects, composing questions, and testing product designs.

Examples of market research purpose include:

• Confirming consumers’ biggest pain point and whether your product meets their needs
• Tracking and predicting relevant industry trends
• Determining consumer spending capacity for a product/service
• Gauging the market infiltration of your competitors

Step 2. Study your target market and competitors closely

It’s important to take time to study existing information about your target market, your competitors, and your target demographic. Growing your knowledge base about all of these factors in advance will strengthen the relevancy of your research.

When working on demographics, a buyer persona template can be a useful tool to help segment the consumer audience into smaller groups for better targeting. Understanding each group’s behaviors and motivation can lead to research findings that resonate deeply with your customer base.

Step 3. Choose the right type and method for your needs

The best type of market research for your business will depend on the purpose you aim to achieve. If your goal is a broad-scope industry view, secondary research examining existing data may provide you with all the information you need. But if your strategy is to clarify specific details about your customer base, you will need to collect new data through primary research. 

The ideal method for data collection also depends on the end goal. Quantitative research methods such as surveys create data useful in making market predictions. Qualitative research methods like focus groups and in-depth interviews offer more personal and subjective responses from participants. Such responses are valuable when seeking direct consumer insight on your product or service and on brand awareness.

Step 4. Recruit appropriate research subjects

If you are pursuing primary research, the subjects involved in your study should be capable of providing insights that are directly relevant and valuable to your market research goals. Recruitment methods can vary from social media posts to hiring third-party market research firms and incentivizing participation.

Seek out existing customers, former customers, and potential customers to create a full spectrum view of your market and product. Other potential sources for research participants include:

• Recent customers
• Customers who did not complete their purchase
• Word of mouth among both personal and professional networks 

Step 5. Conduct your research

Execute your market research plan based on the method you identified in Step 3. Appoint someone not deeply connected with the project planning as the point person for interviews or focus groups in an effort to reduce potential bias. When creating surveys, strive to incorporate neutral (non-leading) language as a way to craft unbiased research questions.

Christina Inge , an instructor and curriculum designer at Northeastern University, suggests an effective research technique called customer discovery. “It requires asking customers what their needs are,” she says, “rather than showing them your product or service and asking for their reactions. This can help you get to the heart of what your customers need, leading to better product market fit, faster.”

Step 6. Analyze your results

Once you’ve collected and organized all of your data, analyze it for relevant trends and patterns. Any qualitative data, such as feedback from focus groups or interviews, can be interpreted quantitatively by noting response ratios amongst the participants. Examine your findings for insights that offer actionable next steps.

One famous example of a startup that pivoted toward success as a result of closely analyzing the market research on their target market is Tune In Hook Up. As an online video dating site that wasn’t seeing much traffic, their research revealed that users struggled to share videos easily with one another. Based on their findings, they decided to shift away from romance and focus on the videos, renaming themselves YouTube.

Step 7. Create an actionable report from your findings

Gather your findings into a report that outlines the recommended actions necessary to address the market research results. Whether the data provides positive or negative insights, you should always come away with actionable steps and suggestions for the next stage of your startup.

Find additional tips and a free report template in HubSpot’s’ How To Do Market Research: A Guide and Template .

Drafting market research questions for startups is not an exact science because cookie-cutter surveys and interview questions will not work. Every product, service, and industry has unique features that require tailored language in each research question. 

Below is a sampling of the type of questions you may want to consider: 

• What do you like most about our new product or service?
• What do you wish our product or service did that it does not currently do?
• What do you lose sleep over at night?
• What price would you consider so low that you’d question this product’s overall quality?
• Which of these companies have you purchased this product from in the past six months? (list of competitors)

Market research is a booming industry around the globe, but nowhere more so than in the United States. The U.S. is the leading country for market research services , with the industry bringing in $18.75 billion in 2020, more than six times the industry-related revenue of any other country in the world. It’s no surprise, considering how quality market research can directly impact a company’s bottom line and growth. Free kits for growth marketing can help you get moving on the road to success through market research for startups.

Your go-to destination for education, inspiration, and resources for startup founders.

Startup Resources

6 Steps to Managing Remote Teams: A Guide for Startups

What Is an Incubator? A Complete Guide - HubSpot for Startups

28 Startup Trends to Watch in 2023 - HubSpot for Startups

What Is a Business Accelerator? Everything You Need To Know - HubSpot for Startups

How to do market research for a startup (with examples)

Did you step out of the shower this morning with a business idea to beat them all? Did you read back through late-night notes, and they finally made sense?

If you’ve come up with an amazing idea for a product or service, congratulations! This could be the start of a great adventure, and every adventure needs to start somewhere.

To set a business set up for success, don’t create that website or launch that prototype just yet .

Take the time for proper market research . We know it might not seem as exciting as elevator pitches and guerilla marketing campaigns. Still, it’s just as important for your business strategy and will be a firm contributor to your startup’s success.

To discover if your big shower idea is viable, you need to conduct market research .

Before understanding which market research method is best for you, let’s get on the same page. 

What we’ll cover in this article:

What is market research.

• What good market research looks like, and what it can deliver
• Why market research for startups is so valuable 
• How to conduct market research for startups in a way that’ll give you actionable data
• Some examples of how market research changed the course for startups that went on to become successful businesses

Market research is about analysing the market you are in or are about to enter. It involves closely examining market trends, industry trends, market dynamics, your target audience, and other potential customers. Market research includes competitor analysis to see how similar businesses are selling and identify any indirect competitors you can learn from.

Market research findings will influence and guide your go-to-market strategies, and help you secure funding — they aren’t just for good-looking reports! Investors will want to see more than general market size figures. If you can show them proprietary data you’ve gathered from your target consumers (also known as zero-party data ), it will give them the deeper layer of insight they’re looking for.

Market research has been around for decades , and companies have tweaked and updated it over time, but the term has always been used rather loosely. It shouldn’t be conducted to simply confirm that your idea is good. 

When you conduct market research looking to affirm a hypothesis, you become susceptible to market research bias. You can end up walking away with specific data sets that affirm your theory, rather than actionable data that can dictate the direction your theory needs to take—which may be the opposite direction!

Why is market research important for entrepreneurs and startups?

It’s easy to be blinded by the potential of a big startup idea. Your product or service might seem great on paper—or even as a prototype—but without proper market research services , it could flop when you go to market.

Startup founders need to get as much detailed information on their potential market as soon as possible. Here are some reasons why:

Market research will help you test your ideas

There are several things you can and should find out about your product through research. The first question to answer: is there sufficient demand for your product?

It’s not true that if you make something and promote it hard enough, people will eventually start buying it. 

It could be that the product you have in mind is not for the target group you would expect or that the timing is off. For example, selling wired headphones now that most cell phones don’t even have a headphone jack would not be the perfect timing to secure demand. This works both ways; your product could be behind the times or ahead of them—as you’ll see later in our examples!

That doesn’t mean you can’t produce anything that hasn’t been done before – you simply have to do it differently and better. When Slack entered the market, there were communication tools for businesses already on the market. They just did it better. 

Aside from understanding what your core product and its features need to look like, you’ll also gather important information on pricing, payment plans, marketing strategies, product messaging, and more. There are tons of companies to help you with your research—here are the top market research companies in the US to get you started.

Conducting market research is important for attracting investors

If you want to impress potential investors, you’ll need more than a spicy prototype to whet their appetite. The main thing that investors care about is how likely they are to make money out of this product in the long run. 

For that, they’ll need to see research that backs up your claims and proves there’s a viable market for you to enter and meet demand. 

 This research makes the decision-making process to invest that much easier. 

Investors will need to conduct a due diligence check before they part with their cash. You’ll have a large chunk of the data they need embedded in your market research—making this investment process run that much smoother for every stakeholder. 

Discover how market research can help your brand: from reaching the right customers to testing creative assets

It makes startups less likely to fail 

Let’s look at why startups fail.

The top answers for this underline the importance of market research once again. At number 1 on the list of reasons why startups fail: ‘ no market need. ’ In 42% of cases , there’s simply not sufficient demand for a shower thought—no matter how innovative it is.

Number 3 on that same list is being beaten by the competition. Ignoring your competitors accounts for 20% of startup failure !

Of course, market research can’t predict the future entirely. However, when done properly, it’ll give your small business the tools needed to get a head start in the sink-or-swim world of startups.

Choose the right tools for market research

Attest is here to give you all the market insights you need, with tailored demographic filters and ready-to-go survey templates, you can measure everything from brand awareness to product demand in hours, not days or weeks.

How to do market research for a startup: 6 steps

There are plenty of tools, resources, and best practices to conduct solid market research, but it can be difficult to pick the right direction to head in. Worry not! Here are six steps to get the most out of your market research.

1. Find the right market research methods for your needs

Before diving into your market, target audience, and competitors, it’s good to freshen up on the types of market research methods there are: primary research and secondary research.

Primary market research

The internet only knows so much. You’ll have to get some data straight from the source: your target audience. That’s where primary data enters the picture. This is research you do yourself, gathering information directly from the people you want to use your product or service.

A great way to do this is by using online surveys or working with focus groups to get a comprehensive understanding of what your future buyers and loyal customers need.

Secondary research

If you use existing research and data, you’re doing secondary market research and finding secondary data. This can be great for exploring market dynamics and spotting trends. You can find more tools to help you conduct this research method in our blog: 12 great market research tools .

Secondary data has its place, but because it’s external research that hasn’t been conducted with your business in mind, you’ll need to be aware of citation bias.

What’s citation bias? Citation bias occurs when your data uses the results of other research. The results of which may have been looking to prove something slightly different to what you’re looking to prove. Plus, if the research is not conducted by you, then the data may already have fallen victim to one or more other types of survey bias you haven’t been able to account for.

2. Find out what you need to focus on

You might have a general sense of what you want to learn from your market research: whether or not you should launch your startup idea. However, you’ll need to specify some research goals to get actionable data.

After your first exploratory primary research or secondary research, you’ll be able to identify where you have knowledge gaps. What isn’t clear about the market? What assumptions about your potential customers need to be verified?

You can split up your market research goals into different categories—helping you better assign the right team to the right tasks.

For example, let your best marketers and sales reps help you in researching buyer behaviours. Let your finance team guide payment habits and payment methods for your market research. 

This market research template can help you better guide your market research.

3. Identify your ideal market

In any market research, you’ll have to look at three important factors:

• the target market as a whole
• your competitors
• your potential customers

We’ll start with the market as a whole because it’ll help you get more specific data along the way.

First, figuring out which market and industry niche you fall into is crucial. It may seem obvious, but if you put some thought into it, you might find you’d perform better in a different market.

Aim for a market where you fit in, where there’s a large enough product demand , and where you can make a difference.

Here’s how to find out what’s going on in a market:

Find your market, fast

Don’t leave the success of your startup to chance – our market research software is here to help you navigate the market and make the right decisions for your brand.

Talk to industry experts

Talk to experts who’ve been working in that target market for years and ask them about what they think the future will look like. These might just be speculations, but it’s better to hear them and address them than pretend they don’t exist.

You can also pay attention to what’s happening in online communities revolving around your product idea. For example, places like Facebook Groups, Reddit, Twitter, Twitch, ProductHunt, G2, Capterra, and other platforms can be a great eye opener about your potential future customers and market. 

Read the latest trend reports

Another great way to get a clear view of trends in your market is to keep track of relevant blogs and news. There are plenty of target market reports and public market data available to find out the latest trends and where the market is going, like G2, Deloitte, Gartner, McKinsey, and more—make the most of these datasets.

Use target market research tools

With Google Alerts and Trends, you always have comprehensive, up-to-date data on trends and can spot changes in popularity for certain brands and products by focusing on specific keywords. 

Find out what our favourite tools are for analysing your target market in our blog: eight smart market analysis tools .

4. Shake hands with your target audience

Get ready to talk to real people.

To understand your target market, you need to look at more than numbers. It’s great to see some people spending a lot on certain products, but you’ll need to learn why they do that. Get the powerful insights you need to create a strong positioning and ensure your marketing efforts hit the spot.

This is where primary research is most important. You can choose in-depth interviews, online surveys, focus groups, or a mix of those things, depending on what answers you’re looking for. 

Lost for words? We’ll give you some inspiration in this list of 20 essential questions you should ask your (future) customers .

Consumer profiling for startups

We recommend you go beyond the standard consumer profiling demographics and build buyer personas with layers. By adding behavioural and attitudinal data to the mix, you will create much more effective marketing campaigns and digital marketing strategies that land with the people most likely to use your product.

We’ve got a guide full of tips to get started with consumer profiling as a startup and a success story of one startup that discovered their most important potential customers weren’t who they thought they were .

5. Analyse your key competitors—direct and indirect

Next up: your competition. You don’t need to infiltrate their business to get to know them inside-out, but it sure helps to look at their strategy, messaging, tactics, and, most  importantly, what your target audience thinks of them.

Your target market probably knows who your competitors are better than anyone else. Find out what products they consider as alternatives to yours, and you may find out you have significantly more competition than you initially thought.

Take things a step further and look beyond your obvious direct competitors; focus on other companies that could be catching up with you in a few years or are in your niche but currently offering something else. Chances are you’re not the only one working on a new business idea each morning in the shower!

Rest assured, this doesn’t have to be guesswork—here are our 14 favourite competitor tracking tools to help you get started.

6. Be prepared to make big, but well-informed decisions

Once your market research is done, and all questions answered, it’s time to create a plan of action. Hopefully, you found out that your product or service is a lucrative idea and that there’s a real market for it—even if you need to tweak your idea a bit.

Market research will be the guide for any future business decision you take. How you approach product development, branding, and marketing, will all depend on the results of this research. 

3 Examples of market research for startups

The success of any startup heavily depends on whether they’re willing to listen to their target market or not.

Let’s look at real-life examples that paved the way for tons of startups and set an example in market research best practices to transform a business in its earliest stages of growth.

Example 1: the board game maker that won big with market research

Before coming across Attest, Big Potato Games was cobbling together insights from social media and Google Analytics—not ideal when you want a comprehensive picture of your market.

The team needed to establish exactly who their customers were, and learn the behaviours and attitudes of their potential customers to more effectively target the right people in the right places with the right messaging.

Using market research to explore consumers’ attitudes towards board games and what motivates them to play helped them define key customer personas. The research uncovered seven key customer types, all the way from casual, occasional players to hardcore gamers.

An example of what they uncovered through market research was that mums view board games as a way of getting the family together, while young adults saw it more as a way to socialise with friends.

They also found out the size and importance of each customer segment. While the hardcore gamers are a super important and dedicated segment, it’s still quite a small buyer group. It turned out that the mums group was a much bigger purchase decision-maker and demographic to go for.

Market research allowed them to better understand the segments where they sought to build awareness, who was using their product, and who was actually buying it.

Example 2: admit when you can’t beat the competition

Ever heard of Odeo? It probably doesn’t ring a bell. It was created by Evan Williams and Biz Stone in 2005 as a platform for podcasts. They placed their bets on podcasts. However, as we now know, their timing was off.

Instead of sitting around and waiting for podcasts to hit, they re-examined the market. They looked at user adoption rates, technology, and customer acquisition costs. At the time, Apple was their main competitor, and they knew they wouldn’t win. So, based on their market research, they pivoted.

They looked at other popular platforms where content was shared, such as Facebook. Their market research looked at what people didn’t like about those platforms. What tools were they missing? What annoyed people?

Not long after, Twitter was born. The Facebook News Feed was too cluttered for many people, so they cleaned things up. As we know today, it was a huge success.

Example 3: The dating site that turned into a video platform

Over the years, a lot of dating sites and apps have come and gone. Tune In Hook Up is one of those that has gone rather quickly. Its creators saw that the website, which was a video dating site, didn’t get enough traffic to make the right matches.

They had this technology that made posting videos online easier than ever, but not enough people were jumping on it.

They did market research and found it was hard to find specific videos online, and websites that did offer them didn’t work very well. Sharing videos with others was a pain for users.

Based on their research, they broke up with the online dating market and focused on the video part of their business that already existed. They changed the name, the platform, and their lives. You might have heard of it. They called it: YouTube.

Market research made simple

The right market insights can make or break your business, which is why market research is one of the most important things you can invest in. Don’t leave your market research up to chance – choose the best tools that set your startup on the path to success and match it with talent that knows what to go for. Now get back in the shower; you’ve got ideas to create!

Make market research easy with Attest

With our cutting-edge tech and on-demand research expertise, your startup can rest easy. Measure brand awareness and gain vital insights from our built-in audience of 110+ million people.

Market Research FAQs

To do market research for a startup, you should follow these six steps: 1. Pick the right market research methods 2. Identify what you need to know 3. Find your ideal market 4. Get to know your target audience 5. Analyse your key competitors – direct and indirect 6. Be prepared to make big, but well-informed decisions Once you complete them, you’ll have all the information you need to create a business strategy that will lead to your startup’s success.

The best form of market research you can do for a new business is primary market research. This is gathering information directly from the people you want to use your product or service by using online surveys or working with focus groups.

The main focus of the market research for small startup businesses is to validate their business idea. It doesn’t matter how good your idea or prototype looks; if there isn’t a market for it, no marketing budget will suffice.  By researching what the market thinks about your idea and what needs they have, you’ll know if your product will have demand or not. 

Customer Research Lead 

Nick joined Attest in 2021, with more than 10 years' experience in market research and consumer insights on both agency and brand sides. As part of the Customer Research Team team, Nick takes a hands-on role supporting customers uncover insights and opportunities for growth.

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How to Research a Company - Top 9 Tips for 2024

There are a lot of benefits to researching potential employers.

For one, you’re better prepared for the interview. When the interviewer asks if you have any questions about the role or company , you are able to give more educated answers.

Moreover, it becomes much easier to spot red flags about potential employers. If you find that every other review about the company you’re applying for is negative, chances are, they’re not the best employer in the world.  

That said, how, exactly do you research a company?

Well, we’re about to teach you just that, starting with:

How to Research a Company - Top 9 Tips

Tip#1. start with the employer’s website.

What’s a better place to start researching a potential employer than their “front door?”

Start by visiting the company’s website and looking for information on:

• What product or service does the company offer? Is it something you personally find interesting?
• How big is the company? Is it a young startup, a multi-national corporation, or something in-between?
• What’s the company culture like? Is the work environment more casual or formal?
• Is there a dress code?
• Does the company have prospective growth opportunities outlined on its website? 

In your job search , you can use this information in 2 main ways.

For one, you can decide if a company is a good fit for you culture-wise. If you’re a young professional who hates wearing a suit and loves having a flexible schedule, chances are, Goldman Sachs is NOT your ideal employer. If the company you’re looking into has a culture that doesn’t represent your values, you might want to consider applying elsewhere. 

Alternatively, this information can help you ace the interview . It’s almost guaranteed that the interviewer is going to ask you questions about how familiar you are with their brand.

The more you know about the company, the more invested you’ll appear and the more likely it is that the interviewer will pick you over the other candidates.

Tip #2. Find Company Employees via LinkedIn

You can use LinkedIn to find who’s currently working at the company you’re researching.

For example, if you look up “People” under “Apple” on LinkedIn, you’ll get a view of their employees worldwide:

From there, you can filter by specific location (E.g. Austin, Texas), and then filter by role (E.g. Marketing).

So - how can you use this information?

For one, you can connect with someone in the department you’d like to work in and ask them questions about the company, culture, department, or the role you’re applying for.

The key here, though, is not to be too pushy. The people you contact don’t owe you an answer or a reply. However, if you’re being courteous, there’s a very good chance you’re actually going to get one.

Best case scenario, if they like your questions and initiative, they might even refer you to the team lead or department head personally!

Tip #3. Look Up News About the Employer  

Look up the company’s name and hit “News” to see what the company has been up to recently.

You can also find such information on the News or Blog page on the employer’s website.

There are a lot of ways you can use such information, some of which include:

• You can dodge companies that have had recent scandals.
• You can impress the interviewer with how up-to-date you are with the employer.
• You can learn more about recent company development. For example, what products they’re working on, which countries they’re expanding to, etc.

Tip #4. Look Up Company Reviews on Glassdoor

Glassdoor is an employer review website where you can read information about prospective employers.

You can use it to find reviews about the company and its CEO. For example:

Moreover, you can check out specifics like:

• Salary averages for any given position.
• Reviews of their interview process.
• Reviews of the benefits offered by the company

You can use such information to find an employer you’re going to love, ask for the right salary, or dodge companies with high turnover rates and negative reviews.

Tip #5. Tap Into Your Network

Using LinkedIn, you can see if anyone in your network is working at the company you’re researching.

Then, you can just reach out to them and directly ask questions about the role/employer.

If you’re close with the person you’re reaching out to (or have had professional relations in the past), you can even ask them for a referral directly!

Tip #6. Research Company’s Social Media Pages

Go through the company’s social media profiles (Facebook, Twitter, Instagram, and LinkedIn) to get a grasp of how they communicate with their target demographics.

Follow them to get updates whenever they post anything. You can even like and comment on their posts which can help you fall into their radar, especially if they’re a small team.

Tip #7. Look Up Posts on Social Media 

You can look up what people are discussing about the company on social media to get a more unbiased view of the organization.

For example, you could Google something like this: site:reddit.com "apple” "job" to get a complete list of all threads on Reddit where people are discussing Apple as an employer:

Tip #8. Get an Edge on the Interview Process With Glassdoor

Using Glassdoor Interview Q&A Section , you can find the exact questions employers ask their interviewees. For example:

You can use this to better prepare for the upcoming interview, as well as get a general idea of what kind of questions you’re going to be asked.

Tip #9. Learn About Company Salary Averages

You can use a tool like 

 to find salary averages for the company you’re applying for based on department or role:

You can then take advantage of this information to ask for the right sum and avoid getting low-balled.

Why Research Employers? Top 4 Reasons

At this point, the reason for researching employers should be pretty self-explanatory, but we thought we’d cover the topic just in case!

The 4 main reasons for researching a company are:

• Get an edge over the interview. Employers love it when you’re knowledgeable about their company. After all, they want to hire people who want to work there specifically, not the ones that are just randomly applying everywhere. The more company knowledge you demonstrate during the interview, the more likely it is that you’ll get the job.
• Uncover red flags (and avoid bad employers). You can find a lot of skeletons in company closets if you just do some research online. This can actually help you save a ton of time and effort from applying (or getting hired) at the wrong place.
• Find the right job for you. There are a lot of companies out there - not all of them are the right fit for you. By researching companies online, you’ll be able to tell right from wrong more easily.
• Negotiate a better salary. You can find information on average salaries at a specific company online, so you have a better idea of what kind of range you can ask for.

Key Takeaways

And that just about sums up all you need to know about researching a company online! Before you go, though, let’s do a quick recap of what we learned:

• When researching an employer, start by looking at their website and social media pages to learn more about their culture and product/service.
• Look up news about the company to avoid employers with recent scandals.
• Find company reviews on Glassdoor and uncover potential employer red flags.
• Use LinkedIn to find people who work at the company you’re applying for and reach out to ask questions about the job or the employer.
• Use all the information you learn from researching the company to get an edge over the interview and negotiate a better salary.

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A Beginner's Guide to Starting the Research Process

When you have to write a thesis or dissertation , it can be hard to know where to begin, but there are some clear steps you can follow.

The research process often begins with a very broad idea for a topic you’d like to know more about. You do some preliminary research to identify a  problem . After refining your research questions , you can lay out the foundations of your research design , leading to a proposal that outlines your ideas and plans.

This article takes you through the first steps of the research process, helping you narrow down your ideas and build up a strong foundation for your research project.

Table of contents

Step 1: choose your topic, step 2: identify a problem, step 3: formulate research questions, step 4: create a research design, step 5: write a research proposal, other interesting articles.

First you have to come up with some ideas. Your thesis or dissertation topic can start out very broad. Think about the general area or field you’re interested in—maybe you already have specific research interests based on classes you’ve taken, or maybe you had to consider your topic when applying to graduate school and writing a statement of purpose .

Even if you already have a good sense of your topic, you’ll need to read widely to build background knowledge and begin narrowing down your ideas. Conduct an initial literature review to begin gathering relevant sources. As you read, take notes and try to identify problems, questions, debates, contradictions and gaps. Your aim is to narrow down from a broad area of interest to a specific niche.

Make sure to consider the practicalities: the requirements of your programme, the amount of time you have to complete the research, and how difficult it will be to access sources and data on the topic. Before moving onto the next stage, it’s a good idea to discuss the topic with your thesis supervisor.

>>Read more about narrowing down a research topic

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So you’ve settled on a topic and found a niche—but what exactly will your research investigate, and why does it matter? To give your project focus and purpose, you have to define a research problem .

The problem might be a practical issue—for example, a process or practice that isn’t working well, an area of concern in an organization’s performance, or a difficulty faced by a specific group of people in society.

Alternatively, you might choose to investigate a theoretical problem—for example, an underexplored phenomenon or relationship, a contradiction between different models or theories, or an unresolved debate among scholars.

To put the problem in context and set your objectives, you can write a problem statement . This describes who the problem affects, why research is needed, and how your research project will contribute to solving it.

>>Read more about defining a research problem

Next, based on the problem statement, you need to write one or more research questions . These target exactly what you want to find out. They might focus on describing, comparing, evaluating, or explaining the research problem.

A strong research question should be specific enough that you can answer it thoroughly using appropriate qualitative or quantitative research methods. It should also be complex enough to require in-depth investigation, analysis, and argument. Questions that can be answered with “yes/no” or with easily available facts are not complex enough for a thesis or dissertation.

In some types of research, at this stage you might also have to develop a conceptual framework and testable hypotheses .

>>See research question examples

The research design is a practical framework for answering your research questions. It involves making decisions about the type of data you need, the methods you’ll use to collect and analyze it, and the location and timescale of your research.

There are often many possible paths you can take to answering your questions. The decisions you make will partly be based on your priorities. For example, do you want to determine causes and effects, draw generalizable conclusions, or understand the details of a specific context?

You need to decide whether you will use primary or secondary data and qualitative or quantitative methods . You also need to determine the specific tools, procedures, and materials you’ll use to collect and analyze your data, as well as your criteria for selecting participants or sources.

>>Read more about creating a research design

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Finally, after completing these steps, you are ready to complete a research proposal . The proposal outlines the context, relevance, purpose, and plan of your research.

As well as outlining the background, problem statement, and research questions, the proposal should also include a literature review that shows how your project will fit into existing work on the topic. The research design section describes your approach and explains exactly what you will do.

You might have to get the proposal approved by your supervisor before you get started, and it will guide the process of writing your thesis or dissertation.

>>Read more about writing a research proposal

If you want to know more about the research process , methodology , research bias , or statistics , make sure to check out some of our other articles with explanations and examples.

Methodology

• Sampling methods
• Simple random sampling
• Stratified sampling
• Cluster sampling
• Likert scales
• Reproducibility

 Statistics

• Null hypothesis
• Statistical power
• Probability distribution
• Effect size
• Poisson distribution

Research bias

• Optimism bias
• Cognitive bias
• Implicit bias
• Hawthorne effect
• Anchoring bias
• Explicit bias

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• Specialized Manufacturing
• Marine & Life Sciences
• Creative Arts & Design
• Tech and Innovation
• Sustainable Living
• Arts & Culture
• Non-Profits
• Transportation
• Media Outlets
• Regional Health Care
• Inclusivity
• Demographics
• Tax Structure
• Real Estate
• Cost of Living
• Workforce Factors

St. Pete hosts a hotbed of opportunities on an individual and large-scale level. Innovative startups are taking note of the city’s creative culture and ability to access top companies that call St. Pete home including Jabil , HSN , and Raymond James.

Located to the south of downtown, the St. Pete Innovation District anchors Florida’s High Tech Corridor and is home to one of the largest concentrations of world-class research organizations in the country. Home to higher education, healthcare, business incubation, media institutions and marine science centers, there is a highly connected community focused on innovation in St. Pete.

Innovation thrives here.

St. Pete supports new ventures through a strong community. Startup incubators, coworking spaces, and business meetups create a collaborative framework that sets the tone for a forward-thinking community. St. Pete’s Greenhouse provides startups a launchpad for high growth with an entrepreneurial center and small business consulting support services.

In 2019, St. Pete became one of U.S. Ignite's Smart Gigabit Cities, providing entrepreneurs and local businesses the very best tools to facilitate growth.

Connect with Beau to learn more.

Connect with JP to learn more.

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