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. 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.
Table of Content
- How Market Research Companies Make Money
- 2. Conduct Market Research and Feasibility Studies
- 3. Decide Which Niche to Concentrate On
- 4. Know Your Major Competitors in the Industry
- 5. Decide Whether to Buy a Franchise or Start from Scratch
- 9. Discuss with an Agent to Know the Best Insurance Policies for You
- 10. Protect your Intellectual Property With Trademark, Copyrights, Patents
- 11. Get the Necessary Professional Certification
- 12. Get the Necessary Legal Documents You Need to Operate
- 13. Hire Employees for your Technical and Manpower Needs
- 14. Write a Marketing Plan Packed with ideas & Strategies
- 15. Develop Iron-clad Competitive Strategies to Help You Win
- 16. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
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.
16 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
- IMS Health
- Decision Analyst
- International Data Corporation
- Off Madison Ave
- A. Walker Research Solutions
- Rockbridge Associates, Inc.
- SIS International Research
- D. Power and Associates
- Medimix International
- NPD Group
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
- Super Eye
- USA Fact
- Certifix Live Scan
- Data Quest
- 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…
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.
If your research objective calls for more detailed data on a specific topic, you’ll be conducting quantitative descriptive 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.
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.
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.