Question

Topic: Student Questions

Starting A Marketing Research Company

Posted by Anonymous on 8/7/2013 at 1:43 AM ET 500 Points
I'm a 29 year old Business Administration student with a Concentration in International Business. I'm interested in starting a market research company. The ever changing atmosphere appears to fit my dynamics.

Main Questions: What are ideas and concepts to consider for a start-up market research company? Who do I need to speak to (lawyers, accountants, business development services, etc)

I am a former service member (you're welcome.) I do have leadership experience. That's not the concern here. The concern here pertains to ideas to take into consideration.

Beyond college I know nothing about the marketing field. I do read marketing research books, and MarketingProfs has been a tremendous insight. Thought I would ask here on the forum. Any additional insight will be appreciated.

Thank you ahead of time.
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  • Posted by Chris Blackman on 8/7/2013 at 2:00 AM Member
    Wow. Welcome back into civilian life. You're obviously very brave, venturing into a tightly-contested field like this virtually unarmed.

    The weapons you'll need to succeed in the battle ahead include a clear competitive difference or marketing edge, which means some tangible benefit to a client that is relatively unique to your organisation and cannot be readily acquired by the enemy (competitors).

    You'll need a targeted pool of prospects to talk with. You'll need to know research techniques, to be able to answer questions like:

    "Why are our sales down"?
    "WIll this new product succeed"?
    "If we make this product, what's the price range customers will pay for it"?
    "What color will sell best"?
    "Who should we be targeting with our new service"?
    "How can we get people to like us more and spend more on each visit"?

    You will need access to a pool of part-time workers for telephone and face-to-face research projects.

    You'll need skills in planning research campaigns, costing them, resourcing them, executing and managing in the field, report writing and high-level client liaison skills.

    And I can't help feeling you might need some basic training in market research at least. Why not go work with a research firm for a while, learn the ropes, and figure out if you would really like it?
  • Posted by Moriarty on 8/7/2013 at 2:39 AM Accepted
    Right - you have leadership experience. Now in business leadership takes on a very different quality. There's no blind obedience and there's no duty. Whilst a businessman has a duty to themselves and their biz - they do not have a duty to anybody else.

    What's more when you're seen as the enemy - your job just got a lot harder. Not only that, your poor businessman sees hordes of you. They aren't going to come quietly, okay?

    So play it cool. Take a sideways look and work out why someone would trust you.

    Because you are dealing with the side of business where getting personal is powerful. It doesn't mean you have to - and it doesn't mean you have to be a Hollywood star. It means you have to have the courage to be you. That's when you can be genuine, that's when your conversation with a businessman is either super-comforting or totally out of order.

    I know this because I do it. Despite being the newbie, I've got the second highest answering rate after Gary Bloomer and I'm closing fast - that is to say of those questions asked, I have the most acceptances. Yet at the same time I'm on the moderators watchlist because I upset some poor scamp who ran to mummy crying. I can't be all things to all people and still be an effective consultant - and nor can you. Or at least, you don't have to do this, but the effectiveness of your marketing will be limited and expensive - and your advice won't be taken seriously.

    As to learning the ropes, Drayton Bird is your man. He ran a UK based marketing firm and was bought out by David Ogilvy. His ideas will help you ground yourself in a dynamic and fluid world.

    Because believe me, that's all you'll have.

    The legal side of things isn't something I can comment on fully - my expertise is in UK/NL and German legal systems and their interaction with other European legal systems - not the US. However from a general point of view you need to be very clear about how you write up your contract. You'll need to add clauses for businesses outside of the US too, naming US law as the basis of the contract (as I state in mine - which is a translation of the Algemene Voorwaarden).

    Now as to your skills, remember that anybody can read a book. Any consultant that really stands out from the crowd does so on the basis of what they understand, not on what they know. It's the "how" not the "what". Which sort of comes full circle to the businessman trusting you - because you have a distinct character, there's something more there to trust than just a long line of letters from prestigious universities. The latter works, but it's expensive (you know that already!). Your personality will add real zest to the way you appear to your potential customers.

    As to other questions, a good place to start is your local chamber of commerce. There's a lot of stuff they can help with and there are gatherings of local businessmen too that can get your name known.

    Does this help any? I know it's not the line you were looking for ... it's the line I've taken and I don't have any qualifications. You can read my answer again and re-consider your judgment now ;-)
  • Posted by Jay Hamilton-Roth on 8/7/2013 at 9:00 AM Member
    I'd start with a series of informational interviews with two groups of people: prospective clients and prospective competition (but perhaps in a different region). Understand who would hire your services, when, how they determine value/quality, their lifetime value, etc. Understand how the competition position itself, their fees, their proven worth, messaging, etc. This will tell you about the landscape, and give you an idea of where the "sweet spot" might be. Then, find yourself a mentor (either books or people) and dig in by doing.
  • Posted by modza on 8/7/2013 at 2:51 PM Accepted
    Your questions to this group appear to fall into two groups: 1) how to start a (any) business; and 2) what should distinguish your business from other market research businesses. I don't deny that you or anyone can create a new business without having any business experience or knowledge of the industry or profession and its prospective customers. But you're making it tougher on yourself -- and on your prospects for success -- by starting with two strikes against you. (And there is no third pitch in this game.) I did something similar myself, and although it took twice as long and eight times as much money as I anticipated, it worked out in the end, and I had a blast.

    The only reason you give for choosing market research is that you believe the fact that its "ever changing atmosphere appears to fit my dynamics." That's a pretty weak connection, and there really isn't an area of business that isn't changing rapidly these days. So if that's the only reason you have for picking market research, maybe you should step back and see if you have any deeper connection to other kinds of businesses. In other words, take advantage of any edge you already have, rather starting yourself in a deeper hole.

    I'll use (part of) my story as an example. I had always been curious about the frontiers of science but didn't pursue it. My obvious skill was writing, so I went into book publishing because I thought it had something to do with literature. I ended up in sales and marketing jobs, which I learned I enjoyed and was good at. When I was ready, I started a newsletter about science (specifically "technology transfer.") I didn't know anything about newsletters (subscription business model), or really anything about my topic, but in trying to learn about it, I discovered that no one else did either, so my business was (turned out to be) organized around me satisfying my curiosity by learning my topic, and conveying what I learned to others.

    The lesson is that you may find your niche through twists and unexpected turns, but if you can start with one or two things you care about and ideally know you're good at, then your path will be not necessarily shorter, but perhaps easier and more enjoyable along the way.

    About market research: I've done some of that too, and I can tell you the two biggest trends: People are abandoning landlines, and there's no directory of cellphone numbers. Online surveys have proliferated, and the response rate is dropping. How are you going to reach people, maintaining a statistically valid sample of the population you're surveying?

  • Posted on 8/7/2013 at 3:59 PM Accepted
    I'd start by figuring out who your clients would be and why they might hire you instead of some other, more experienced market research professional. Your interests and technical skills (and leadership skills) are secondary to your marketing skills. If you can't sell yourself (and your product) nothing else matters.

    I am heavily involved in market research and analytics as part of my own consulting practice, and I use the same suppliers all the time. It would take a lot to get me to even listen to a newcomer. I've come to rely on and trust my current suppliers, and I feel I get 110% from them in return for my loyalty. What would you say to me to get me to reconsider?
  • Posted on 8/7/2013 at 5:21 PM Author
    I’ve typed this in MS Word, and then copied and pasted. If there are formatting errors apologies ahead of time.



    Chris

    Thank you, and I’ve successfully made my transition. Many veterans don’t. You can say I’m one of “the few and the proud.” For a start-up research firm how does a firm obtain prospects? Is it a lot of foot action or sit back, entice them, and let them come to me? I am reading on research techniques. Qualitative, quantitative, mixture, surveys, data analysis, etc. Anymore you can think of?
    The questions you posed are rather easy in nature. Is it bad to do research with a hypothesis in mind already? I don’t think so. Seems like I can do it just by thinking what the problems are. “Just be the company.”

    As far as skills, I think research is fun. I’m assuming by skills you mean psychological, mathematical, analytical, writing, etc. All qualities I possess. Two weaknesses I have are public speaking and I like to work alone. Perhaps bad for business, but I’m not worried about it. I am in the process of fixing my weaknesses. Maybe I will uncover more in the process. There’s an ancient African proverb I take to heart. It’s “Man know thyself.” It’s also found in the Bible. Notice the connection? **HINT HINT**

    “Why not go work with a research firm for a while, learn the ropes, and figure out if you would really like it?” Well, if they will take me on. I’m still a college student. Most are hiring full-time help. Besides, I know myself. Life has taught me one valuable skill. If you want something, DO IT YOURSELF. It’s what the military refers to as a D.I.T.Y. Yes indeed!

    Honestly, if someone gave me a marketing task I think I possess the skills to design a survey or at least a research plan.



    MORIARTY

    I think I am a people person. As far as business matters, but on a personal level I tend to be an introvert. I just need time to think what my next idea will be. I’m sure I will do fine running a business. I’m not concerned about that; well, maybe a little. It’s only natural. I tend to label myself as a visionary, innovator, and achiever. I’m not worried about the blind obedience, and blind duty. “They do not have a duty to anybody else.” Funny how people *always* forget about the customer in their business. They remember every little detail down to where records are stored, but always forget about the customers that make up their business.

    “It means you have to have the courage to be you. “ That’s another reason I need to start my own business. I can’t work for someone else. I don’t know what their vision is, and even if I do it may not make sense in my mind. Some are meant to lead while others are meant to follow. I’m a leader.
    As far as being offensive none taken. I think it’s Samuel L. Jackson who said, “You can’t handle the truth.” Many people can’t. I’ve learned to be personal with people, but not too personal. The truth has the power to construct, to deconstruct, to grow, to decay, to strengthen, to weaken, and most importantly to look inward. I can keep going; however, I think you get the point. I don’t get personal with people. I would hope a prospective business owner can at least accept reality pertaining to their business. If not, I dare question their leadership. Moral of the story: I keep my distance when needed.

    I live in the United States. The legal aspect, especially in this country is what threatens most businesses-in my opinion. I agree. Clarity is the key. I will definitely keep this in mind. How do you conduct marketing research in an international format? (Just a mental note to myself) I also failed to mention I do classify myself as a unique-creative individual. Once I am knowledgeable of a subject, that’s when I use my personal strengths to “twerk it.”

    What kind of information can the Chamber of Commerce provide, and how would I address them in an appropriate manner?

    Yes, of course your information is helpful. All information is insightful. Good or bad. Matter of fact, I prefer the bad more than the good. It promotes growth.



    Jay

    How do I segment my potential market? How do I “know” who is my potential clientele and who is not? I think the competition is easy to figure out. You’re in the same line of work. “Understand who would hire your services, when, how they determine value/quality, their lifetime value, etc.” I think that’s my responsibility right? Not the customers. “Understand how the competition positions itself, their fees, their proven worth, messaging, etc” Yes, those are the million dollar questions, and perhaps one of the most important concepts to remember. Where does one gather this data? I’m new to this. I do research things on my own. I may stumble across this answer later, but will you point me in the right direction?



    Modza

    Well, without giving away too much detail change within an organization is what will set my business apart. I’m an innovator. Change is what I do. I look up to guys like Steve Jobs. I didn’t like his business ethics, but on an individual level Steve did what he loved. I bet if he could have lived to 900 years old he would have lived every minute of it to his fullest. Imagine the ideas, innovations, creations, etc that died with Steve. He’ll truly be missed. He is/was a pioneer of our time. No doubt about it.

    In the initial stages, I will outsource for help (business plan creation, taxes, Employer Identification Number, etc). Just the basics! Once I get started, the rest will be natural. It’s just getting passed the initial red tape. YUCK!!

    “The only reason you give for choosing market research is that you believe the fact that its "ever changing atmosphere appears to fit my dynamics." Trust me, there’s more to it. My life was started in a deeper whole. I’m not worried about it. My talent in life appears to be filling in those holes. One day I will stand on a mountain. I’m fortunate I made it this far. So, there has to be more to it. I find doing something I already know is boring. I think market research offers a new challenge with different tasks. This way I don’t become stale in nature. Actually, I’ve contemplated the idea of starting a blog and believe one day (within a year) I will start a blog. If, or when I do, I will be sure to post the Website on MarketingProfs. I have an idea that’s centered around my personal beliefs. I think it will help companies to increase their PROFITS and individuals to increase personal growth. It’s all in how you look at the glass.

    “How are you going to reach people, maintaining a statistically valid sample of the population you're surveying?” A simple and less complex answer without any detail is to entice them, and let them come to me.




  • Posted on 8/7/2013 at 5:21 PM Author
    Mgoodman

    That’s how I view my life. My life is a business, and I am the product. I must learn to “sell myself.” I’ll make it worth their wild. What’s a realistic goal in your opinion? I’m very methodical in my approach to the point I get on my nerves, but it has to be done. If I start slacking, then that will reflect in my business practices. I have a plan to be 35 years old and just starting my own research firm. Maybe sooner; however, I think 35 is a realistic target. The biggest thing is saving capital. Are small business loans through the SBA.gov a good way to go? I remain hesitant on boring money. If I have to I will, but at a bare minimum. I think the less a company borrows the more efficient that company is. At least from a financial perspective; I know, it’s open to criticism and I invite it. Just like marriages, the number one killer of a firm is financial obligations. That’s one reason I don’t want outside help. It comes with strings attached.
  • Posted on 8/7/2013 at 6:34 PM Accepted
    The way to start is to create a business and marketing plan in writing -- not just in your head. What will you do each month in the first 2-3 years? What will it cost? How will you determine if it's working? How much revenue do you anticipate it will generate? How long will it take for marketing activity to yield results?

    It doesn't have to be perfect, but it's a good way to start because it will let you know if there's a chance it will work, and how much you might need to invest before you can turn a profit. It will also let you know which factors are the most significant, so you can focus on them.

    Of course, you have to be realistic. False bravado only hurts you. Better to assume the worst and be pleasantly surprised if things work out better.

    The written business and marketing plans are probably the best tools you have in starting your business. Without them you're taking an unnecessary risk and essentially flying blind. If you need help, hire someone who has done this before. But don't skip this step.
  • Posted on 8/7/2013 at 6:44 PM Accepted
    IMO a realistic goal would be to get 5-10 years of hands-on experience with a reputable market research firm, working in all areas -- operations, sales, marketing, technical services, etc. Then create the business and marketing plans for going out on your own.

    If you are not ready for a solo practice in 10 years, you probably won't ever be ready. And it will take a minimum of 5 years to really learn all aspects of the market research business, even if you find a company that is prepared to cooperate with you in getting that exposure, and if you are the fastest learner in the country.

    Pulling the trigger on this too soon will all but guarantee failure. The market research business is tough, margins are thin. It's hard to find a profitable niche, and competition is fierce. Those might sound like interesting challenges, but when you are not bringing in enough revenue to put food on the table or pay the rent, month after month, it's not so much fun. A lot of smart folks have learned this already.
  • Posted on 8/7/2013 at 6:51 PM Author
    Okay. Thank you for the responses. Any additional information is welcome.
  • Posted on 8/7/2013 at 7:00 PM Accepted
    Regarding small business loans through the SBA: The loans are administered by local banks, and they require detailed business plans. If your business plan is strong enough, the bank will often give you a loan on terms that are equal to or better than the SBA's.

    Net, it all depends on how good your business plan is. That's another reason to put your energy into creating a knock-your-socks-off business plan ... for yourself and for your lenders/investors. (Just be sure you're prepared to execute the plan!)
  • Posted by Jay Hamilton-Roth on 8/8/2013 at 12:12 AM Member
    "Understand who would hire your services, when, how they determine value/quality, their lifetime value, etc.” I think that’s my responsibility right?" - Yes and no. Ultimately, it's about the promise/proof you make. But just because you think someone should hire your services doesn't mean they will. You need to understand who is likely to hire you. So you need to deeply understand your prospective customers. After all, once you have started your business, how will you market it? It'll depend on who the people are, where they're located, their needs, your expertise, etc.

    “Understand how the competition positions itself, their fees, their proven worth, messaging, etc”. You need to study "your enemy". Read everything they write. Attend all their webinars. Contact previous clients of theirs' to learn what they thought of the process. Gather your professional friends, and have them contact these companies on your behalf to learn more. Listen. Ask. Go to conferences. Try things out. Be willing to fail to learn.
  • Posted by Moriarty on 8/8/2013 at 3:44 AM Accepted
    Good morning.

    Now when you say "I think I am a people person. As far as business matters, but on a personal level I tend to be an introvert. I just need time to think what my next idea will be. I’m sure I will do fine running a business." You'll find that dealing with appreciative clients makes dealing with them something you'll want to do. The knack of running your own business is to recognize the people you can and can't deal with - and believe me, the characteristics are all the same (although some specifics may be individual). The ability to realize who your best clients are is a big step to "out of the box" thinking - at least in a real and practical way rather than just management waffle.

    In your working life keep a note of those people you really get on well with (and those you don't). This will be a big help in gaining confidence not only in yourself, but your abilities too.

    You responded to Mr. Goodman with a comment that "I’m very methodical in my approach to the point I get on my nerves, but it has to be done. If I start slacking, then that will reflect in my business practices." My take on this is that it doesn't have to be done. I want to add something of a parallel here. The painter Willem van de Velde* painted fantastically detailed pictures that are famous. He got caught in your "trap" of needing to detail every last thing, and his clients loved it. Only somehow his paintings lack vitality for all their accuracy. Frans Hals** on the other hand used detail to emphasize areas of his paintings. Yet right next door to a lace cuff that's ornate to the point of perfection, are some of the crudest brushstrokes ever put to canvas.

    Why?

    Because Frans Hals could have included all the details, it was a conscious decision not to. He had the ability to stop himself - and develop instead a flair for slapping on paint in a way that took very little time. The very deftness of those brushstrokes is an art in itself. They actually enhanced the the painting, where detail would have made it dull and lifeless.

    Frans Hals knew what his customers wanted, knew what details they needed - and in leaving the rest unfocussed brought a vitality into the painting.

    Knowing where your customers need detail is very important! This will take you a good few years to learn, only learning it will make you a fine consultant. So bear it in mind every time you're up past 2am tweaking the details on a report.

    *https://upload.wikimedia.org/wikipedia/commons/5/50/De_krijgsraad_aan_boord...

    **https://upload.wikimedia.org/wikipedia/commons/d/d7/Frans_Hals_027.jpg


    To be honest with you, think of "starting" your company now. With nothing. Think of everything you do for someone else or their clients as if you were working for yourself. That way you'll get a feel for dealing with them, and it'll make that initial step into the 'nothingness' that is the real world a whole lot easier.

    So start writing down your business plan - and in ten years' time when you come to execute it, if one word of it remains the same, you haven't been doing your job ;-) It's an easier way to start - and it'll throw Jay's advice to get things wrong into perspective for you. Because getting things wrong only tells you where your strengths lie, and since it's a process of exclusion means it's not very easy to do. Which is why many people don't do it, and in focusing on the details means they never quite get to form that picture.
  • Posted on 8/8/2013 at 11:27 PM Author
    Personally, that's always been one of my greatest strengths. The ability to do things blindly and adjust on the move. I'm 50/50 as far as going at it the red tape way or just starting a freelance market research career with no resources other than what exists on the Web. It's possible. I like both ideas. I think freelance market research is probably the best. Especially, with an entrepreneur mindset. I am not afraid of failure. The biggest thing that stops me is I don't know where to begin. I do have an idea, but I don't plan to start it until the beginning of next month or October at the latest (as a Bday present to myself). Either way, I think I'll be okay. Thanks for the responses. Anymore information is "greatly" appreciated. Thanks to all.
  • Posted by Moriarty on 8/9/2013 at 2:22 AM Accepted
    Where to begin ... hmmm ... now tell me, does anybody know how to do this? I'm sure it's the biggest hurdle for anybody, and stops most who'd like to in their tracks.

    So let's look at a few options, shall we. Because you have a good qualification - and people like that. It'll get you a job if you look hard enough. In the meantime there's nothing to stop you taking on a client or two at the weekends, is there? And it'll be a good back-up if you find yourself without work for any reason. It also means that you don't have to rely on either source of income.

    You could have a look at Elance - the quality of the leads there is frankly below contempt, but it will give you a good indication of who is and who is not a good match for your skills. You'll learn more about customers than you'll earn - which is the point. This is about learning not earning.

    So start sniffing around, get your act together and see how things go. Don't expect miracles and expect to get a few knocks (like nobody wants you!). One final note - always think of who your best kind of customer would be and aim everything you do to them. That way, you'll have the best chance of getting them. Just make sure that your idea of a good customer is realistic and you'll learn that as you go along ... as long as you know they exist, you'll be honing your approach to them.

    Good luck, and don't forget the day job ;-)
  • Posted on 8/11/2013 at 3:21 AM Author
    Before I started this discussion, I was leaning toward Moriarty's opinion. I wanted to know what others thought, and if any additional ideas may be presented. It's nothing out of the ordinary that I expected. It seems no matter what choices you face in life, there's always about four main directions to go. The rest are simply made up. Thanks to all who contributed. I will leave this post open until Monday evening sometime. If others feel comfortable commenting or providing additional information then please. I would enjoy hearing your input.

    Moriarty, a question for you. "Because you have a good qualification - and people like that." What qualification are you referring to? I think I know already, but I just want to verify. I'll give it a stab. I think you're referencing my abilities to be innovative, creative, unique, different, and my ability to exercise personal growth and personal drive. If I am correct in my assumption.

    Now, to end my posts. How are points distributed? Is it 500 points per accepted answer or are the 500 points divided among each accepted answer? Thanks for the replies. Others are still welcome to apply. Take care and thanks to all.

  • Posted on 8/11/2013 at 3:51 AM Moderator
    Points are divided evenly among the accepted answers.
  • Posted by Moriarty on 8/11/2013 at 4:46 AM Accepted
    Ah ... "What qualification are you referring to?" You are a Business Administration student, ergo there's a qualification lurking somewhere ;-) There are no qualifications for things that there can be no evidence for - and that includes creativity. Were there qualifications in innovation, they would probably be out of date very quickly owing to innovative ideas ;-) Just think of the iPad! Everyone was happy with laptops and PCs and things - and so everyone made them. Then Steve Jobs (RIP) comes up with a bigger iPhone that has many of the capabilities of a laptop ... and the entire world of computing is upset. Now everyone's making tablets. It's easy to copy, hard to innovate - and harder still to get people to accept innovative ideas.

    I'm afraid that most people do not like creativity or innovation; it is seen as "not being part of the forum's culture" or "rocking the boat" - people tend to like things just as they are.

    However, what they do like is someone who can use their creativity in a way that fits their needs almost exactly. Which is putting the issue around the other way, as it were. That way you can be "their kind of consultant" - whilst at the same time appearing to be a totally different consultant for someone else.

    It's not what you do, it's the way that you do it.

    Furthermore when it comes to four directions in life - one of them is right and three are usually wrong. Knowing how to deal with mistakes quickly will see you on the right path, only most people find themselves on the wrong path and by the time they realize their mistake they've got ten years' experience on their CV and a battery of qualifications - meaning they're the perfect fit for their job. At least as far as HR is concerned.

    Being a consultant means using your qualities as well as your experience. Because it's about trust. If they can trust your judgment without needing to see pieces of paper, you're one up on the rest. That's genuine trust. HR don't do trust because they don't need to. The paper's there, ergo it's a fact and can't be contradicted. However when it comes to a businessman who is struggling, will he be trusting people who only want to tell him what they think is the right answer? Or will he seek out someone outside his firm that he can trust to give him hard answers?

    If you can, you've got a job.

    It will take time, so in the meantime take a job if it's offered. Only don't rely on it and don't get stuck in its clutches. I wish you well, because businessmen the world over need help from people like you.

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