Before starting a new business, there are many questions that need answering and the only way to find out is through market research. One of the most important questions, of course, is the budget. Every startup is looking to get a return on investment; otherwise, it wouldn’t be a successful business.
The first thing a startup should do is to invest in startup funds for research to decide the best way to increase brand visibility and awareness.
Before figuring out how much to spend on a research budget, a great rule of thumb is to spend 10% of your projected revenue on marketing. To calculate an ideal marketing budget, see the equations below:
- Total Revenue x 5% = Marketing budget required to maintain current awareness and visibility
- Total Revenue x 10% = Marketing budget required to grow and gain market share
Next, you’ll want to make an outline of what you’re looking for. What questions will your research need to answer such as how well will your product do in the market and how much it should cost.
Once you have a budget and an outline of research questions, you can decide which reports will fit under your research budget. A good resource is on MarketResearch.com, where they provide you with a great team of research specialists to work with your startup needs. Below is a list of research report options:
Syndicated Research Reports – Research reports that cover all kind of topics, from general market overviews to a detailed analysis of specific companies and industries. Most of the time, you can find all of the information you’re looking for in one report. Below is a detailed guide on what type of information and costs to expect from a typical published report:
- Top-Level Reports:
- Average cost: $100 – $1,000
- Reports normally cover basic information about an industry. Answers questions such as how big an industry is and who the top players are, and will also provide basic information on how the industry has matured over time.
- Full-Market Reports:
- Average cost: $1,500 – $8,000 (most commonly $3,500 – $4,000)
- These include a full explanation of the market and subcategories, as well as metrics covering the market’s current state and future projections for market development. These reports also cover current trends in the industry, and how the trends will move the market over the course of several years.
- Product Detail Market Reports:
- Average cost: $15,000 – $35,000
- These reports provide more details on the performance of the market and its subcategories as well as cover specific market values and trends of specific products/services in the industry.
Subscription Services – Subscription services are an alternative solution to purchasing individual reports and are often more cost-effective. Services such as the MarketResearch.com Knowledge Centers give you access to a full library of industry-specific reports. Subscription-based products also allow you to view reports directly ensuring fast access to the information you need.
Custom Research – Custom research is designed to provide specific answers to your questions, with the information being as extensive and detailed as your need. Custom research is completed after you request it, so it needs to be managed into your marketing timeline. Additionally, it tends to be conducted by companies with very specific needs and larger budgets, as an average project can cost $30,000 – $50,000.
Another great option might be Profound.com’s upgraded solution for small companies and start-ups. This gives you access to thousands of reports in your industry at an affordable price.
If you’re still having trouble, you can always network with other successful small business owners who have done their own market research. Get to know local entrepreneurs near you at The Small Business Expo’s trade shows.