If you love research and are looking to turn your ability to gather information into a business, you may want to start a business as an information broker. Also called information professional, information consultant desktop online searcher or information retriever, your job is to research and find information for clients.
The information broker business allows you to serve both businesses and individuals that needed assistance in looking for specific information. Businesses consider information a strategic resource that is essential to help them stay on top of changes, new concepts, competition and other operations of their business. Even ordinary folks have demands for specific information, such as their genealogy.
Given the demand for information, the book “Start Your Own Information Broker” edited by Susan Rachmeler states that “there has never been a better time to start a business that capitalizes on your ability and interest in researching pertinent information for individuals, special interest groups and major corporations.”
Tasks of an Information Professional
An information broker tracks down and locates the specific information a business, organization or client needs. If you engage in this business, your task is to find, organize, analyze and package information in a way that makes it meaningful and relevant to a client.
You may specialize in certain types of information, such as market research, law, statistics, real estate research or scientific data. A partial list of some of the research projects that require the services of an information broker include:
- To do background research about a new product concept;
- To carry out a patent search on a product they want to introduce;
- To learn about companies producing related products and determine their pricing or find out as much as possible about a new market.
- To research about client’ competitors in their industries.
- To conduct real estate title searches, as well as information about original cost, annual tax liability relating to specific parcels of land
- To find financial data and survey results pertaining to public relations and advertising
- To conduct legal research, such as details of similar cases the lawyer is working on
- To assist hospitals and medical associations in their medical research, such as obtaining new information on the latest surgical techniques and data on new drugs
- To assist academics and students collecting information for writing or research projects
- To help people trace their family histories through extensive records that are available through certain databases
Start-Up Costs of an Information Broker Business
An information broker business is a labor-intensive business that offers strong income potential and high-income growth. This business can be started for as low as $5,000 or as high as $20,000, depending on your range of services, equipment and data sources. Your initial expenses will be on office equipment and supplies, including computers, printer, fax machine, scanner, telephone systems, and Internet access and office furniture. If you are frequently on the go, you may want to invest in a notebook computer or an iPad with wi-fi access to allow you to continue working on your business anywhere.
A significant part of expenses will be for subscription fees to computer databases, majority of which are online. These databases, such as Lexis-Nexis and WestLaw, contain abstracts or the full text of articles from thousands of publications around the world, including major newspapers, magazines, newsletters, public records, court dockets, Congressional bills, and a lot more.
Given the cost of accessing databases, some of which charges for an hourly rate, you must familiarize yourself and be proficient at using these databases to enable you to perform your searches in the least amount of time at a minimum cost to your client.
If you will be working from home, your start-up costs can be minimal. The key is to limit your initial expenses and purchase equipment and other purchases as your business needs it. Always shop around for the best prices for any equipment buy.
Pricing for Information Broker Services
According to the book “Start Your Own Information Broker” edited by Susan Rachmeler, this business offers a tremendous potential for profits, and you can “easily expect to realize gross profits of $35,000 to $70,000 your first year.”
You can charge by the hour or by the job. Going rates vary from $25 to $100 per or more per hour, depending on the type of research involved, your established reputation and the going market rate. If you price by the job, you need to estimate the number of hours the job will take, the resources you will need to find the information, costs of information and allowances for difficulties in searching for the information. You can either bill direct costs such as photocopying and printing articles either at cost or marked up by 15 or 20 percent.
If you get to work for 500 hours in a year at $35, you can expect to earn $17,500 in one year. However, if you work more at a higher rate of $100 per hour, then you can turn this into a very lucrative business earning about $100,000 a year.
Operating and Marketing an Information Broker Business
As an information broker, you will find yourself working on regular business hours. However, be prepared to work on weekends or even long hours particularly if you are facing deadlines and need to submit results to clients at specific timetables.
Paul and Sarah Edwards, in their book “The Best Home-Based Businesses for the 21st Century” state that obtaining clients is the greatest challenge of this business, “thus you can expect to spend a lot of effort and time marketing to establish a client base.” In the beginning, expect to spend about 50% of your time marketing your business, while the rest of the time is spent doing the research work. As the number of clients increase, expect to spend a greater percentage of your time on researching and finding data for clients.
Specialization is the key to succeeding in this business. In the beginning, you need to specialize in one or two fields. Find an area where you are most knowledgeable and capable. If you have a law background, you might begin by specializing in some kind of law or general business research. This will allow you to become proficient at using a small number of databases, thereby allowing a focused marketing effort and increasing your reputation for successful searches at a low cost. As your business grows, you can expand your focus as your confidence and reputation in the industry grows.
In marketing this business, the first step is to identify the players in your specialized field. Join trade associations and professional organizations. The key is to network extensively and establish personal contacts. You can also reach your potential clients through direct mailing and setting up of follow-up sales appointments.
You may also wish to work on establishing your reputation in the industry. You can do this by writing articles in the local newspaper, starting your own newsletter, and speaking and presenting on information seminars at meetings and trade shows. With the consent of your clients, you may write an article about the discoveries of a recently completed project. You may also want to create a Web site that will list your areas of expertise. Be sure to include testimonials from satisfied clients.
If you want more information, you can check out these resources:
- Association of Independent Information Professionals http://www.aiip.org
- Society of Strategic and Competitive Intelligence Professionals http://www.scip.org
Recommended Books on Research Services or Information Broker Business:
- The Information Broker’s Handbook
- The New Information Professional: Your Guide to Careers in the Digital Age
- Practical Research Methods for Librarians and Information Professionals
- Building & Running a Successful Research Business: A Guide for the Independent Information Professional
- Start Your Own Information Marketing Business (StartUp Series)
- Super Searchers Make It on Their Own: Top Independent Information Professionals Share Their Secrets for Starting and Running a Research Business (Super Searchers series)
- Starting an Information Broker Service
- How to Choose the Right Business Broker to Sell Your Business
- Business Value and Your Small Business
- Gathering Information For Your Business Plan
- Why You Should Know Your Own Clients