QUESTION ON Starting an Information Broker Service
I do not have a business background or any business experience. Over the last 2 years I have researched 2 different business opportunities and several university degree programs and related careers for myself and friends. What would be involved in doing that type of research as a business? Thank you,
From what I gathered in your question, you have done some research and now you want to see if you could turn your ability to gather information into a business. You may be thinking of starting a business as an information broker.
An information broker tracks down and locates the specific information a business, organization or client needs. 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 areas, such as market research, statistics, title searches or scientific data. You can also work for non-profit organizations who need information about foundations and private individuals to approach when applying for grant funding. Real estate title searches are another common area for information brokers. The growing field of genealogy also provides a rich source of demand for this kind of business.
Many companies use information brokers to do research about their competitors in their industries. Other examples of research projects that require the services of an information broker include:
- Background research about a new product concept
- Carry out a patent search on a product they want to introduce
- Learn about companies producing related products
- Research on pricing for product categories
- Find out as much as possible about a new market.
This business is usually easy to start with low start-up costs. If you like variety, this business is also for you. However, cracking the market is not easy and it will take time to build your reputation and hence, clientele.
One way to start in the business is through doing relative easy tasks, such as the research projects that you can find in sites such as Mechanical Turk or on freelance sites such as Elance (read the article How to Make Money Doing Data Entry).
Depending on the type of research you want to focus on, you should have access to a wide variety of databases that are relevant to your niche. These are paid databases, such as Lexis-Nexis or WestLaw, and can be expensive (but tax deductible!). Given the need for constant contact with the client and deadline pressures, this is a business that is hard to do on a part-time basis.
You can charge by the hour or by the job. Going rates vary from $25 to $100 per hour, depending on your established reputation. 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 hour. 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.
If you want more information, read the article Starting an Information Broker Business. You can check out these other resources:
- Association of Independent Information Professionals http://www.aiip.org
- Society of Competitive Intelligence Professionals http://www.scip.org
Recommended Resources on How To Start an Information Broker Service
- Building & Running a Successful Research Business: A Guide for the Independent Information Professional
- Information Brokers: Case Studies of Successful Ventures
- Super Searchers Make It on Their Own: Top Independent Information Professionals Share Their Secrets for Starting and Running a Research Business (Super Searchers series)
Article originally published in April 2003.