Using libraries, knowledgeable CEOs, and university professors to gather inexpensive market research.
When it comes to brewing up new companies and products, nothing replaces market research. Smart CEOs, however, know how to tap the many low-cost resources around them.
* Hitting the books. In 1988 Hugh Farrington needed to ground his business plan for Seaton Corp., a Chicago staffing-management company, in statistics to lend it credibility. He found exactly the competitive information he needed at the public library. The conclusions drawn from that information persuaded Ernst & Young to bring Seaton into its Entrepreneurial Services Group, which introduced him to the bank that lent Seaton $150,000 its first year, $800,000 the next.
* Getting it from the horse's mouth. In 1962, when Richard Essey, a San Francisco entrepreneur, was thinking about getting into the temporary-help field, he called William Olsten of Olsten Temps fame. What Essey gleaned from a chat with one of the kings of the industry whetted his appetite. Essey's TempPositions now enjoys sales of $17 million.
* Asking the professor. After 20 years of supplying siding, windows, and trim, and piling up $45 million in sales, Plymart could have afforded a private research firm. But Randy Mahaffey, CEO of the Norcross, Ga., company, called a local college marketing professor, who designed a survey of customers' perceptions of Plymart. The results persuaded Mahaffey to carry framing supplies, which have increased sales by 22%. "For less than $5,000, we got $100,000 worth of information," he says.