How to Start a Research and Development Company | 8 Steps with In-Depth Details


Information presented on this web page is intended for informational and educational purposes only and is not meant to be taken as legal, financial, investment or tax advice. We do not accept any responsibility for any trading or investment related losses. Please review our disclaimer on before taking action based upon anything you read or see.

Research and Development (R&D) companies have teams who dig deep to introduce new products and services in the market. The sole purpose of these companies is to make innovations in the market by adding new products and services. Such companies are the backbone of any corporation as without such workers, it’s impossible to bring some new ideas for the clients in the market. So, such a business can be beneficial for the owners. But before starting a research and development company, learn “how to start a research and development company?”

The basic purpose of forming any corporation is profit that is possible only if one brings more beneficial ideas and products for their customers. One can achieve success in this field by creating a team for research tasks. But for initiating such a business, you need proper knowledge and understanding of the market. 

This understanding is possible through deep observation of the market. As in the later section, we’ve worked to formulate a procedure to create a research and development company. So, let’s move down to explore all about this innovative idea. 

Importance of Research and Development Team

Importance of Research and Development Team

The research and development team plays a vital role in the up-gradation of any company or corporation. There are many benefits of such a team. Some major advantages of such a company are discussed here. 

  • R&D companies help to introduce new products and ideas that increase the proficiency of any corporation. 
  • The R & D team helps to increase the power and knowledge of the company members. 
  • It helps to make improvements in the corporation. 
  • Such a team helps to increase sales of any corporation. 
  • These research companies play a vital role in facing the market competition as these companies give innovative ideas. 
  • It helps to increase the growth rate. 
  • Such a company imparts a positive impact on the economy of any corporation. 
  • These companies increase productivity. 

What are Different Types of Research and Development?

Different Types of Research and Development

There are three major types of R&D. Here is a brief introduction to these branches of R&D. 

Basic Research

Basic research includes a thorough understanding of any subject area. It doesn’t have the application of that particular subject in the market. It aims at scientific advancement in that specific subject area and doesn’t include any commercial aim. Such researchers are a very important part of any corporation as they are working persistently to better that particular corporation. 

If a corporation faces any problem, the basic research team is there to help them tackle that problem. First, they do the initial necessary steps and finally find a solution to that problem. Also, they provide the corporation with the new trends of the market. 

Applied Research

As the name suggests, this type of research has practical application in the market. Such a research team aims to investigate the creation of new products and services. Therefore, they have special goals or aims in the market. 

The applied research team struggles to meet the market and customers’ requirements. They always try to help the corporation in getting benefits from the market trends. 

Development Research

This branch of research uses the data of previous researches to launch an innovative service or product in the market. Then, they take the help of both the previous researches to formulate something innovative. 

These research teams also work to make the existing products and services better and effective for the customers. In this way, they always work to do something new for the corporation. 

How to Start a Research and Development Company

How to Start a Research and Development Company

Here is a brief procedure to start a research and development company. By following this procedure, you can start your research and development company. 

Determine Your Expertise

The foremost thing to start a research and development company knows what your area of interest is. Without understanding your expertise, you can’t research any particular niche. So, be sure of your expertise in the field to use them for professional research. 

Another important thing is your personal experience. Keep in mind that if you don’t have a special interest in a particular task, you can’t succeed. So, try to combine your academic knowledge, experience, and personal interest. When you combine all these things, you can research precisely. 

If you’re not getting clear in your expertise, ask yourself the following questions. 

  • Ponder your academic background. 
  • Ask yourself about your interest to know your interest. 
  • Ask yourself whether you have any interest in business research or not.
  • Clear your mind about the clients of your interest. 
  • Ask yourself about your previous research task, if any. 

When you go through these questions, there are more chances of clarity. 

Cost and initial investment

Research and development of a new product are necessary for bringing a new product to the marketplace. By creating a new product, companies can offer something that wasn’t available before. It also allows them to set themselves apart from their competitors by offering innovative or creative solutions to existing problems or unmet needs.

However, developing products that deliver real results does not come without risks for the business owner who invests money upfront in research and development and time spent perfecting the final version of the product. This is why business owners need to plan out each step of their design process to work within their means financially while still producing quality results.

Check the Best Minors for Business Majors.

The cost of doing research and development varies by many factors, including what type of industry the company works in, the product they’re developing, and how similar it is to products already on the market.

Research and development (R&D) is traditionally divided into basic research, applied research, and developmental research:

Basic research is performed to increase scientific knowledge and may be aimed at answering questions or solving problems raised by physics, chemistry, biology, and other sciences. However, basic researchers often stay far removed from any immediate practical applications because their work is intended to produce fundamental knowledge and basic understanding, leading to new technologies that other businesses or organizations can exploit. 

Applied research is performed to achieve specific practical results, like a new product or a better process for an existing product. Thus, applied research is more targeted than basic research and focused on immediate commercial goals with very short timelines. 

Read more about How to Start a Lipstick Business.

Follow the rules and Regulations.

Consult your attorney before you start.

The company should have at least one director who is a US citizen or resident.

Each director must sign the articles of incorporation in person, except the articles may be signed by an attorney, in fact, under a duly authorized power of attorney.

You should set up accounting records for each company which will consist of the general ledger, chart of accounts and subsidiary ledgers.

There are two types of books that need to be kept: 
  • Financial statements; 
  • Other supporting records such as purchase orders, invoices, employee timesheets etc. 

The business owners must maintain these financial statements and supporting records for 7 years after the year they were prepared unless otherwise requested by the client, the IRS or other applicable authority.

A board of directors should be appointed to delegate’s duties and responsibilities. Accordingly, certain tasks, functions and powers are reserved for the board of directors, while others are delegated to managers or officers.

The trade name should expressly not include the words “corporation,” “incorporated,” or any abbreviation thereof unless it also contains either the word “Company” or an appropriate abbreviation thereof immediately after that.

There is little benefit in registering a trademark since state law provides that trademark protection arises automatically when a service mark or trademark is used in business transactions under Lanham Act. 

As a result, the Lanham Act governs most patent law in the United States. If a firm uses a title or emblem in trading, it instantly acquires “statute law” trademark protection, which are actionable in state courts.

All companies must file annual income tax returns on Form ITR-6 within three months after the end of every year.

Companies cannot be formed for illegal purposes and must operate by their stated purpose.

Read this article: How to Start a Landscaping Business without Experience.

Here are the required documents and fees

  • Articles; Memorandum; Minutes; Board of Directors (minimum 5); 
  • Operating Agreement/ Bylaws (if applicable); 
  • Organizational Structure (if applicable); 
  • Filing Fee: $100; 
  • State Fee: $150, payable to the Secretary of State; 
  • Registered Agent Fee: varies by company type, 
  • Corporations pay $300 annually; 
  • Trade Name Registration (for companies only): $500-$1000 depending on size and location.

Set the Goal about Clients

When you’re clear about your interest, the next step is to set the target clients. First, be certain about the clients of your company. Here are some types of clients, decide which category will suit your company. 

  • External companies
  • Business to business researchers
  • Advertisers
  • Special researchers
  • Research for government offices
  • Research for politicians
  • Now, research for any commercial company to get data on a particular niche
  • Research for financial institutions

Advertise Your Research Services

When you decide on your potential clients, the next step is to advertise your services in that client circle. There are different ways to do this task. Here are some ways to do so. 

  • By making your social media presence sure.
  • By developing websites for your business. 
  • Do necessary SEO for your website to improve its ranking on the search. 
  • Manage the following
  • Google ads. 
  • physical advertisements in the form of pamphlets.
  • Manage seminars.
  • Manage referrals through the existing clients. 

Set Your Charges

Set your charges for different services. You can divide your charge sheet in the following manner.

  • Flat fee
  • client fee
  • service fee
  • project fee

Improve Your Service

Over time, you would be able to get a handsome number of potential clients. When you have met your clients’ goals, start working on the improvements in your service. You can do this in the following ways.

  • Pay special attention to the tasks. 
  • Manage your time accordingly and meet your deadlines.
  • Try to divide your team into different categories that will improve the performance. 
  • Finally, make sure that your company has a friendly collaboration. 

Make Your Service Attractive

Once you have set your business, how far it sustains in the market is up to you. It depends on your capabilities. One of the best ways to make your service better is by improving the way of result presentation. You can do this by following these tips. 

  • Present your results in the form of authentic charts, graphs, or tables. 
  • Make a short video clip, if necessary. 
  • There are possibilities of a live presentation of the results. 
  • Also, you can present your results in the form of slides. 
  • Finally, you can manage writing an article on the result of your research. 

Frequently Asked Questions

What are the three major types of research and development?

These are the major types of research and development. 

  • Basic Research
  • Applied Research
  • Development Research

What is an example of product development?

There are many examples of product development in daily routine life. For example packaging of wheat, bags are an example of product development. Packaging of cooking oil pouches is also an example of product development. 

How does an R&D department work?

The research and development department plays an important role in the upbringing of any corporation. There are different roles of this department in any business. Some benefits of this department are as under. 

  • This department helps to create new products and services. 
  • This department helps to improve the existing products and services. 
  • Helps to attract a maximum number of potential clients. 
  • Plays a vital role in creating the values of any company. 
  • Helps to compete with market trends. 

How much does it cost for R&D?

It depends on the company corporation how much it spends on the R&D. Usually; a normal corporation spends 3.5% of its total revenue on the R&D. However, this expense may increase up to 7% of the total revenue. 

Is R&D a good career?

Yes, running an R&D company is an economical business as it plays a vital role in the up-gradation of any corporation. Nowadays, companies are spending a handsome amount on R&D. So, starting such a business is economical. 

How do you manage the R & D department?

There are different ways to make the R&D department better for better services. Here are some solutions. 

  • Be active and read the industry presses regularly. 
  • Investigate new ways to solve a problem. 
  • Talk with maximum people on the industry problems. 
  • Keep figuring out the importance of the R & D department. 
  • Work collaboratively. 
  • Don’t hesitate to get help when needed. 
  • Be regular and meet the deadlines. 
  • Arrange free or paid seminars. 


Research and Development Company plays a vital role in the upbringing of different corporations. It’s an R & D company that builds the worth of any corporation in the market by introducing new products and services or by improving the existing products and services. So, starting a research and development company can prove beneficial if someone properly understands it. You can also start such a business by following the procedure mentioned above.

error: Content is protected !!