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Evaluating Entrepreneurial Ventures Guide

This document summarizes key topics from Chapter 11 of a textbook on entrepreneurship, including assessing opportunities for new ventures. It discusses common pitfalls in selecting new ventures like lack of market insight. Critical factors for success include product uniqueness, investment, and sales growth. Common reasons for venture failure include product/market problems, financial difficulties, and managerial problems. The document also outlines the evaluation process for new ventures and key areas to assess like technical, market, financial, organizational, and competitive feasibility.

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Sameer Khan
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98 views15 pages

Evaluating Entrepreneurial Ventures Guide

This document summarizes key topics from Chapter 11 of a textbook on entrepreneurship, including assessing opportunities for new ventures. It discusses common pitfalls in selecting new ventures like lack of market insight. Critical factors for success include product uniqueness, investment, and sales growth. Common reasons for venture failure include product/market problems, financial difficulties, and managerial problems. The document also outlines the evaluation process for new ventures and key areas to assess like technical, market, financial, organizational, and competitive feasibility.

Uploaded by

Sameer Khan
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd

Part IV Initiating Entrepreneurial Ventures

Chapter 11 Assessment and Evaluation of Entrepreneurial Opportunities Chapter 12 Legal Structures for New Business Ventures Chapter 13 Legal Issues Related to Emerging Ventures Chapter 14 Sources of Capital for Entrepreneurs
Copyright (c) 2004 by South-Western, a division of Thomson Learning. All rights reserved.

Chapter 11 Assessment and Evaluation of Entrepreneurial Opportunities

The Challenge of New-Venture Start-Ups


600,000 new firms have emerged in the United States every year since the early 1990s. The U.S. Patent Office currently reviews more than 375,000 patent applications per year.

The Elements Affecting NewVenture Performance


Environment Entrepreneurs Characteristics

Founding Processes

Initial Firm Characteristics

Performance

Pitfalls in Selecting New Ventures


Lack of Objective Evaluation No Real Insight into the Market Inadequate Understanding of Technical Requirements Poor Financial Understanding Lack of Venture Uniqueness Ignorance of Legal Issues

Critical Factors for New-Venture Development


Uniqueness Investment Sales Growth
Lifestyle ventures Small profitable ventures High-growth ventures

Product Availability Customer Availability

Why New Ventures Fail


Product/Market Problems Financial Difficulties Managerial Problems

Types and Classes of First-Year Problems 1. Obtaining external financing 2. Internal financial management 3. Sales/marketing 4. Product development 5. Production/operations management 6. General management 7. Human resource management 8. Economic environment 9. Regulatory environment

External Problems Experienced by Entrepreneurs


Pricing 8.4% Location 11.1% Expansion 5.5% Market Knowledge 19.3%

Product Issues 7.6%

Market Planning 14.4% Competitors 6.3%

Customer Contact 27.3%

Internal Problems Experienced by Entrepreneurs


Inventory Control 12.3% Facilities/Equipment 12.6%

Human Resources 12.0%

Cash Flow 14.9%

Leadership 11.1% Adequate Capital 15.9% Organizational Structure 10.8% Accounting Systems 10.4%

Determinants of New-Venture Failures


Entrepreneur Lack of mgt. skill Poor mgt. strategy Lack of capitalization Lack of vision Poor product design Key personnel incompetent
Rank

Entrepreneur Lack of mgt. skill Poor mgt. strategy Lack of capitalization Poor external market conditions Poor product design Poor product timing

Rank

1 2 3 4 5 6

1 2 3 4 5 6

The Evaluation Process

Asking the Right Questions

Comprehensive Feasibility Approach

Key Areas for Assessing the Feasibility of a New Venture


Technical Feasibility analysis of product or service Market Determination of market opportunities and risks

NewVenture Idea

Financial Analysis of financial feasibility & resources Organizational Analysis of financial organizational and personnel requirements Competitive Analysis of the competition

Determination of Feasibility of Planned New Venture

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