4 Entrepreneurship What Entrepreneurs Need to Know Before They Start: Acquiring and Interpreting Information about Markets, Competitors, and Government

4-2 “Information can tell us everything. It has all the answers. But they are answers to questions we have not asked, and which doubtless don’t even arise.” --Jean Baudrillard

4-3 Information You Need Potential markets Existing and potential competitors Ability to launch and run a new business Government regulations and policies Capital needs

4-4 Components of Feasibility Answers the question: Is the idea viable? Product or service feasibility Industry/market feasibility Organizational feasibility Financial feasibility

4-5 Concept Test Show or demonstrate a product or service to potential users to measure interest

4-6 Competitor Analysis Reputation Physical resources Advertising/marketing resources Financial resources Technical resources Human resources Relative product quality

4-7 Direct Techniques Survey Perceptual mapping Focus groups

4-8 Customer Surveys Potential customers compare your product with existing ones Target group rates different dimensions of the product on a scale from low to high Assumes you know the dimensions customers use to evaluate products

4-9 Perceptual Mapping A map that reveals the key dimensions along which potential customers perceive products and evaluate them

4-10 Perceptual Maps for Object Locators

4-11 Focus Groups Groups of 8 to 12 people similar to potential customers Meet for one to two hours to describe their perceptions of and reactions to relevant products Identify the key dimensions along which focus group members perceive and evaluate various products

4-12 Repertory Grid Each product is listed on a separate index card Three cards are chosen Group members describe ways in which any two products are similar and the third is different Identifies dimensions along which people perceive the product

4-13 Indirect Techniques Examine secondary data including Sales of competing products Demographic data Trends (economic, lifestyle, etc.)

4-14 Government Policies and Regulations May make it harder or easier to start and run a new venture Gather relevant information on the government policies and regulations that will affect a new business

4-15 Reduction of Marginal Tax Rates Growth of New Ventures Taxes

4-16 Legal Forms and Taxes Regular C corporation—profits and losses remain in the company and the corporation pays taxes Sub-Chapter S Corporation—profits and losses flow through to shareholders, and they pay taxes

4-17 Tax Incentives Depreciation Location in certain geographic regions Renovation and improvement of older buildings Tax credits for research and development

4-18 Government Policy Small Business Regulatory Enforcement Fairness Act Unfunded Mandates Reform Act Small Business Innovation Research (SBIR) program 8(a) Business Development Program HubZone Empowerment Contracting Program

4-19 Health and Safety Occupational Safety and Health Act of 1970 (OSHA) requires employers to Provide safe and healthy work environment Comply with specific standards Keep records of occupational injuries and illnesses

4-20 Discrimination Title VII of the Civil Rights Act of 1964 prohibits employers from basing employment decisions on race, color, religion, sex, or national origin Americans with Disabilities Act of 1990 prohibits discrimination against persons with disabilities

4-21 Americans with Disabilities Act Protects persons with disabilities who are able to perform the essential functions of the job Requires employers to provide reasonable accommodation for such persons

4-22 Group Decision Making Pitfalls Group polarization—tendency to shift toward more extreme views Groupthink—groups gathers around a specific decision, rejecting contrary information Biased processing of information

4-23 Improving Group Decisions Devil’s advocate technique Authentic dissent Appoint individuals with technical or business experience to a Board of Advisors