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The Elements Affecting NewNewVenture Performance Environment Entrepreneur¶s 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 NewDevelopment Uniqueness Investment Sales Growth ± Lifestyle ventures ± Small profitable ventures ± High-growth ventures High- Product Availability Customer Availability .
Why New Ventures Fail Product/Market Problems Financial Difficulties Managerial Problems .
Types and Classes of First-Year Problems First1. Internal financial management 3. General management 7. Product development 5. Regulatory environment . Human resource management 8. Obtaining external financing 2. Production/operations management 6. Sales/marketing 4. Economic environment 9.
4% Competitors 6.4% Location 11.6% Market Planning 14.3% Product Issues 7.5% Market Knowledge 19.External Problems Experienced by Entrepreneurs Pricing 8.3% .1% Expansion 5.3% Customer Contact 27.
9 O ganizational Structure 10.3 Fa s/ q 12.1 A q a a 15.6 Human Resources 12.0 ash Flow 14.4 al .8 A ounting Systems 10.Internal Problems Experienced by Entrepreneurs Inventory ontrol 12.9 ea ership 11.
skill Poor mgt. strategy Lack of capitalization Poor external market conditions Poor product design Poor product timing Rank 1 2 3 4 5 6 . strategy Lack of capitalization Lack of vision Poor product design Key personnel incompetent Rank 1 2 3 4 5 6 Entrepreneur Lack of mgt. skill Poor mgt.Determinants of New-Venture Failures NewEntrepreneur Lack of mgt.
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 NewNewVenture 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 .