Oregon Entrepreneurs Needs Assessment - Final Book

Final ReportDecember 16, 2016Oregon Business Consulting Group

Chris Ableidinger | Cameron Buswell | Gabri ChodoshShayar Gilani | Annalise Helm | Julie Meunier

Oregon BEST Needs Assessment for Entrepreneurs

Table of Contents

(15) Region Overview

(13) Survey Distribution

(5) Past Surveys Utilized

(3) Project Scope and Process

(9) Survey Questions

(55) Appendices

(27) Industry Overview

(21) Census Comparison

(34) Stage Overview

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IntroductionOregon BEST has retained the services of the Oregon Business Consulting Group to conduct a statewide needs assessment for Oregon Entrepreneurs. Primary research for this assessment is made up of a comprehensive survey of over 188 entrepreneurs, as well as follow up interviews with thirteen survey respondents. The final deliverable for this project includes this report on survey findings, as well as an adjoining document containing six case studies of spotlighted entrepreneurs across the four early stages of a startup.

Below are the original proposed outcomes for this project, as well as the timeline for its completion. Due to a smaller sample of follow up interviews conducted than planned, the third proposed outcome was modified to spotlight specific entrepreneurs in the form of case studies rather than build generic, comprehensive personas.

Proposed Outcomes from OBCG [Abbreviated]1. With Oregon BEST and their extended network, the OBCG will conduct a survey using Qualtrics to

reach as many Oregon entrepreneurs as possible through a mass email.

2. Based on the survey findings, the OBCG team will contact up to 40 entrepreneurs on the phone to probe more deeply into the issues they identified in the survey.

3. From the primary interview findings, the OBCG team will build the three most revealing personas to provide a personal face to the entrepreneurs and their story.

TimelineThis project began on October 9, 2016 and a presentation of the findings was given on Friday December 2nd. This follow-up report was submitted on December 16th.

Project Scope and Process

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Project Scope and Process

Analysis

Interviews

Survey Distribution

Survey Creation

Pres

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The Oregon Business Consulting group worked closely with Oregon BEST to create a shareable Needs Assessment Survey for Oregon Entrepreneurs.

This survey was distributed via email outreach by partnering resource partners found within the networks of Oregon BEST and the University of Oregon as well as through general request.

Survey respondents amenable to a thirty minute interview were contacted via a provided email address after the completion of the survey.

Survey data and interview insights were aggregated to provide insights into the needs of entrepreneurs.

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Nebraska - Rural Affairs - 2014 (pg 6)● Responses: 497● Target: rural small businesses● Comprehensive needs assessment● Interviewed by team

San Francisco - UC Berkeley - 2010 (pg 7)● Responses: 175● Interviews: 27● Target: small business owners, merchant

organizations, etc.

Oregon - University of Oregon - 2012 (pg 8)● Focus: access to capital and regulation● Target: economic development

specialists

Past Surveys UtilizedPast Surveys Utilized

Vermont - VSBDC - 2016● Responses: ongoing● Focus: marketing, computer systems,

business management, finance

Philadelphia - Maker Group - 2016● Responses: ongoing● Focus: education and networking

events

Texas - SBDC - 2015● Responses: 1,403 ● Focus: financial needs

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Nebraska - Rural Affairs - 2014

Methodology and Responses: Survey focused on reaching rural small businesses in Nebraska. Of the 497 respondents, 42 were Spanish speakers, 232 were Small business owners, 38 were aspiring business owners, 35 were lenders, 127 were service providers and 65 classified themselves as “Other”.

General Findings: One of the key findings was that over 50% of business owners make less than $100,000 in gross revenue. Working capital was the primary challenge for rural small businesses; Business succession was a main issue due to the age range of most rural business owners.

Past Surveys Utilized - NebraskaPast Surveys Utilized

Questions Pulled: Part-time vs full time employmentRanges of financial needVarious areas of expertiseTechnology areasLegal areas

Interview with Author Dena BeckDena provided a lot of practical advice on varying topics including how long to leave the survey open, how to distribute the survey, and how to handle legal disclaimers and assurances of confidentiality. She also taught us that changing the phrasing of personal demographic questions can help improve response rates, such as age, for which we were able to get a 100% response rate.

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San Francisco - UC Berkeley - 2010

Methodology and Responses: Survey focused on reaching small business owners; merchant organizations; neighborhood groups and Economic development agencies. Done by means of conducting direct interviews with 29 stakeholders of a variety of backgrounds; a focus group and a direct survey of small businesses (175 respondents).

General Findings: The survey concluded that access to technical assistance, access to capital and commercial corridor revitalization were main barriers for San Francisco small business owners. As a result, we considered these key areas of interest when crafting our own survey.

Past Surveys Utilized - San FranciscoPast Surveys Utilized

Questions Pulled: Types of financial relationships (loans, grants,etc.)Technical assistance areas (areas of expertise)Individual role at businessZip code

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Oregon - University of Oregon - 2012

Methodology and Responses: Survey of economic development specialists statewide to assess economic development needs. Asked specifically about key assets and key barriers to economic development. They received 80 complete responses.

General Findings: Discovered several key assets for economic development including availability of labor, organization/program support from state, and infrastructure. Key barriers were also noted, including land use regulations, permitting processes, family wage jobs, affordable housing, and access to capital. From this came a focus for technical assistance and organizational coordination to promote economic development.

Past Surveys Utilized

Questions Pulled: Access to capitalRegulatory frameworkSpaces and logistics including infrastructure and landKey resource partners

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Past Surveys Utilized - Oregon Economic Development Specialists

Survey Questions

Beginning with a large bank of questions pulled from past needs assessments and other business surveys, our team worked with Oregon BEST to consolidate, refine, and eliminate questions in order to optimize both the breadth and depth of our understanding of participants’ needs. The survey begins by collecting demographic information on both the individual responding to the survey as well as the organization they are representing. The survey then collects information on the financial need of the organization, its relationship with various small business resource partners, and various barriers to profitability.

The survey then utilizes a matrix style question format within our chosen survey platform Qualtrics to have entrepreneurs classify their needs for an exhaustive list of areas of expertise, spaces, and logistics. Needs were classified as either a ‘current unmet need’, ‘past need that was satisfied’, ‘past need made do without’, or ‘never a need’. Using question display logic, follow up questions such as how an entrepreneur would like assistance with their need for sales expertise, or how an entrepreneur satisfied a need for a maker space in the past were asked only to those survey respondents for whom the question was relevant.

The survey ended with three open ended questions asking entrepreneurs what their biggest current need was, their anticipated biggest future need, and what they would change about their internal organization or external environment if they had a magic wand.

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● IND Age● IND Education● IND Language● IND Role in Business● IND Ownership Minorities● ORG Age● ORG Stage● ORG Industry● ORG # Employees● ORG Zip codes

Survey Questions - ListDemographics (10 Qs) Partners (2 Qs)

Profitability (1 Q)

● Business Oregon● Incubators● Micro Business Development Programs● Small Business Association● United States Department of Agriculture● SCORE● Chambers of Commerce● SBDCs

● Access to Capital● Cashflow● Changes or Updates in Technology● Competitive Landscape● Cost of Capital● Cost of Wages and Benefits● Finding and Retaining Qualified Labor● Market Demand● Restrictive Business Regulations● Taxes

Finances (5 Qs)

● Need (Y/N)● Amount● Drivers of Expenses (open)● Relationships Used● Relationships Wanted

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● How did you satisfy your need for ____?

List of Areas of Expertise● Entrepreneurship / Business Planning● Proof of concept / Prototyping● Research and Development● Manufacturing● Technology● Financial Management● Bookkeeping● Employee Hiring / Training / Management● Customer Service● Sales● Marketing / Branding / PR● Scaling / Supply Chain Management● Legal / Regulatory Compliance● Human Resource Compliance● Taxation

Classified as● Current Unmet Need● Past Need that was Satisfied● Past Need Made Do Without● Never a Need / Not Applicable

Survey Questions - ListAreas of Expertise (AOE) (36 Qs) AOE Manner (...)

AOE Specific Needs (...)

Manners in Which They Would Like to Receive Assistance● Addition to the Core Team● Addition to the General Employment Staff● Through Mentorship● Through Training Services● Through an Outside Service

● Proof of concept / Prototyping● Manufacturing● Technology● Marketing / Branding / PR● Legal barriers● Legal sources

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AOE Satisfied (...)

● Office Space● Lab / Workshop● Collaborative Maker Space● Available Commercial Land● Available Commercial Buildings● Improved Utility Access / Capacity● Improved Road Network● Access to Shipping Networks

Survey Questions - ListSpaces and Logistics (SPACES) (13 Qs) SPACES Satisfied (...)

SPACES Specific Needs (...)

● How did you satisfy your need for ____?

● Office Space● Lab / Workshop● Collaborative Maker Space● Access to Shipping Networks

Open Ended Questions (3 Qs)

● What is your biggest current need?● What do you anticipate will be your biggest need in the future?● If you could wave a magic wand to change one aspect of your

internal organization or external business ecosystem, what would it be?

70 Total Questions

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Survey Distribution

This survey was distributed via email outreach by partnering with resource partners found within the networks of Oregon BEST and the University of Oregon as well as through general request. Resource partners were asked to distribute the anonymous survey link to their network of entrepreneurs in exchange for access to the survey’s aggregated data. Many resource partners were solicited from within the extensive network of Oregon BEST (BEST). Some survey responses were also acquired by sending the survey link to entrepreneurs within the personal networks of members of the Oregon Business Consulting Group team (OTHER). Basic request emails were also sent to resource partners around Oregon including Chambers of Commerce (COC), Community Development Financial Institutions (CDFI), and Small Business Development Centers (SBDC). The table below details how many survey responses were provided by the various avenues of outreach. Outreach through the Oregon BEST network of resource partners brought in the vast majority (111) of responses.

The visualization on the following slide breaks down these distribution numbers by the age and business stage of the represented organization. Outreach through Chambers of Commerce proved effective at reaching companies in the viability stage, many of which were over 16 years old. Outreach through the Oregon BEST network of resource partners proved very effective at capturing a large number of responses from the four earlist business stages.

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Survey Distribution

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Region Overview

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Region Overview - Heat Map of Responses

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Region Overview - Heat Map of ResponsesZoom-In Portland Zoom-In Eugene

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Region Overview - Industry Breakdown by Region

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The industry and region drill down chart to the left shows which regions contain businesses from the different industries. Only one consumer goods company was surveyed in the Portland Metro area, less than the eight surveyed across Central, Coastal, and Eastern Oregon. All but one of the natural resource companies surveyed were located in the Willamette Valley

Region Overview - Resource Partner Networking Needs by Region

Lower population areas need to be connected with resource partners

The following chart illustrates how an entrepreneur’s region might affect their desire or ability to work with resource partners. The bars represent the average number of resource partners entrepreneurs of a certain region “would like to work with”. The 8 listed resource partners were Business Oregon, Incubators, Micro Business Development Programs, the Small Business Association, the United States Department of Agriculture, the Service Corp of Retired Executives, Chambers of Commerce, and Small Business Development Centers.

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Region Overview - Access to Shipping Networks Needs

Eastern and coastal companies need access to shipping networks

The following chart illustrates the proportion of entrepreneurs who indicated access to shipping networks as a current unmet need across the varying regions. While the sample size for some of the regions is small (see slide #15), there was a clear need indicated by the respondents from Coastal and Eastern Oregon.

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Annual Survey of EntrepreneursIn order to better understand how our survey’s sample of entrepreneurs might differ from the entire population of entrepreneurs in the State of Oregon, our team designed our survey so that several demographic and profitability barrier questions could be compared back to identical questions asked in the Annual Survey of Entrepreneurs.

The Annual Survey of Entrepreneurs was Conducted in 2014 by the United States Census Bureau. Responses are mandatory for companies that:

● File an IRS tax form● Are non-farm● Have sales receipts of over $1,000● Have at least one paid employee (can include single owner)

With responses from Oregon totalling 84,159, our team has made theassumption that the census reflects the actual population of entrepreneursin the state, and that comparison to its data is a comparison to thepopulation of entrepreneurs in the state of Oregon.

Comparison to U.S. Census

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Survey respondents were younger than the census

On average, our survey respondents’ businesses were relatively new compared to the census, proportionally beating the census in every category except 6-15 years. We targeted these younger stage businesses due to the needs they may have and their relevancy to Oregon BEST.

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Years in Business


Due to the fact that survey respondents’ businesses were younger, they typically had fewer employees as well. 48% of our survey respondents were fewer than 4 years old. Number of employees was well represented in comparison to the census, which is a good determinant of the survey having relatively little bias.

Size was well represented

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Number of Employees


Negative Impacts on Profitability

In regards to negative impacts on profitability, 46% of survey takers claimed to have an issue with access to capital, compared to only 7% in the census. Why is there a discrepancy? For the 59 survey respondents who suggested Access to Financial Capital is a negative barrier to profitability, 52% of them were fewer than 3 years old. The difference may be explained by the, on average, younger age of businesses in the project survey.

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Age of Owner

The project survey was more diverse in regards to age, especially among younger business owners. 58% of census respondents were over the age of 55 while only 36% of project survey respondents were older than 55. Likewise, 29% of census respondents were younger than 44; 39% of project survey respondents were younger than 44.

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Women were well represented

Diversity

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The survey was relatively diverse compared to the census, especially among female owned businesses, who made up 35% of project survey responses, compared to 21% of census respondents. The project survey was also within 5% of the census in the categories “minority” and “veteran”.

Industry Overview

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The chart below breaks down the specific industries represented by survey respondents. Some of the industries below were provided as potential answers, while others were added through the ‘other’ option. The following slide lists out how these specific industries were sorted into a six different industry classifications.

Industry Overview - ClassificationHard Tech

Soft Tech

ServicesNatural ResourcesConsumer Goods

Travel

● Food & Beverage● Retal● Footwear /

Apparel / Outdoor Sports

● Clean Technology● Manufacturing● Energy● Electronics &

Components● Stormwater● Utilities

● Farming / Fishery / Forestry

● Professional Services

● Healthcare / Life Sciences / Social Assistance

● Education● Real Estate● Beauty &

Personal Care● Construction● Financial /

Insurance● Transportation

and Warehousing● Landscaping● Maintenance

Services● Tradeshow

● Arts, Entertainment and Recreation

● Hospitality

● Software and Internet

● Mobile Apps

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Industry Overview - Classification

The Industry Classification Count chart below breaks down the number of survey responses whose organization (ORG) operates in each industry category. The largest number of survey responses (71) came from the service industry, while the second most (40) were involved in hard technology.

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The industry and region drill down chart to the left shows which regions contain businesses from the different industries. Companies involved in hard technology came from four of the seven different regions including Central and Eastern Oregon.

Industry Overview - Industry and Region Drill Down

Industry Overview - Hard Tech

The chart to the left shows the sum of current unmet needs for the following Specific Manufacturing areas:

● Systems design● Product Design● Contract/Toll

Manufacturing

Theses sums are plotted across Financial Need and Organization Stage, and are grouped by and color coded by industry classification.

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The chart to the left shows the sum of current unmet needs for the following specific Prototyping / Proof of Concept areas:

● Tools● Equipment● Expertise

Theses sums are plotted across Financial Need and Organization Stage, and are grouped by and color coded by industry classification.

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The chart to the left shows the sum of all the areas of expertise the entrepreneur classified as a need they ‘made do without’. The hard technology industry has the highest number of expertise areas that were worked through without being ‘satisfied’. It has the highest count in all of the organization stages except for ramp-up. It is especially high in the viability stage, where over 45 instances of expertise need went unserved.

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Stage Overview - Table of Contents

(50) Ramp-up

(44) Launch

(40) Customer Discovery

(36) Concept Development

The bars to the left provide the starting page for in-depth looks at the four earliest organization stages as defined by our survey. These in-depth looks begin with an overview of the stage that includes its definition and a breakdown of both the age and industry makeup of the survey respondents who identified themselves as within the stage in question. They then move into various visualizations of survey data with descriptions of the variables involved and the key takeaway.

The following slide provides an overview of the business stages including their definition and representation in the primary research.

Stage Overview

Concept Development Research and proof of conceptResponses: 19Interviews: 0

Customer DiscoveryTesting business models and markets

Responses: 17Interviews: 1

Launch Sales/production underway but still mostly pre-revenue


Ramp UpGrowing sales, cash-flow still a barrier


ViabilityRegular customers, normal sales cycle


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Stage Overview - Concept Development

Occurs within the first 2 yearsOccurs in the first two years

Research and Proof of ConceptAn Entrepreneur must first research their offering and provide proof that, as a concept, it can work. We surveyed 19 individuals within this Concept Development stage and noted that the majority of them are in this stage for less than two years. This indicates that the Concept Development is a young stage that is very temporary for businesses.

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Peak needs include proof of concept, prototyping, research and development

The two charts below show the proportion of entrepreneurs with current unmet needs for expertise with proof of concept and research and development across the five business stages. These charts demonstrate that businesses within Concept Development require these two areas of expertise more than businesses in more advanced stages. This is relatively intuitive since the definition of the stage is ‘research and proof of concept’.

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Bookkeeping expertise is wanted in the core team during concept development

Manner of receiving bookkeeping

The chart below breaks down the manner in which companies want to receive assistance with bookkeeping across the five business stages. Companies within the Concept Development Stage are more willing to add bookkeeping assistance through an addition to the core team as opposed to through training programs or an outside service.

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Manufacturing need is highest during concept development

For Concept Development companies, manufacturing expertise is in high demand. Since businesses are just beginning, the manufacturing demand could be due to a lack of connection with manufacturers.

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Testing business models and markets

Occurs within the first 2 yearsOccurs within the first 2-3 years

The customer discover stage, second after concept development, was defined by the survey as testing business models and markets. Only 17 organizations identified as being in this stage. The age breakdown to the right shows that none are older than 3 years, while the industry breakdown below shows a mix of all industries with a large number of soft tech companies.

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Stage Overview - Customer Discovery

Areas of expertise related to human resources peak as needs during customer discovery

The following charts illustrate the proportion of entrepreneurs who indicated a current unmet need for expertise in employee hiring, human resource compliance, and customer service. Many areas of expertise, including these three that focus on human resources and training peak during the customer discovery phase.

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Areas of expertise related to management peaked as needs during customer discovery

The following charts illustrate the proportion of entrepreneurs who indicated a current unmet need for expertise in bookkeeping, scaling, and financial management. Many areas of expertise, including these three that focus on management peak during the customer discovery phase.

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Capital needs are less frequent during customer discovery

The following chart visualizes the proportion of entrepreneurs who have a capital need (Yes, No, Unsure)across the different business stages. The customer discovery stage jumps out as the only one (apart from the viability stage) where the majority of survey respondents were unsure or had no financial need.

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Occurs within the first 2-4 years

Sales/production underway but still mostly pre-revenueLaunch stage businesses made up the third largest portion of responses with 40 responses. These businesses had a fair distribution between several industries. Usually businesses in this stage are still on the younger side, but it may take longer to get to/get out of this stage.

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Stage Overview - Launch

Sales need for all surveyed

Launch stage companies need sales expertise

This chart illustrates the level of current need for sales expertise in the launch stage, showing that many, in fact the majority of launch stage businesses need sales expertise.

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Launch stage companies with high financial needs especially need sales expertise

This chart compares the need for sales expertise across stage for businesses with a financial need of $1M or higher. It demonstrates that, particularly in the launch stage, sales expertise is a common current unmet need. Sales expertise is also needed in later stages, but not as frequently as in the launch stage.

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The chart below breaks down the manner in which companies want to receive assistance with sales expertise across the five business stages. It shows that especially in the launch stage, an addition to the core team and general employment staff is the most prefered method of acquiring sales expertise.

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Launch stage companies need sales staff

The need for technology expertise grows during launch

The chart below shows the proportion of entrepreneurs with a current unmet need for technology expertise across the five business stages. The need for technology peaks proportionally during the launch stage, perhaps due to the technology needs that arise when establishing the production and operations of the company.

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Access to equipment becomes a need at launch

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The chart below shows the proportion of entrepreneurs with a current unmet need in regards to accessing equipment. It can be hard to make conclusions due to the small sample size (9) of organizations with this unmet need, but this may suggest that entrepreneurs are willing to make do with the equipment they have until its time to actually launch the business.

Occurs within years 2-8

Growing Sales, cash-flow still a barrierThe ramp-up stage was well represented with a total of 51 survey responses across all six industry categories. The ramp-up stage had the most diverse range of organization ages as shown in the chart to the right. The ramp-up stage seems to occur, on average, anytime within years 2-8.

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Stage Overview - Ramp-Up

Ramping up brings back a need for planning

During the ramp up stage, we see a hike in the need for Business Planning. We believe at this stage, business owners will go back to the drawing boards as far as planning how they want to take the business to the viability stage to become a mature company.

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Satisfying the need for marketing might signal a transition to the viability stage

Another common area of expertise needed is marketing, branding, and public relations. This area of expertise is one of the most prevalent, with over 30% of respondents in all four early stages indicating it as unmet. The drop off for this need after the ramp-up stage could suggest that satisfying a need for marketing expertise signals a transition into the viability stage.

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Barriers to capital grow as the financial need increases

This chart demonstrates that as financial need increases, so too does the likelihood that entrepreneurs indicate ‘access to capital’ as a barrier to profitability. In fact, this resembles a positive linear correlation.

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Entrepreneurs with high capital needs seek venture capitalists and angel investors

This chart shows the desired sources of funding for businesses with a financial need of $1M or larger. Entrepreneurs with higher funding needs seek to obtain funds from VC firms, Grants, and Angel Investors.

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Appendices

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Appendices

(89) Financial Needs (All vs Users of Venture Capital)

(85) Resource Partner Classification

(72) Manner of Receiving Expertise Over Stage

(56) Proportion of Current Unmet Need vs Stages

Appendix - Proportion of Current Unmet Need vs Stages

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ORG Stage vs Manner of Receiving Bookkeeping ExpertiseAppendix - Manner of Receiving Expertise Over Stage

ORG Stage vs Manner of Receiving R&D ExpertiseAppendix - Manner of Receiving Expertise Over Stage

ORG Stage vs Manner of Receiving Proof of Concept Expertise

Appendix - Manner of Receiving Expertise Over Stage

ORG Stage vs Manner of Receiving Marketing ExpertiseAppendix - Manner of Receiving Expertise Over Stage

ORG Stage vs Manner of Receiving Manufacturing ExpertiseAppendix - Manner of Receiving Expertise Over Stage

ORG Stage vs Manner of Receiving Regulatory Compliance Expertise


ORG Stage vs Manner of Receiving HR Compliance ExpertiseAppendix - Manner of Receiving Expertise Over Stage

ORG Stage vs Manner of Receiving Entrepreneurship Training Expertise


ORG Stage vs Manner of Receiving Employee Hiring Expertise


ORG Stage vs Manner of Receiving Customer Service Expertise


ORG Stage vs Manner of Receiving Scaling ExpertiseAppendix - Manner of Receiving Expertise Over Stage

ORG Stage vs Manner of Receiving Sales ExpertiseAppendix - Manner of Receiving Expertise Over Stage

ORG Stage vs Manner of Receiving Technology ExpertiseAppendix - Manner of Receiving Expertise Over Stage

Resource Partners - Combined DataAppendix - Resource Partner Classification

Resource Partners - Would Like to Work WithAppendix - Resource Partner Classification

Resource Partners - Worked with in PastAppendix - Resource Partner Classification

Resource Partners - Don’t Know Enough AboutAppendix - Resource Partner Classification

Financial Need (All)

Financial Need (Venture Capitalists Used)

Venture capital users have higher capital needs

Appendix - Financial Needs (All vs Users of Venture Capital)

Oregon Entrepreneurs Needs Assessment - Final Book

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