source is whether any potential bias or hidden agenda has influenced the data. Imagine that you search for data on cigarette sales to minors. You find several studies on the issue, drawing quite different conclusions. Which source do you believe offers the most reliable data?
■ A government agency
■ A tobacco industry association
■ An antismoking advocacy organization
■ A private, for-profit research company
■ A university research study
Any one of these sources might have an agenda other than simply reporting the facts. For instance, though both the tobacco industry association and the antismoking organization might have special expertise on the topic of cigarette sales, their particular points of view could lead to inherent bias in their research results. The private, for-profit research company may well be conducting the study for a client with a special interest in the issue (such as the tobacco industry), and this could also skew the results.
Check the time
It’s important to look not only at how recent the data is but also at the time period the data covers. For instance, here are two headlines adapted from real newspaper stories reporting on the same study:
■ “VC funding falls to 7-year low”
■ “VC funding increases by 7 percent”
Both headlines were completely accurate. Both reported on the same study. Yet the first focused on data for only one quarter of the year; the second article reported on the total amount of funding for the entire year compared to the year before. So look for data that covers reasonable time periods.
Remember, the types of questions a researcher asks, the size of the survey sample, the composition of those surveyed, and the methodology for compiling the data can all dramatically influence the results produced.
Generally, the most accurate sources are:
■ Government data. Data from government sources, particularly from the U.S. Census Bureau, is generally regarded as fairly accurate, as it’s drawn from large samples. Also, it’s expected that such data is free from inherent bias.
■ Private research company data. Private research companies charge large sums of money to gather data relating to an industry. Since their primary income derives from the sale of such data, its accuracy directly relates to their ability to stay in business.
■ Studies conducted by universities. Generally, studies conducted by university faculty and researchers are highly regarded. Such studies typically undergo academic review and likely follow accepted research procedures. Ideally, such studies are relatively free of bias.
■ Studies using large samples. The greater the number of respondents, the more likely the information they supply reflects reality.
THE GOOD VS. THE BAD
| GOOD SIGNS | BAD SIGNS |
| Data was collected by an independent research firm | Study was funded by a private company or association with a political or profit agenda |
| Large sample size | Small sample size |
| Large percentage of those polled responded | Small percentage responding |
| Objective, neutral questions were asked | Questions were skewed to elicit particular responses |
In many situations, finding information about the methods used to collect data can help you evaluate its credibility. For instance, trade associations may be an excellent source of data, since many of them collect information about their own industries. Still, this data may be either highly reliable (when it comes from those associations that are careful and objective in their research) or highly unreliable (when, for example, an association uses data for political or marketing purposes).
Data with an agenda
Be particularly cautious when evaluating data from certain types of sources. This can include:
■ Statistics from individual companies, which may have manipulated data to increase sales
■ Data from politically or economically motivated organizations, which may have had a special agenda and used research techniques that support the message they want to send
■ Data from studies with very small samples, which may not represent reality
Organize Your Data and Avoid Plagiarism
As you comb through dozens of databases and various resources looking for the information you need, you’ll find you may lose track of where you spotted a particular statistic. So, when you’re ready to prepare your business plan, marketing strategy, or business proposal, you may discover you have no idea of the source of some of your data. This can create some very unfortunate results.
Readers of business plans and other business documents will want to know the sources of the information in your work. They may question you about your conclusions, therefore you need to be able to cite the sources of your data. Many entrepreneurs have had their business plans rejected by investors because they couldn’t support claims about the size of their market or their potential profit margins.
Appropriate citations are particularly important in academic papers. Plagiarism can result in your failing a class or facing disciplinary action. The business world, too, views plagiarism as a sign of untrustworthiness. Potential investors or partners will avoid doing business with you if they suspect you of such behavior. Even when no one suspects you of behaving unethically, failure to keep track of your sources is sloppy—and dangerous.
To avoid these types of problems, carefully organize your findings, and always note sources and resources while doing your research. As you collect data, be certain to note where you found it, the source of the data, the URL of the website and access date (if you found it on the Web), or the database, book, or research report it’s from.
See page 73
ENTREPRENEUR’S WORKSHEET
Organizing Data Sources
As you do your research, use this worksheet to organize your research sources.
challenge
Remain at the top of an industry in the face of fierce competition and a volatile global economy
solution
Carefully research every aspect of customers and industry
REAL-WORLD CASE
Luxury Doesn’t Just Happen: The Ritz-Carlton Hotel Company
The president of the United States gives only one award for quality in business—the prestigious Malcolm Baldrige Award. So it’s a