Entrepreneur's Handbook
CREATING VALUE IN ENTREPRENEURSHIP
As seen in the case study, the perception of earning a lot of money in a short time as an indicator of success in society also negatively affects expectations about entrepreneurship. This perception, which is common in countries that have not completed their development, causes the main focus of the entrepreneurship adventure to be reduced to the dimension of just making money, which causes failure in the medium and long term. For this reason, the primary aim of the department is to ensure that the concept of entrepreneurship is placed in the minds. The frame we draw in our mind about entrepreneurship at the beginning stage will be the most important determinant of how we will be an entrepreneur.
The most important and fundamental difference that separates good and bad entrepreneurs is about to what extent the expectations of their stakeholders are met. Figure 1.1 shows the stakeholders of the business and their value relations. The venture (business) established by an entrepreneur has three main objectives. These can be summarized as profit making, survival (sustainability) and growth. In order for the venture to achieve these commercial objectives, it must provide satisfaction to its customers through the products and services it offers. Therefore, the products and services that will gain the appreciation of the customers will be demanded in the market to the extent that the entrepreneur offers his products and services better or differently than his competitors. In line with this demand, it will be able to continue its activities, gain profit and grow. Therefore, the indispensable condition of a good venture is to gain the appreciation of its customers through the product and service it produces.
Of course, the business has to cooperate with a number of individuals and institutions while meeting the expectations of its customers. These individuals and institutions, called the stakeholders of the venture, consist of shareholders, employees, suppliers, distributors, the state and nature. Without these stakeholders, no business can meet the expectations of its customers. For this reason, the entrepreneur must establish a system that will meet the expectations of these stakeholders. Of course, the expectations of these stakeholders from the venture are different from each other. A shareholder will want to give out the capital required for the venture at a good dividend, while an employee will agree to work for a good pay to ensure the venture achieves its goals. Similarly, the state will require this venture to act in accordance with the rules and pay taxes. VALUE SOCIETY Profit Target Audience Growth Sustainability Stakeholders Internal Goals of the Venture Client Financier Employee Supplier Distributor State Expectations of Nature High monetary value High profits Good salary and working conditions Profitable relationships Profitable relations Compliance with taxes and rules Transfer to future generations. The suppliers that provide the inputs that the venture uses to produce products and services are also entrepreneurs, and they participate in the activities of the venture with expectations such as profit. Therefore, the main task of the entrepreneur is to create a business that can best meet the expectations of stakeholders who have conflicting goals in order to provide products and services to their customers. In other words, the entrepreneur is obliged to establishing a system that meets the expectations of the customer while meeting the expectations of other stakeholders in the best way.
The only way to do this is to increase the value expressed by products and services for all these stakeholders. Indeed, ventures create value for customers, shareholders, employees and society, and the greater the value they create, the more the venture will achieve its goals. In other words, reaching the internal goals of the venture such as profit, growth and sustainability is related to the size of the created value. The way to increase this value created by the venture is to make innovations that will reveal new or different products and services from their competitors.
The extent to which the products or services offered by the venture are better quality, cheaper, different, etc., the more they will be preferred and the business will sell more, profit and grow. The more profitable business will share this profit (value) with its stakeholders. Thus, the employee will be the one whose expectations are better met and the more earning; the shareholder will have the largest share; the supplier will be the willing party to make the venture successful, and the winner will be the whole segment of society. Therefore, the entrepreneur who does his job well is the person who innovates to meet the expectations of his stakeholders at the highest level. The welfare of a society with such entrepreneurs will be high. In short, it is possible to define a good entrepreneur as the person who creates value for the stakeholders of the venture by bringing together the resources he needs to produce a product or service in a way that creates the highest value. Therefore, the most important responsibility of the entrepreneur to make his business successful is to innovate.
The definition given here emphasizes the characteristic of the entrepreneur, which is separated from the most basic and production factors. Indeed, the entrepreneur will make more sales and earn income to the extent that he makes a difference from his competitors, or more precisely, he creates innovation while presenting a product and service. In summary, the entrepreneur's journey of innovation will never end and will open up to new horizons continuously.