Chapter-2

Starting the venture

The awareness of using creativity more in entrepreneurship in as much as science, art and many
areas of life started to take place. There are even people who claim that business is the main area
that creativity is used most. Creativity started to be perceived as the most striking and most
demanded ability in order businesses to be established healthily maintain its life in a healthy
way. As if mankind started to recreate the creativity. Today, entrepreneur candidates and
businesses started to ask how they can think up a creative idea anD how they can increase
creativity and tried to come up with an answer. By understanding the importance of creativity,
some societies started to mention how they did not notice that before, why they rusted the
creativity of their people, what to do to increase creativity. Today, mankind started to understand
how valuable and important an idea is. With increasing and changing problems in every
dimension, it is understood that today's problems cannot be solved by yesterday's ideas. For this
reason, the need for creativity started to increase day by day. Innovative businesses that aim to
solve problems with their products and services, understood that they have to be different in
order to be strong against increasing competition and stay out of the competition and this could
only be possible with creativity. They try to provide competitive advantage by giving importance
to this subject before rivals. As well as settled businesses in the market, businesses that try to
come onto the market need to find creative ideas and develop them in order to be established
healthily and strong and maintain their permanence. Today, like yesterday, even tomorrow,
businesses will always need new ideas at the beginning or next stages. As long as they need new
ideas, they will have to be creative. This creativity will continue not intermittently but in a
sustainable way as well. As creativity increases, the need for creativity will increase and
businesses will be more creative than previous periods.

Business Idea

The ideas that provide value for the customer, profit for the entrepreneur and benefit for society
and can be transformed into products of services are called business ideas. Business ideas that
will sustain the customer, society and entrepreneur have the ability to meet a lot of requirements,
and solve problems. A business idea is the first step and the beginning of a business. A business
idea is people oriented. People have various needs and problems. As people solve their problems,
meet their needs, their lives get easier. The needs that are not met and unsolved problems make
people's lives difficult. Making people's lives easier presents certain prosperity level. There is an
order of importance of people's needs and problems that changes all the time. Because
technological, economical, social and cultural changes also change this order. The order that
arise from this change reveals opportunities and opportunities reveal business ideas. In that case,
it is necessary to perceive and understand signals for change in order to find business ideas and
grab opportunities and change these opportunities to business ideas. Under the circumstances
when entrepreneurs and businesses do not understand the sectors and markets which are always

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in an evolution, they start to miss the opportunities. Entrepreneurs that know where change is
coming from and notice opportunities and wave before their rivals will grab growing needs
before anyone else. There is no doubt that this condition that includes trends can not be easily
noticed by everyone. What entrepreneurs that do not foresee this condition will be different from
their customers’ will, needs and problems. The most wanted thing for entrepreneurs is what they
want to do and what their customers want to be the same, in fact what entrepreneurs want to do
to exceed what customers expect.

There is no doubt that every opportunity includes certain levels of risk. Every entrepreneur's risk
taking range is different. Sometimes risk may not be measured correctly. In this case, free
markets where others fear to take risks are turned into profit by entrepreneurs who can take risks.
Every product and service produced as a business idea, always meets a need, solves a problem. If
a product or service meets a need, solves a problem, it is beneficial. The benefit discussed here is
the one mentioned in economic theory. In economics, benefit is defined as "the feature of
necessity to goods or services and meeting needs is called benefit". The benefit provided from
produced goods and services is both for the customer and the entrepreneur

Steps of the Creative Problem-Solving Process

Training oneself to think like an entrepreneur means learning the steps to evaluating a challenge:
clarify, ideate, develop, implement, and evaluate.

Step 1: Clarify

To clarify is the critical step of recognizing the existence of a gap between the current state and a
desired state. This can also be thought of as having need awareness, which occurs when the
entrepreneur notes a gap between societal or customer needs and actual circumstances.
Clarifying the problem by speaking with clients and developing a detailed description of the
problem brings the specifics of a problem to light. Failure to identify the specifics of a problem
leaves the entrepreneur with the impossible task of solving a ghost problem, a problem that is
fully unknown or unseen. To establish and maintain credibility, an entrepreneur must clarify the
problem by focusing on solving the problem itself, rather than solving a symptom of the
problem.

Step 2: Ideate

To ideate is the step of the creative problem-solving process that involves generating and
detailing ideas by the entrepreneur. After collecting all information relevant to the problem, the
entrepreneur lists as many causes of the problem as possible. This is the step in which the largest

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variety of ideas are put forth. Each idea must be evaluated for feasibility and cost as a solution to
the problem. If a farm does not have clean water, for example, the entrepreneur must list causes
of toxic water and eliminate as many of those causes as possible. The entrepreneur must then
move forward investigating solutions to bring the water back to a safe state. If, say, nearby
livestock are polluting the water, the livestock should be isolated from the water source.

Step 3: Develop

To develop is the step in which the entrepreneur takes the list of ideas generated and tests each
solution for feasibility. The entrepreneur must consider the cost of each idea and the obstacles to
implementation. In the preceding example, adding a chemical to the water may not be a feasible
solution to the farmer. Not every farmer wants additional chloride or fluoride added to the water
due to the effect on both humans and livestock. These tradeoffs should be addressed in the
feasibility assessment. The farmer might prefer a filtration system, but the cost of that solution
might not be practicable. The entrepreneur should identify and assess alternative solutions to find
one that is most cost-effective and feasible to the customer.

Step 4: Implement

To implement is the step in which the solution to the problem is tested and evaluated. The
entrepreneur walks through the planned implementation with the client and tests each part of the
solution, if a service, or thoroughly tests a developed good. The entrepreneur implements the
solution and goes through a structured system of follow-up to ensure the solution remains
effective and viable. In the water example, the solution would be reducing runoff from toxic
insecticides by adding prairie strips, buffers of grass, and vegetation along banks of streams.

Step 5: Evaluate

To evaluate is the step in which the final solution is assessed. This is a very important step that
entrepreneurs often overlook. Any fallacy in the implementation of the product or service is
reassessed, and new solutions are implemented. A continual testing process may be needed to
find the final solution. The prairie strips, buffers of grass, and vegetation along banks of streams
chosen in the farming water example should then be analyzed and tested to ensure the chosen
solution changed the content of the water.

MICRO ELEMTS OF BUSINESS:

Customers and Consumers

Customers are people who buy an organization’s products/services. In simple words, an

organization cannot survive without customers. A consumer, on the other hand, is the ultimate user
of the product/service.

For example, a husband might purchase a product for his wife. In this case, the husband is the
customer and the wife is the consumer.

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A successful business keeps a close watch on both customers and consumers of its
products/services. It must monitor and track any changes in tastes and preferences of the consumer
along with changes in the buying habits of the customer.

Competitors

Every business has competition. Competitors are other organizations that compete with each other
for both resources and markets. Hence, it is important that an organization is aware of its
competitors and in a position to analyze threats from its competition. A business must be aware of
its competitors, their strengths and weaknesses, and the most aggressive and powerful competitors
at all times.

Further, an organization can have direct or indirect competitors. When organizations are involved in
the same business activity, they compete for both resources and markets. This is Direct
Competition.

For example, Pantene and Sunsilk shampoo companies are direct competitors. On the other hand, a
five-star holiday resort and a luxury car company are Indirect competitors since they offer different
products but vie for the same market.

Organization

One of the most important aspects of the micro environment of an organization is the self-analysis
of the organization itself. It must understand its own strengths and weaknesses, objectives and goals
of the business, and resource availability. The following non-specific elements of an organization
can affect its performance:

 Owners – People who have a major shareholding in the organization and have vested
interests in the well-being of the company.

 Board of Directors – The board of directors is elected by the shareholders for overseeing the
general management of the business and ensuring that the shareholder’s interests are met.

 Employees – People who work in the organization are major contributors to its success. It is
important that all employees embrace the organization’s goals and objectives.

Market

The market is much more than the sum of all the customers. The organization must study the market
in terms of its actual size, the potential for growth, and its attractiveness. Some important issues are:

 The cost structure of the market

 Price Sensitivity of the market

 Technological structure of the market

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 The existing distribution system of the market

 The maturity of the market

Suppliers

Suppliers are another important component of the micro environment. Organizations depend on
many suppliers for equipment, raw material, etc. to maintain their production. Suppliers can
influence the cost structure of the industry and are hence a major force.

Intermediaries

Intermediaries are also a major determining force in business. Most customers are unaware of the
manufacturer of the products they buy since they approach retailers, departmental store, chain
stores or online stores for their purchases.

What is a PESTEL Analysis?

A PESTEL analysis is a framework or tool used to analyse and monitor the external environment
factors which have an impact on an organisation. The result of which is used to identify threats
and weaknesses, strengths and opportunities which can be considered or used in a SWOT
analysis.
What does PESTEL mean?
PESTEL is an acronym which stands for the different factors used in analysing the impact of the
external environment. It stands for:
P – Political
E – Economic
S – Social
T – Technological
E – Environmental
L – Legal

Political Factors
These are all about how and to what degree a government intervenes in the economy. This can
include – government policy, political stability or instability in overseas markets, foreign trade
policy, tax policy, labour law, environmental law, trade restrictions and so on. It is clear from the
list above that political factors often have an impact on organisations and how they do business.
Organisations need to be able to respond to the current and anticipated future legislation, and
adjust their approach and policy accordingly.

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Economic factors have a significant impact on how an organisation does business and also how
profitable they are. Factors include – economic growth, interest rates, exchange rates, inflation,
disposable income of consumers and businesses and so on.
These factors can be further broken down into macro-economic and micro-economic factors.
Macro-economic factors deal with the management of demand in any given economy.
Governments use interest rate control, taxation policy and government expenditure as their main
mechanisms they use for this. Micro-economic factors are all about the way people spend their
incomes.

Social Factors

Also known as socio-cultural factors, they are the areas that involve the shared belief and
attitudes of the population. These factors include – population growth, age distribution, health
consciousness, career attitudes and so on. These factors are of particular interest as they have a
direct effect on how we understand customers and what drives them.

Technological Factors

We all know how fast the technological landscape changes and how this impacts the way we
need to do business. Technological factors affect the way we do business in a number of ways,
including new ways of producing and distributing goods and services and communicating with
target audiences

Environmental Factors

These factors have only really come to the forefront in the last fifteen years or so. They have
become important due to the increasing scarcity of raw materials, pollution targets, doing
business as an ethical and sustainable company, carbon footprint targets set by governments (this
is a good example were one factor could be classes as political and environmental at the same
time). These are just some of the issues business leaders face within this factor. More and more
consumers are demanding that the products they buy are sourced ethically and if possible from a
sustainable source.

Legal Factors

Legal factors include - health and safety, equal opportunities, advertising standards, consumer
rights and laws, product labelling and product safety. It is clear that companies need to know
what is and what is not legal in order to trade successfully. If an organisation trades globally this
becomes a very tricky area to get right as each country has its own set of rules and regulations.

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