Entrepreneurship: Tool for socio-economic development?

If you believe in the title of this blog (as most of the policy makers do), then two of the basic questions you should ask yourself as an entrepreneur is:

  1. Is my start-up having a social impact?
  2. Is my start-up having an economic impact?

What do we mean by the above questions? How is this important for an entrepreneur? What benefit will I get as an entrepreneur by answering these questions? All are valid questions and here are some thoughts on why you should answer them!

Whatever be your business, ask if you are solving a social problem or serving a social want? If you are not doing both – be careful, for your start-up might be at the risk of failure. Whether it is Facebook or Google or Apple or Airtel or Infosys or Citibank or Saravana Bhavan – all of them solve either a want or a need. In doing so, they ensure that their enterprises have a future. Hence it is a very important thing for your enterprise to have a value proposition that either solves a need or serves a want.

Whatever be your business, ask if you are creating value for your customers and for yourself? If you want to truly solve a need or serve a want, you need to do it at a price that those who will benefit feel right. If you do this then people will buy what you sell. They will continue to patronize your products or services because it brings meaning to their lives. This answers half the question. The second half of the second question revolves around whether by doing this at a price that appeals to your potential customers, you make money. If you cannot sustainably create this value for your customers, then the solution is temporary. This will kill the enterprise itself. Thus, profits are critical for an enterprise to exist. Revenue and Profits answer the second question.

Thus the two questions that seem like a policy level thoughts are actually a quick check for every entrepreneur to try on themselves. In my opinion these are good questions to validate if the start-up will be widely accepted by the potential customers as well as by the ecosystem.

Use them to bring the much needed focus to your enterprises’ activities as well as to the performance.

Think!

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2 thoughts on “Entrepreneurship: Tool for socio-economic development?

  1. Your blog talked about need (which ultimately is demand) and focus on profit. How would you define social impact? (unless you mean need and social impact as interchangeable)

    1. Every entrepreneurial venture makes life better. In this process, it needs to make a little more money than what it spends in creating and delivering this solution. Unless both are true, the sustainability of a start-up is perennially under question. Hence it is the entrepreneur’s responsibility to ensure that ‘value’ is created both for the society being serviced as well for the business. Social impact, in this limited context, only refers to improving lives. I am not referring to social enterprises or social entrepreneurship here. Hope this clarifies.

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