People are only willing to pay for products or services if they really need or want them. So, it is important as an entrepreneur you need to understand the needs of your customers well and make sure your product or services offers them value.

In the previous chapters we have met various entrepreneurs who all thought of ways that would make customers value their products or services more highly. To do this, they asked people what their needs were. In other words, they did market research to find out who would buy their product or service.

Then, they thought of ways of delivering their product or service that would add value and meet their customers’ needs. These are the processes.

Here are examples of some of their processes and how they met customer needs.

Dineo’s chicken soup
Dineo noticed tired and hungry commuters returning home from work and asked them if they would buy her chicken soup. This was her market research. She found out that many were interested if the soup was hot, the price was right and it was easy for them to buy it at the station.

She then invested her own money in the inputs – the raw chicken and the vegetables. She also invested her time in buying the inputs and in cooking them up into a delicious broth.

Dineo made lots of chicken soup. But she knew that this wasn’t the end of her process. She needed to make sure that the chicken soup was where her customers were. So she transported it to the station so that her customers were able to buy it when they needed it most.

Inputs (what she needed): time, effort/labour, money for ingredients
Processes (what she did): preparing, cooking and transporting the soup
Output (what she offered): ready-made, convenient chicken soup

How did Dineo add value in her process?
Dineo made her product special by turning ordinary ingredients that anyone could buy into delicious, convenient soup that was easily accessible to the customers when they were hungry.

Thapelo’s maths tutoring
Thapelo knew that parents were worried about their children’s school results, particularly Maths. Many parents didn’t feel able to answer the questions that their children were struggling with.

Thapelo was good at Maths, and he asked worried parents if they would pay for extra Maths lessons for their children. This was his market research.

Then, he invested money in his inputs. He bought the Maths textbooks and stationery. He also revised his Maths knowledge so that he was familiar with the concepts and understood how to teach them well.

Next he needed to find a venue. He got permission from the school vice-principal to use a classroom for the sessions after school.

Finally, he set up afternoon tutoring groups. There were four groups of ten children each. He charged R10 a lesson.

Let’s think about Thapelo’s inputs, processes and outputs. Unlike Dineo, he is offering a service, not a product, but he still needed some inputs.

Inputs (what he needed): textbooks, the venue, his knowledge, and his time
Processes (what he did): revising his maths knowledge, preparing the lessons, organising a timetable and a space for the four groups to meet
Outputs (what he offered): maths tutoring, through which the learners would gain maths skills to improve their marks

How did Thapelo add value in his process?
Thapelo added value by using his Maths skills to tutor the learners. The groups were smaller than normal classes, which meant he could give each learner some individual attention. And, he was using a venue that was easy for the learners to reach in the afternoons. Importantly too, the price of a lesson – R10 – was affordable for the worried parents.

Asiphe the fruitseller
Sometimes people think they have to make fancy products or have specialised skills to be entrepreneurs. But Asiphe is a fruitseller who does not make anything, or have particular skills. She sells fruit outside two local schools. She sells apples or organges or naartjies in small plastic packets, and also has invididual pieces of fruit for sale.

Before she started she saw that there were only sweets and chips being sold to learners outside the two schools (primary and high) nearby. That was her market research – she could see there was no other fruitseller there.

She caught a taxi to go early to the big market where she bought a box of the fruit in season. She brought it home and put the pieces of fruit into small plastic packets. Then she went to set up her stand outside the school so learners could buy the fruit on their way home.

Inputs (what she needed): money for the fruit, taxi fare and plastic packets; time
Processes (what she did): going to the market, repackaging the fruit
Output (what she offered): small cheap bags of fruit

How did Asiphe add value in her process?
Unlike Dineo, Asiphe didn’t have a new product – she was still selling fruit. But the value she added was that she made it possible for people to buy small quantities (not a big box), and so for not much money. She also brought the fruit to where her customers were found – at the schools. (She had to make sure that she sold the fruit so that she would make a profit – but we’ll get to that later!)

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Each entrepreneur changed their original raw materials (the inputs). Everything went through a process that changed it and added value. Now more people want to pay for the product or service because it makes their lives easier and helps the community.

What makes your product or service special? What processes can you do that will add value to it? Think about how you can use your time, money and labour to make people want to buy it.

What have we learned?
It’s not only about making or offering a fantastic product – it’s also about meeting the needs of your customers. You need to think too about when and where that product or service be most useful for your market.