Before money was invented, before the word entrepreneurship was formulated, people in ancient times traded by offering value. As far back as the Stone Age, people had to transact by exchanging goods that were of equivalent value to what was to be received.
Today, this concept can be described by two words: value proposition. This has gained currency over time, but some entrepreneurs still miss the mark.
Business is based on the following basic principles; you are either saving your clients time and money, or making them more money. In supply and demand, distribution comes as a value-added product.
Geographic proximity to a product does not mean others have the same advantage. Cocoa is a good example. The product is largely found in West Africa. Any entrepreneur setting up a distribution channel to Singapore will be adding value on two fronts; firstly that area of Asia doesn’t have in the same abundance of cocoa as West Africa, and secondly from the logistics front.
In the knowledge economy, access to rare information elevates the value of those who have it. This is why companies call in consultants and advisors at an inflated cost. It is also why we keep going to conferences, paying international speakers large amounts of money to speak for 30 minutes. It’s all about the value one can bring to the table, and that comes from experience or study.
Scarce skills, like firewall experts, are rewarded handsomely, as cyber security threats rise. A shortage of something increases its value; art collectors can attest to that.
Marketers use this strategy to create a craving for a product and service. You are unlikely to see a Bugatti advertised on billboards and in newspapers. People who can afford the supercar know where to find it.
Entrepreneurs need to reprogram themselves to create value, rather than looking for money. Money chases value. No one holds a monopoly on cash; if you offer customers value, they will gladly give you their money.
Even Albert Einstein, a man of science rather than business, said, “Try not to become a man of success. Rather become a man of value.”
There are survivalist entrepreneurs who keep complaining as if money repels them. We need to be innovative in how we sell our products and services. The market will pay for the value you provide.
Jannie Mouton is well known for creating value. He did something unique through Capitec Bank. They entered a market which had gigantic financial institutions; they added value through two things in particular. They lowered bank charges and demystified the banking system. This related to the general population, most of whom were clients of other banks. Today, Capitec is one of the largest retail banks with four million clients, and they claim to be registering around 100,000 new clients every month.
Adding value is reliant on the industry that the entrepreneurs find themselves in. You need to make promises to clients that differentiate yourself from your competitors. You have to appeal to what they want. The successful execution of this can convert prospects into new customers.
While you are trying to make millions, never forget that at some point almost everyone in Zimbabwe was once a billionaire. It’s not really about the money, it’s about the value that you add through your company. Align yourself with a sense of value, then all these others things will fall in place