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Entrepreneurship Studies · SPM subjects and learning resources

Explain the need behind an enterprise idea

Your business idea sounds fine, but the answer does not say what problem it solves.

A need statement has three parts: who the customer is, what problem they face, and why the problem matters to them. Write it before describing the product.

This lesson is part of SPM subjects and learning resources. When you have a draft, the structured-answer self-review can help you check it.

What goes in a need statement?

  1. Customer: a specific group you can picture.
  2. Problem: what is hard for them today.
  3. Reason: what the problem costs them, in time, money or effort.

Worked example: a fictional hostel laundry service

Imagine a fictional enterprise, Cuci Kilat, invented for this lesson. The owner’s idea is a weekly pick-up and return laundry service for boarding students.

Product description (not yet a need). Cuci Kilat collects dirty clothes on Friday and returns them clean on Sunday at RM12 per bag.

Need statement. Form 4 boarding students have limited free time between prep classes and activities, and hostel washing machines have long queues. As a result, a student can lose up to two hours each weekend waiting for a machine, which is time taken from revision.

Notice what changed. The product is now an answer to a problem, and each part of the statement can be tested later: who, what problem, what cost.

The mistake: describing the product

A common weak answer is a list of features: “We collect, wash, fold and deliver at RM12 a bag.” It says what the business does, but not why anyone needs it.

Feature Product description Need statement
Customer Not named Form 4 boarding students
Problem Not named Long queues, little free time
Reason Not named Loses revision time each weekend
Marker’s view What, but not why What and why

The test is to ask “so what?” after the first sentence. If the answer describes the product again, the need is still missing.

Need or want?

Laundry is a need, since clean clothes are required. Saving the queue time is closer to a want, because students could still wash their own clothes. A careful answer can say so: the need is clean uniforms, and the enterprise meets it in a way that saves time.

How do I test my need statement?

Replace the enterprise with a different one, such as a bicycle repair stall. If the statement still reads the same, it is too general. A good need statement only fits one customer and one problem.

Check yourself

A fictional enterprise plans to sell healthy lunch boxes to office workers at RM9 each. Write a need statement in three parts.

Answer

A sample: Office workers in a busy town have short lunch breaks and few healthy options within a short walk. As a result, they buy fried food, which leaves them tired in the afternoon.

Here “buy fried food” is a claim the owner would still need to test, as the lesson on assumptions explains.

What to study next

Go on to linking an objective to supporting evidence, then see how to tell an assumption from a tested observation.

If you want a teacher to question your need statements, see online one-to-one Entrepreneurship tuition.

Common questions

What is the difference between a need and an idea?

The idea is what you would sell. The need is the problem a customer has that the idea solves. A strong answer states the need first, then shows how the idea meets it.

Can an idea meet a want instead of a need?

Yes, and that is allowed, but say which it is. A need is something the customer has difficulty without. A want is something they would like. Your explanation changes depending on which you claim.

How specific must the customer be?

Specific enough to picture. 'Boarding students in Form 4 with little free time' is clearer than 'people'. A narrow customer makes the need easier to defend.

Do I use a real business in my answer?

Follow the question. For practice, use a fictional enterprise as in this lesson. Real-business projects, and any assessed coursework, are set and marked at your school.

If your enterprise answers describe the product but not the reason for it, one-to-one Entrepreneurship lessons let a teacher ask 'who needs this, and why?' until the need is clear.

  • Online one-to-one lessons for your child with an experienced teacher.
  • Your first class is a one-hour trial, from RM50. The fee is agreed before you book.
  • Happy with the teacher? Continue with lessons of about 1.5 hours. If not, ask for another teacher.