How to define your value proposition when you’re just starting out
Starting your own business can feel overwhelming – where on Earth do you begin?
If you’ve identified an opportunity for a new business, before you dedicate a large amount of time to building your business plan, a faster way of defining and validating your product or service is by developing your value proposition and business model canvas instead.
Let’s start with your value proposition. A value proposition is an important part of building a business.
Communicating directly to your potential customers and collaborators, it succinctly explains the value your product or service can provide to your customers, as opposed to a competitor or not purchasing at all. Quicksprout cleverly describes it as a Cost vs Benefit equation, one that goes in your favour.
However, your value proposition isn’t solely about your product; it is equally important to understand your audience’s changing needs, otherwise you may be left behind. That’s why you first need your customer segments, or personas. Start with your customer segments and think about the jobs they do, in context with your product or service. Then list their pains, what keeps them awake at night. Then think of their gains, these might be aspirational, things they would like. The move to your product or service and consider what “pain relievers” and “gain achievers” your product or service can provide. Using the value proposition canvas helps you to map out how your product or service “adds value” to your customer segments.
Once completed you can consider a value proposition statement. A simple way of stating who you help and how your product or service helps them. You may ultimately opt for a heading with subheading, or maybe brief bullet points would work best for your audience. Or you could want to progress to a video element, which would work infinitely better on platforms such as YouTube than a written version.
Just remember that a good value proposition statement is clear, short (some brands use only 3 words!) and specifically explains how you’re different to (and better than) your competitors. It is not a slogan or claim. Find some brilliant examples in this Impact article.
Because the options are endless, you may decide to run some testing to see how your audience reacts to different attempts, and adapt following feedback until you get the perfect one – it isn’t something to be rushed and you don’t get it right in one go.
Your next step is the business model canvas. A business model canvas is a visual template of nine blocks which maps out your business:
- Offering; the products and / or services you offer that add value to your customers, whether that be a qualitative monetary value or service-driven quantitative value
- Infrastructure; the actions you take in order to provide your product or service, the people, equipment or finances you use to do so, and any collaborating aspects that enhance your offering
- Customers; segments relating to your personas and markets (e.g. mass, niche etc), the channels in which you will communicate to them, and the type of relations you want with them
- Finances; your cost structure, which could be financial or value focused, and whether it will be fixed or variable, as well as your savings from economies of both scale and scope. You will also include how you will finance your venture.
It may sound pretty heavy, but it’s ideal to get to grips with your business in the early stages, allowing you to make assumptions and adapt before investing time or money; you can even download a free template from Strategyzer. It will also put you in a strong place when pitching your idea to incubator programmes like our own, or to investors, as it demonstrates your thorough understanding of how it is possible to bring your idea to life.
Once you’re happy with the results from your business model canvas, it’s time to progress; either on your own, or on a funded incubator like our own at DCI, where your business will be nurtured over 6 months and you’ll gain access to a wealth of training and contacts to help you succeed.
If you’re interested in joining us, you can apply for our next enrolment on our Apply Now page. In the meantime, grow your knowledge through the varied library of blogs we have, or contact us with any questions.