Part 1 – Your Value Proposition
There are many templates for business plans available to help you plan your business success.
No doubt you will have used a few in your time. Generally they are painful documents to fill out, lengthy , complex and challenging. But there is a much less weighty alternative – it’s called the Business Model Canvas.
The Business Model Canvas is basically a shorthand planning document to help founders and investors to get an overview of a business plan, fast. Its divided into 9 key sections. Its no less challenging than the traditional business plan but its definitely shorter and the results of your thinking can be seen together on one page which helps if you are trying to grasp the big picture.
In this series we are going to look at the 9 key sections of a Business Model Canvas, one by one. We are going to start with the value proposition because I believe for small businesses this is the key to getting everything else right.
Not sure what a value proposition is or whether your business has one? This should help:
In its simplest terms, a value proposition is a positioning statement that explains what benefit you provide for who and how you do it uniquely well. It describes your target buyer, the problem you solve, and why you’re distinctly better than the alternatives
A value proposition doesn’t explain how you plan to make money. Its all about why your idea will work. The marketplace is overcrowded with busy people who really don’t give a f••• . Why should anyone pay attention to you?
As business owners we have to understand what value we offer in context. Its not enough to say that you are going to open a gift shop that will offer hundreds of beautiful hand made gifts. You need to really understand who is going to shop with you and why they are going to come to your shop rather than browse on Etsy. Its not enough to say that you are going to set up a private hire cab company and drive people to the airport – you have to understand who might use you, and why they should use you rather than existing solutions like Uber, other competitors or even the train.
Ideally your business will already be solving a critical or urgent problem for a specific group of people. If you are already here then you shouldn’t have any problem understanding your value proposition or indeed finding customers. If that’s you – great!
If you aren’t sure yet – carry on!
How do you work out your value proposition?
It’s useful to think of value in terms of the people you are helping and the exact nature of the problem you are solving for them
Once you have identified your target market you will see that their problems come in all shapes and sizes and generally the more pressing the problem you are solving for them the higher the value you will be providing. If you are solving a business critical problem your solution will be perceived as exceptionally high value. If the problem you are solving is low priority or even latent, ie they arent even looking for a solution – good luck selling it!
When you have identified the problem and the solution you then have to decide how you solve this in a way that is likely to make your prospects choose you over your competitors.
To do this you need to be solving the problem or a number of problems in a uniquely attractive way.
Richard Branson famously said that being the best is always a good business plan. Are you the best? The fastest? The most convenient? The cheapest? The most expensive? The easiest to use ? The most reliable?
If you get your value proposition right lots of other things will fall into place.
Our Value Proposition
At the Business Hubs our market is small business owners in the local area. Several pain points exist for this group (as you will know!) but two key problems that usually go hand in hand are isolation and ignorance. These things are business critical because if they are not addressed the small business will fail. So the Business Hubs address these key problems.
Of course there are literally thousands of other people out there helping small businesses connect and learn so we had to set ourselves apart. We decided to create the most genuinely valuable small business community by focusing on developing meaningful and lasting relationships between business owners instead of superficial ones.
What problem are you solving, and for who? How do you make your value proposition uniquely attractive for your buyers?
Whats coming up at the Guildford Business Hub?
If you want to know more about business planning tools like the Business Model Canvas come along to our workshop this Monday morning at the Harbour Hotel in Guildford where Hub VIP Amanda Shovelton , Nat West small business specialist, will be showing us the ropes from an investor perspective. Each attendee with receive a A3 copy of the Business Model Canvas to work on during the session and plenty of post it notes!