Many people start a business or launch a new product because they have had an idea for something they want to do. But some quickly fail because they go to market without considering whether the idea is viable in the real world or not. Investing in a business, incurring start-up costs and expense without having considered and checked if there are customers out there who will pay for what you do is a high-risk approach to starting a business.
When you are excited by an idea, it is easy to assume that everyone else will be equally excited. But watching Dragons Den, contestants who are passionate about what they have put together still mystify the investors with their pitch and may never find a market.
An idea by itself is simply that: an idea. It is not a business proposition unless and until you have:
Identified who will want to buy the product or service, why they would be interested, what they will be prepared to pay, and how you will reach them.
Worked out how you will develop the idea and what your costs will be.
Calculated the time and effort needed to reach breakeven.
This is where the Value Proposition comes in. A Value Proposition is based on a review and analysis of the benefits, costs and value that the product or service will deliver to customers. It is also a script that allows you to test the market before you have incurred significant costs in your business.
Get started: Download our Value Proposition template>>
Working through the process of creating a value proposition helps you decide whether your idea is worth taking further (and it will save you a lot of money if it is not). The finished proposition can form the starting point for a more detailed business plan, and contain everything you need to start formulating plans for marketing your business.
To help you put your own Value Proposition together, we have created a Model Value Proposition template for you to download. The template takes you step-by-step through the 14 critical questions you should be asking before you make any decisions. It also includes a simple tool you can use to evaluate your answers.
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From our base in Macclesfield, we provide Business Advice, Mentoring, Coaching and Training to businesses across Cheshire,Derbyshire and the North West including Macclesfield, Wilmslow,Stockport, Buxton and Manchester.