Writing a Business Plan
Business Concept and Value Proposition
What makes
your company unique?
It
is crucial that your business plan states your business concept and value
proposition. Since this part of the business plan follows the executive summary
and company history, readers already should have a general idea of your
company. The business concept, however, comprises your vision of the company,
explaining the value your product or service will bring to the customer, why
you are especially qualified to offer it, as well describing your offering's
uniqueness and growth potential.
This in turn enables you, as
well as interested parties and potential investors to research and analyze the
concept for feasibility, both from a market and financial perspective. The Feasibility Test
Think of a feasibility test as a reality check for your big idea. According to Entrepreneurship For Dummies by Kathleen Allen, a feasibility test weighs the validity of your business concept by examining four points:
- The product your
firm will offer
- The customer you
will target
- Your value
proposition
- How you will get
the product to its intended users
By
this stage you should have a firm grasp on what product or service you intend
to offer, as well as who you believe will be your primary customer. The final
item requires weighing various distribution channels, but, again, should be
answerable with a little leg work.
The Value Proposition In essence, your value proposition is what makes customers choose you, instead of the competition. It's part marketing, part operations and part strategy.
On a subconscious level, customers will compare the value proposition of your company against those of your competitors when deciding where to take their business. With that in mind, a few things to remember when writing your value proposition:
- Keep it short
and uncluttered.
Your value proposition explains why customers should buy from you. If you
can't sum it up in 10 words or less, chances are you won't be able to
execute it, either.
- Be precise. Your customers
have specific needs; your value proposition should offer targeted
solutions
- This is about
your customer, not you. Your value proposition should discuss
only what matters to your customers and the value you can bring to them.
- Value comes in
numerous forms.
Money, time, convenience and superior service are a few of the ways you
can help deliver value to your customers.
Distribution
Strategy
The last part of the business
concept is how you will deliver your product to your customers. There are
several factors to consider when plotting your distribution strategy: - Will you set up
a brick-and-mortar shop or office, sell online or both?
- What unique
obstacles exist for your company in these two different channels?
- If your company
sells a product, will you have the space to keep enough inventory on hand,
or will customers have to agree to waiting periods?
- Can you strike
exclusive deals with any particular distributor or retailer? Do your
competitors have any such deals that hinder your operation?
Remember,
vision is important if your business is going to grow. The more focused your
business concept is, the greater the likelihood that you'll attract investors
and customers.
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