When analyzing your business and product offering and deciding how you can increase profits or fix a broken business model the tendency is to see where costs can be cut and where things can be streamlined. While the latter is beneficial and streamlining should be including in any growth plan, it should never be at the expense of your value proposition.
Having a Value Proposition
Believe it or not, many companies do not have a unique value proposition. Many businesses and startups rely in me-too approach when laying out their business plan. They are under the false impression that they themselves are the differentiator. They believe that if every product or service offering is comparable to the competition, they will make the difference. The resulting effect is a business that sounds just like the other businesses in the marketplace.
While it may be true, and this person does possess the magic sauce that makes their business better, the client can't tell that because there is no value proposition. Just watch an episode of Shark Tank to hear how this sounds. People falsely believe that the Sharks should invest in the company because they will be investing in them as well. This doesn't work because an individual is not investable, there is to much risk. People invest in ideas, products, and service offerings. The truth is the marketplace doesn't care about individuals. An individual is not scalable and not repeatable. The offering needs to be improved.
You need to create a value proposition to reflect the abilities your company will bring to the table. A value proposition has to be a differentiating factor and should never include the owner as the difference maker. But use the owners vision and ideas to differentiate the offering. This shift in thinking will accomplish the same thing.
So look at your offerings and those of your competitors. Create a comparison chart of the offerings. Don't judge and say 'well they do that but I do it better'. This isn't the time for that. The chart needs to be from a clients perspective. If you can't do it yourself ask for an outsider to assist. Get a view of how the world sees you. This chart will give you an honest look at your business and where you can add the value.
After you create the product/service comparison chart and ask yourself are we the same on paper or different? If we are the same where can I add value? Should I charge more but include something different? Should I be the price leader or the service-level king?
Value comes in a lot of different forms. Not everyone will value the same things. Some people need a hamburger while traveling and will eat in the car. Others need to get out and eat in a restaurant so the kids can let out some energy. Both of these choices offer a solution to someones problem, but not all. That is okay. Both can be at the same exit ramp.