Why Every Business Idea Needs a Value Proposition

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. Measuring the potential that a specific product or business idea has can help you forecast and project possible profit margins. However, this exercise can be a little like counting your chickens before they’ve hatched as not projected profits is a guaranteed profit.

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. You may in fact be the one parting with your money to set up a business and this can lead you to making difficult decisions financially but if you have looked at the possible profit projections you may be able to make your money back.

This does in fact come into play quite heavily in a situation when a fledgling business is looking for financial investment. When you are excited by an idea, concept or possible business, 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:

1. 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.
2. Worked out how you will develop the idea and what your costs will be.
3. 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.

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 for possible investment in the future.

Avoid DANGEROUS Gift Giving: How to Gift Strategically for a Bigger Return on Investment

Gift giving is motivated by many reasons, but the most dangerous reason is a feeling of obligation. When you give because you feel obligated, you aren’t giving at your best. You probably feel pressure and you throw something together just so you can check it off your list. When you do this, it isn’t meaningful. In business, putting your money into something that isn’t purposeful is dangerous. You should be mindful and deliberate about everything you spend your money on.

Gift giving should be purposeful. When you are gifting in a business relationship, it is vital that it is strategic. That may sound like it is impersonal, but strategic gift giving is the most personal gift giving you can do. Being strategic in your gift giving means you want your gift to make an impact on the receiver. You want it to create a positive memory that from that point on, the receiver will associate with your business.

What kind of memory do you want to create with your gift? Most gifts are thoughtful. When the receiver gets the gift they think it was thoughtful and nothing more. Gift giving is an investment in your business and in your client relationships. You want to be thought of as much more than thoughtful with your investment. You want to create a WOW! You want something that makes them tell their friends about it and post it on Facebook. You want something that every time they use it or see it reminds them of you and that feeling of WOW!

The best way to achieve that WOW is through the details. The details need to relate to your business. You also need to personalize it to your clients. If you have one generic gift that you give to everyone, it is far less meaningful than something you personalize to each client’s likes and interests.

A common gift to give is a coffee mug. Unless your business is a coffee shop or a coffee manufacturer, you should not be giving out coffee mugs! It just doesn’t make sense. Another popular gift is a bottle of wine. If you are a winery, this is great. Otherwise, there is no connection to your brand.

Think about what you do for your clients and why they come to you. A gift that connects that with your client as an individual will really make a statement. In my personal assistant business, clients came to us to be taken care of and supported. For their birthday, we would bring them a birthday cake. That aligns with caring for and supporting them. In order to really make it touch their hearts, we had our baker customize the decorations to their interests and passions. Many of our clients were business owners and we had the baker replicate their logo on the cake. This gift showed them that we really understood them as an individual. A regular cake would have been thoughtful, but customizing it made it a WOW!

Gift giving should be strategic and meaningful. If you spend your business budget on gifts that don’t make a difference, there is no return on investment. Take the time to do it right and your business will reap the rewards of repeat business and word of mouth referrals.

Reevaluating Your Social Media Investment

In recent years, the world has become increasingly enamored with the realm of Social Media. There are literally hundreds of differently themed social media websites that are beckoning for your attention, as well in the investment of your time, energy and resource capital to hopefully cash in on the next great social media phenomenon.

Following Facebook’s recent IPO, the Wall Street Journal reported that General Motors was pulling the plug on its Facebook advertising to the tune of 10 millions dollars due to a lack of consumer response and measurable results.

For which the ten million question then becomes… Are you actually getting a measurable return on your investment in social media?

If you are to believe all of the social media hype, anybody who is anybody is intently immersed in the culture of Facebook, Twitter and Linked In. Then, there is the newest and supposedly hottest social media platform yet… “Pinterest” which is touted to drive more traffic to your business than its more established predecessors. But, are these pillars of social media actually generating real customers and consistent sales revenue for your business?

If they aren’t, then like GM, maybe you too should be reevaluating your investment in social media marketing. Here’s a tip for you… don’t get caught up in the frenzy surrounding social media. Rather, start exercising due diligence in evaluating its actual potential to assist with growing your business.

While there are some glamorous and seductive success stories out there — don’t allow them to become the alluring sirens that sink your efforts on the all too often barren rocks of internet marketing. In this regard, here are some points that you may want to carefully consider about your social media exposure:

First and foremost… there are many categories of business for which the internet holds no real marketing value what-so-ever.

If your business endeavor is one that could legitimately benefit from the world wide web… you must still keep you wits about you and have a sound perspective about your internet marketing, what you expect to accomplish… and “why”.

Remember that an internet search will ultimately yield millions of results, yet only the top 10 organic search results will appear as Page 1 listings. The odds of ever being… let alone staying listed on page one are about on par with winning the Power Ball Lottery.

There is an age old axiom in business which states that you shouldn’t confuse activity with results. Yet, thousands and thousands of businesses are doing exactly that with regard to their internet presence. Simply consider the facts:

You could spend the money and do all of the work that it will take to eventually have 10,000 or more followers on Twitter or 10,000 plus fans on Facebook… yet the question lingers loudly… to what end?

For the most part… it’s nothing more than a popularity contest. It’s a proven fact that there are real business people who have over 1,000,000 fans on Facebook and have yet to see the first penny of sales revenue from their efforts.

Here’s the distinction that needs to be crystal clear to you… fans and followers are not and never will be “qualified leads”! Let me repeat this again because it is critically important… your fans and followers are not qualified leads who have a bonafide interest… let alone real “need”… for your product or service.

As well… there are many businesses that have invested $10,000… $20,000 and more to build their website, do extensive search engine optimization and promotion that is necessary in order to obtain a #1 Google ranking… Only to learn the hard lesson that a #1 ranking does not in any way translate into actual customers, a revenue stream or a guarantee for internet marketing success.

At the end of the business day, you want real “customers”… not fans! This requires a comprehensive understanding of exactly what distribution channels, marketing strategies and sales tactics are the winning combination for your business and the results that you want to achieve. And for that… you may need a little help.

Copyright © 2012 Developing Forward | Thomas H. Swank, CBC | All Rights Reserved.