The business concept: core competency and value proposition
Although your business will not be successful without customers to buy your product or service, and capital to fund the venture initially, the most important part of the business plan and the process you will follow to develop it is the business concept. It forms the vision for your business, describing what the business is and what value it presents to customers.
Some questions you should answer to define your business concept include:
- What value does your product or service bring to the customer?
- How is it different from what's already being offered?
- What is its potential for controlled growth?
- How are you uniquely qualified to offer this product or service?
The first three questions define your business' value proposition.
The last question describes the core competency of your business.
"We don't get caught up in trends."
Diane Brush describes how Garnet Hill designs and chooses its products to support its core competency and value proposition - home furnishings and apparel made from beautiful fabrics with unique prints and embroidery.
Defining the value proposition and core competency of your business idea in writing a business plan can help you clarify
- what you want to do
- why it will be valued
- why you are qualified, and
- how you can best reach your goals.
These concepts help clarify your business idea, evaluate its potential for success, and articulate your ideas to others, including family, friends, business advisers, and investors.