A unique value proposition is simply your answer to the question: “Why should someone buy from you instead of your competitors?” It’s the main reason a customer would pick your business. As a new business owner, figuring out what your unique value proposition is is one of the first important steps you’ll take.

You see this every day as a consumer. When you choose one coffee shop over another or pick a specific brand at the grocery store, you’re responding to their value proposition. The businesses that clearly explain how they solve your specific problems are the ones that get your money.

Take Netflix when it started. Their value proposition was straightforward: “Rent DVDs online, get them delivered to your door, keep them as long as you want, no late fees.” This clearly showed how they were different from video rental stores like Blockbuster, which charged late fees and required trips to the store.

For a new business, being clear about your value is even more important than for established companies. You don’t have the luxury of name recognition, so potential customers need to immediately understand why they should choose you.

Also See: Understanding the Value Proposition Canvas

Creating Your First Value Proposition

Let’s break down how to create your value proposition in practical, straightforward steps:

First, decide which customers you’ll serve. Don’t try to appeal to everyone—that’s a common mistake that leads to appealing to no one. For example, if you’re starting a pet grooming service, you might focus specifically on busy pet owners who work long hours rather than trying to serve all pet owners.

To identify your ideal customers, ask yourself:

• Who feels the problem you’re solving most intensely?
• Who is currently underserved by existing solutions?
• Who will get the most value from what you offer?

Second, pinpoint exactly which needs you’ll meet. The more specific, the better. If you’re starting a lawn care service, instead of just saying “we cut grass,” you might identify that working parents in suburban neighborhoods need reliable, consistent lawn care without having to remember to schedule it each time.

To find these needs:

• Talk to potential customers about their frustrations
• Look for complaints about existing products or services
• Notice workarounds people create to solve problems (Check out our story on the workarounds Murray White noticed that inspired him launching Hele Outdoors)
• Identify tasks people find time-consuming, expensive, or confusing

Third, determine your pricing approach. This isn’t just about picking a number—it’s about how your price relates to the value you provide and how it compares to alternatives.

For example:

• A budget gym might charge $10/month by eliminating extras like classes and personal training
• A boutique fitness studio might charge $150/month by offering personalized attention and specialized equipment
• Both can succeed because they align their price with the specific value they provide to their target customers

When writing your value proposition statement, use this fill-in-the-blank template:

“We help (specific customer type) who want to (achieve this goal/solve this problem) by (your unique approach) unlike (how others address this need).”

Here’s a real-world example from Dollar Shave Club: “We help men who want quality razors without the hassle and expense by delivering them directly to their door each month, unlike store-bought brands that charge premium prices for unnecessary features.”

Testing Your Value Proposition

Before you invest too much in your business, test whether your value proposition actually resonates with real customers. Here are practical ways to do this:

1. The coffee shop test: Invite 5-10 people who fit your target customer profile for coffee. Explain your business idea and value proposition in under 30 seconds. Then ask:
   • What problem do you think my business solves?
   • Would you pay for this solution? Why or why not?
   • How would you explain this business to a friend?
2. The landing page test: Create a simple one-page website that clearly states your value proposition and includes a way for people to express interest (like signing up for updates or requesting more information). Run a small ad campaign targeting your ideal customers and see how many take action.
3. The comparison test: Show potential customers your value proposition alongside those of 2-3 competitors. Ask which one they would choose and why. This helps identify if your differentiators actually matter to customers.
4. The minimum viable product: Create the simplest version of your product or service that delivers on your core value proposition. Sell it to a small group of customers and gather their feedback.

Signs your value proposition is working:

• People can repeat it back to you accurately after hearing it once
• Customers willingly refer others to you
• People are willing to pre-order or join a waitlist
• Your conversion rate (the percentage of prospects who become customers) is higher than industry averages

When to revise your value proposition:

• When customer feedback consistently points to a different benefit than what you’re highlighting
• When a competitor emerges with a similar value proposition
• When your target market changes (like new regulations or economic shifts)
• When your testing shows low interest or conversion rates

Taking Action

Your value proposition isn’t just a marketing slogan—it’s your business’s roadmap. It should guide everything from which features you develop first to how you train your employees to what you emphasize in your advertising.

Here’s a simple exercise to start: Write out your value proposition using the template above. Then list three ways you’ll deliver on each part of that promise. For example, if you claim to offer “the fastest service,” what specific things will you do to ensure speed? Will you guarantee service within an hour? Will you have more staff than competitors? Will you use technology to eliminate wait times?

The best value propositions aren’t just catchy—they’re honest promises that your business is designed to keep every day. Start small, deliver consistently on your core promise, and listen to your customers. Your value proposition will evolve as your business grows, but staying focused on the specific value you provide to specific customers is what turns good ideas into successful businesses.