How to write a value proposition in your business plan?

how to write a value proposition in your business plan

What is value proposition?

A value proposition communicates a clear message on benefits, features or experience your product or service brings to your target customer. It is also a statement that marks the uniqueness of what you are offering. Your customers should easily tell how your product or service is so different from others and why it is the solution for their problems.

It should be carefully articulated as it is the foundation of your business. Do remember, a slogan should stem from your value proposition, but they are not exactly the same.

When creating your business plan, your first writing task is always to define your value proposition.

Are there tools or simple formulas for it?

I’m glad you asked. Yes, there are.

1. Value Proposition Canvas

There’s the classic version designed by Alex Osterwalder,, in which six components are set to be the key factors to be addressed when defining a value proposition.

(Customer Segment)

  • Jobs

  • Pains

  • Gains

(Value Proposition — aka, what you offer)

  • Products & services

  • Pain relievers

  • Gain creators

Value Proposition Canvas by Alex Osterwalder

A detailed read here is to help you understand this tool in depth, as well as how to use it.

Some raised critique against the approach though, like Peter J Thomson, who redesigned a canvas that takes into account marketing techniques and customer behavioural psychology.

Value Proposition Canvas by Peter J Thomson

Personally, I’d prefer the latter as it is more a storytelling style. Given that your marketing strategies shall stem from your value proposition, this approach helps you create a strong one that lays solid foundation for the design of your marketing strategies.

2. Three Essential Questions

defining unique value proposition

Unexpected, Harvard Business School, an academic institute, came out with a rather simple exercise.

In fact, the logic behind the two questions presents resemblance to Value Proposition Canvas. However, the third one provides us with a different perspective: create a new way of segmenting the market.

3. Or a simple formula or template

such as :

“We help (X) do (Y) by doing (Z)” — Steve Blank

“We help our local customers to feel good and do good by fueling them up with artisanal coffee in a community-focused space.”

"verb; application; differentiator" —The VAD approach

“Share PowerPoint and Keynote slides including audio (Slideshare)”

[Proven industry example] for/of [new domain] —Venture Hacks’ High-Concept Pitch

“Friendster for dogs.”

As said, a strong value proposition shall lay the foundation for your marketing strategies and many other efforts around the development of the business. However, it does not necessarily stick forever. When writing a business plan, you may start with a value proposition but end up with a totally different version as you go deep in researching the market and your target consumers.

A final note

You do not need fancy words on your value proposition, it’s not a slogan and does not have to be tuneful, rhyming or poetic. Use plain, everyday language to better connect with your customers who do not have much patient to guess what are you trying to sell 🤷🏻‍♀️.