Wednesday, January 31, 2024

Understanding Value Generation As a Small Business Owner.

September 29, 2020 by  
Filed under Money/Business, Tech/Internet, Weekly Columns

( If you’re interested in creating a small business, there are no doubt tons of different things that you could dedicate your time and energy to – ranging from researching the best niche to operate in, to figuring out the most effective SEO strategy to undertake.

All of that stuff is essential – but it’s also extremely important to have a good sense of some of the basic principles that play out when you are trying to make it as a successful small business owner.

One of the most fundamental things that can help you to be effective in your professional endeavour, is to understand the concept of value generation as a small business owner. So here’s a look at that topic.

A lot of value is derived from scarcity and a sense of exclusivity

Everyone knows that gold is an extremely valuable thing, and if you look at the list of places where you can find gold on earth, you will tend to notice that those countries treat their gold reserves as a major asset to be safeguarded.

Why is gold so valuable? Sure, it has some important uses in computing and some other technical fields, but that’s not where it derives most of its value from.

Simply put, one of the major reasons for gold’s value is that it is scarce – there’s not a lot of it around, and so it can be used as an “anchor” for financial value, without a major risk of sudden inflation.

Scarcity and exclusivity can often be a major source of value in a professional context, as well. Of course, you won’t normally want to limit the number of products you are producing (quite the opposite,) but it can be a very powerful thing to aim your services or products and a niche market, and to differentiate them effectively from your competition.

A cornerstone of “value generation” in business, is solving problems that your customer or client might have

In a business context, “value” is mostly provided via your ability to solve problems that your customer or client might have.

In light of this, you should always be shaping your marketing materials and advertising efforts to effectively identify and address the potential problems that you might be able to solve.

So, for example, when you have a product to sell, spend most of your time writing about how that product can be used to benefit a particular client base, or to address a particular client need, rather than just rattling off the technical specifications by themselves.

Integrity and good professional ethics are an extremely meaningful form of professional value – but difficult to quantify

Integrity and good professional ethics are easily among the most essential things for any business to have, but they often get left out of discussions of value because they are simply difficult to quantify.

All the same, companies who develop a reputation over a prolonged period of time by being trustworthy, having good customer care, and turning out high quality products, frequently end up generating a tremendous amount of goodwill and loyalty.

On the other hand, companies that engage in unscrupulous professional practices and exploit their customer base virtually always end up with their reputations in tatters, unable to do business any more, sooner or later.

Staff Writer; Ronald Jackson

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