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What can
I do in a home business?
That´s
one of the first questions folks looking to set up a home
business often ask me.
Despite
the urgings of various vendors of get rich-quick schemes to
the contrary, there is no one answer that fits all.
There
is, however, almost certainly an answer that fits you.
The answer
lies in the concept of added value.
Added
value is a technical economics term, but its meaning is ultimately
quite simple. Once understood, it will help guide you to the
right home business for you.
To get
a handle on the concept, take a look at any simple item around
your home -- a cup, a pencil, even a sheet of paper.
Now take
a moment and think about the steps in how that product came
to market.
It didn´t
just appear where it is. Somewhere down the line, someone
collected the raw materials. Someone else shipped those materials
to a factory. Still others manufactured into it the form you
see before you.
Even then,
before it reached you, it was transported to a location near
you, made readily accessible through some form of merchandising,
and even transported to your house.
At each
step in that chain, someone got paid -- and not randomly,
but for the little bit of value they added in the process.
Even the
so called middlemen add value, whether it be in the form of
transportation, storage or information about how the product
can be used.
Added
value is a fundamental property of a real business - a real
business adds value to a product, a process or a person.
(That´s
one way, by the way, to separate the home business scams that
litter your mailbox and email box from the real businesses
-- if you don´t see where the business is adding some
kind of real value, chances are high it´s a scam.)
So here´s
the act-upon question for you: how can you add value?
If you
work as a secret shopper, for example, you provide a business
owner information on how things work from the customer´s
viewpoint. In doing that, you improve and add value to the
process of running that business.
If you
make handicrafts, you add value directly to a product. A friend
of mine, for example, has a small business painting artistic
designs on drinking glasses. Her value add is as clear as
the before and after views of the product.
If you
provide childcare, your value add includes providing safety
for the child at a minimum, and in most cases some kind of
mental and emotional enrichment.
Hint:
If you plan to sleep or frolic in the Hawaiian surf while
the internet site they have sold you (and anyone else with
the price of purchase) magically sends millions of dollars
to your bank account, you may not be actually adding any real
value.
If think
about how you can -- or how you do -- add value, you will
reap key insights into what business is right for you.
Take a
sheet of paper. Write down a list of things that you might
want to do as a business. Then, with regard to each, write
how you can add value to the ultimate consumer. (If you are
already in business, perform the same exercise, but focus
on those things that you already do).
Don´t
be too narrow in your concept of how you add value. It´s
not necessarily a physical addition.
The value
add can come in the form of adding information, providing
an additional service, providing a guarantee of service or
quality, in addition to modifying a physical product.
But once
you have compiled the list, do assign the value that you believe
a rational and fully informed customer would give to each
part of value that you add.
For childcare,
for example, while some value may be attached to providing
an afternoon snack, more value undoubtedly will be attached
to providing freedom from worry about the safety and well-being
of the child.
Now stop
and think about what this exercise tells you.
It will
guide you with regard to understanding what business you are
in, how you should market that business, and how much you
can charge.
Where
you can add value tells you something about what business
you should be in. Customers are not stupid, and you will have
your best success pursuing opportunities where the value you
add is real, high, and easy to demonstrate.
At another
level, it helps you know how to market and promote what you
do. Once you focus on what value you add from the customer´s
perspective, you only a step away from formulating your unique
selling proposition. It helps focus you like a laser on the
only thing the customer cares about -- what you can do for
them.
Last but
not least, it even helps you gain an insight into how much
you should charge for what you do. If you can add a lot of
value in a short time, the fact that it didn´t take
long is no reason to discount your price. The value is in
the benefit conferred, not in the effort undertaken. Focusing
on your value added helps you break out just what your services
or products are worth to your customers.
Whether
you have an established business or are looking to get one
going, focus first on the value add. It will help guide you
at every step of your business´s growth.
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