As a startup company, you need to know what makes your business valuable. New businesses are started every day. The difference between a company that becomes a success and a company that eventually fails is often how each company manages and promotes its resources.
A more extensive explanation of resources is the tangible and intangible things a company has, which helps to ensure that the business can continue even if it is only in the short term. In addition, your business’s resources can also help you gain attention from potential investors. It is, therefore, crucial to understand what the value proposition of your company is.
From capital to industry knowledge, gaining and utilizing the resources available to the startup can be critical to your success. So let’s explore the differences between tangible and intangible resources and how you can get them to work for you.
The Ultimate Guide To Pitch Decks
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Tangible Versus Intangible Resources
Resources referred primarily to as assets in the business world can be tangible and intangible. Tangible resources refer more to physical resources that your business possesses. Intangible resources include various, usually non-physical resources that your company owns.
Tangible resources are resources or assets that your company can liquidate. These are the kinds of resources your business has on hand that can be sold or bartered with to help keep it afloat.
Examples of tangible resources are:
- Cash or capital
An intangible resource is a resource that lacks a physical substance, but that is truly valuable and immensely helpful in the functioning of your business. Examples of intangible resources include things like:
- Human capital
- Talent within the organization
- Trade secrets and even copyrights
Making your company more valuable is simply a process of determining whether or not you are using the resources you have at your disposal to their maximum capacity.
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A value proposition is a more eloquent way of describing the features and resources your business possesses that make it marketable and attractive to the market, client and investors.
This in turn can make your products, brand and company more valuable.
A value proposition is user-centric and focused on bringing attention to the facets of your business that would draw the most interest and attention from your desired target market. It is a way to present precisely what your company offers in a well-defined, engaging, and brief way.
Interestingly enough, the main focal point of a value proposition is to present your company’s resources in a way that clearly states why your business is superior to others in the same industry or field.
Value propositions contain three main points, and they are:
- Your product or service: Your value proposition needs to explain your business’s appeal briefly. It needs to be phrased to ensure you have the customer’s best interests in mind. It should explain why they will benefit from using your company to your customers and intended target audience.
- Who is your intended audience: Before creating your value proposition, you need to consider who the intended audience of your value proposition is. This is because creating a value proposition requires you to cater to express the needs and wants of your respective audience. In short, this means that your value proposition helps you gather and sort relevant information about the resources of your business into an ‘ideal customer persona‘ that will captivate the attention of your intended target market.
- Rarity: The last key point your value proposition drives home with future investors and customers is the value of the service you provide, coupled with how rare it is compared to other companies who operate within the same industry as you.
A well-structured value proposition does the following:
- Summarizes the product or service you are offering in a clear and concise way
- They specify how your client will benefit from using your product or service
- It clearly illustrates how your company is meeting a want or need within your field.
- The ideal value proposition should be written with the target market in mind, and it will clearly demonstrate the reasons as to why clients should choose your business over competitors offering the same product or service
However, to create a value proposition for your company, you first need to be sure that you know what resources you have on hand to work with.
Determining The Worth Of Your Resources
Stimulating the growth of your business as a startup company should be a top priority for any business – gaining traction is what most companies aim to do.
Traction is the success and momentum that drives startups into becoming thriving businesses that eventually operate on a profit. The challenging thing about traction is that it requires your business to be able to attract and appeal to the intended audience in the right way. This means that you have to know that you have the resources to handle any problems you may incur.
Knowing the worth of your business’s resources is essential because it gives you insight into your business’s assets and whether or not it is adequately equipped to handle issues that may come up as you begin to advance your company.
Specific resources are simply invaluable to your company regardless of whether it is just starting out or if your company is a well-seasoned contender. These are the resources that will help the business be consistently ranked amongst the best in your field and industry.
Knowing the worth of your resources doesn’t mean that you should rank them in order of importance. Instead, it means that you are aware of the significance and effect these resources have on your business and how they stimulate growth within the company.
For example, tangible resources, such as capital, will help you to secure your business in terms of having the necessary land, equipment, talent and solvency for your business to continue running at a profit.
Intangible resources, such as knowledge, are invaluable in helping you to grow and navigate pitfalls or mistakes without causing too much harm to your business as a whole.
The value of your business will be a critical factor when looking to raise capital from investors. In this regard, keep in mind that in fundraising, storytelling is everything. In this regard for a winning pitch deck to help you here, take a look at the template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.
Remember to unlock the pitch deck template that is being used by founders around the world to raise millions below.
Resources That Are Essential To Success
To thrive as a startup, the following resources will help you to develop and add value to your business:
It should go without saying that capital and funding are needed to finance the startup costs of owning your own business. This resource includes all sources of financing or current cash, such as:
- Cash on hand
- Loans or credit from different financial institutions
- Capital from private investors
- Funding from personal savings
- Government funding
- Funding from family and friends
Irrespective of the industry you are entering, you need money to not only get your business off the ground but keep it afloat.
Industry knowledge is priceless and can genuinely make a difference to any startup. As a new business owner, one of the best things you can do to give the company a boost is to educate yourself more on how the industry you are entering into behaves.
Educate yourself on your target market, competitors, and the market you are entering. You can do this by:
- Get a mentor. Reaching out to people who have been operating in your market industry for a more extended period than you is imperative. Mentors can guide you to avoid the pitfalls they have fallen into and help you through the problems you might find yourself facing.
- Another way to educate yourself about the industry you are entering is to look at professional trade associations. These associations often have materials and insight as to how your industry works.
Land and Resources
One of the best resources that a business can have is physical resources. Physical assets such as land and equipment make it slightly easier to see how the expenses and assets of the business measure up to one another.
Physical resources such as property, computers, and even IP are all physical resources that are necessary to gain traction and thus make it easier for your business to succeed.
Create a Healthy Working Environment
It is imperative that you create a good working environment, not only for your business but also for your employees. Having a sound support system will make it infinitely easier for employees to complete complex tasks. In addition, a good support system will further encourage employees to come to you with problems and be honest about giving you feedback when you are making changes.
A healthy working environment will also increase your retention rate and save you money in the long run.
Human capital is the backbone of your business. Your employees are the human capital of your company and are the ones who are responsible for getting the work done. Employees are the unsung heroes who make sure that your company is thriving by helping the company reach its goals and meet your clientele’s wants and needs.
Therefore, your business must be balanced with employees who are not afraid to work hard and who can efficiently carry out the goals and missions of the company with a high level of competence. In fact, some companies are bought based on the value of their talent.
Raving fans, strong reviews, voluntary brand ambassadors and brand love from loyal customers is highly valuable.
Ways to improve this may include:
- Elevate your customer support service: While the customer is not always right, they should always be valued. By providing excellent customer service, you make sure that your customer truly feels appreciated and is much more likely to become loyal to your business.
- Make your business more user-friendly: Whether your company operates using a physical address or solely online, your business needs to be interactive and user-friendly for all customers. Websites, stores, and checkout areas that will motivate customers to return. Creating more convenient features makes the shopping experience more accessible for the customer, and this easy experience incentivizes customers to come back.
- Incentivize it: Make sure your team is prioritizing making customers happy.
- Have a loyalty program: Not one that traps or fools customers, but one in which you commit to treating loyal customers well.
- Develop your product: One of the best ways to improve your product or service is to collect data. Using data from market research, market analytics, and customer demographics will allow you to see which areas your business is performing strongly. Collecting this data will also identify the weak spots within your company and will enable you to improve your product or service accordingly.
In conclusion, starting up your own business isn’t always easy.
For your business to succeed, your business processes need to be in line with business goals. In other words, how you use your resources must be effective in creating a competitive advantage for you and your business. Therefore, using your resources effectively and productively is crucial. This is known as resource management.
As a new business owner, you will realize that even small changes that you make in your business can have long-lasting effects.
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