Your value proposition is an explanation of the value your product / service delivers to your target market.
You should be able to tell your value proposition in one to two sentences max, everyone in your business should learn it and repeat it verbatim when asked "so what do you guys do?" (by "verbatim" I mean building a sentence or two that sounds natural / rolls off the tongue easily and consistently).
This breeds clarity, strong brand messaging and professionalism to your target market and the outside world in general.
So many entrepreneurs I have worked with focus too much on features ("the how") and it's usually because it's their baby, they brought it to life and they are nurturing it through key life stages. The forget that the reason people will buy their product is not because of features or packaging but because of the value it gives them.
Golden Rule - Start your value proposition with the value your product / service give and follow up with "how" you do it.
Who Cares? - A great test of this is to apply the "Who Cares" logic to your value proposition. As you read the sentence put yourself in the shoes of a potential customer and ask the question "who cares?" This will make you think hard about what you are saying and if your value proposition is truly value driven.
Check out this blog by wordstream for examples of 7 of the best value propositions out there.