What is a Business Concept?
Why you need a Business Concept:Turns an Idea into a Start-up!
Most small business owners are very good at coming up with diverse new ideas for business, but what they fail at, is the execution. It’s one thing to come up with innovative new business ideas, another another to come out with a detailed plan for the implementation of these concepts. That’s what a written business concept helps you with. It acts as a bridge between the idea and the business plan that evolves from the idea.
A business concept helps a business owner to focus his or her thinking on the specifics of his idea for the business venture. To convert an idea into a business concept is not easy, and requires a lot of thought about the product or the service being sold by your business, who do you plan on selling it to and who is likely to buy it. What value does your product or service add to a buyer’s life, what are its great benefits for a customer, how do you plan to deliver your products or services to the customer and finally, how do you plan on competing with other companies that sell a similar product or service.
There is a lot that a written business concept statement can help you with. It helps you to think deeply about your business venture, identify any serious flaws in it, which can be later addressed in greater depth in your business plan. A good business concept statement helps the business owner to understand the business and investigate the pros and cons of a particular business strategy more methodically and systematically build upon the idea that led to the business venture in the first place.
A good business concept statement builds upon a business idea and answers the following questions about the business.
- What’s the product or service that the business has to offer?
- How exactly does this product or service add value to a customer’s life?
- How does it differ from the other products or services in the market?
- What about the completion? Have you done any research on them, and how can you differentiate your business from what they have to offer?
- Who would buy these products or services and why?
- What is the marketing strategy behind these products and services?
What a perfectly well thought out business concept does is to help the business owner to explain exactly what a business does to a venture capitalist, an angel investor, a bank or a financial institution, a supplier or to a potentially important customer. It also explains to the employees what they can expect from the business and it would give them a lot of confidence about their job security, if they are to believe in the business owner’s vision, clearly stated in the business concept statement.
A good business concept helps a potential business client visualize the business and what it has to offer him. But it’s important not to be concerned too much about the business concept statement and not to get too worked up with the imperfections in it. The perfection of the business concept can be done later, while crafting the business plan. This is when a feasibility study of the business concept statement will be done, the profitability and cash flow potential studied and evaluated.
But it always helps to ensure that the business concept statement is clearly defined, which would help make the task of writing the business plan a lot easier later.
We hope you’ve found the information given here about writing a Business Concept statement quite useful. Do let us know if you have any questions.