Every successful business in its early stages of development needs to create a sound, air-tight business plan. This is important to define your strategy, detail deliverables for stakeholders and develop cashflow forecasts for investors.
Before you can do that critical step, you need to be able to first crystalize the idea behind the business. You need a Business Concept Statement - a simple one- or two-page document that summarizes your voluminous business plan.
A business concept statement will give you a useful tool in pursuing business partners, investors, lenders, mentors, advisors, peers or even future employees. Remember in formulating your concept statement that it is not a sales pitch - that's for the marketing department. Those you approach to join you in your quest are looking for well thought out business ideas.
Even though your statement is short, it should still contain some key elements, provide a thoughtful analysis of your idea, give a glimpse of the existing market, and offer a value proposition that makes your business different from the rest of the market. Let's discuss these key elements:
- Give a Brief Description of the Business Concept. This is just a sentence or two that describes the essence of your product or service.
- How it Fits Into the Market. You should identify the void in the market that you are going to fill. Maybe this will be a problem you can solve, an emerging market you will help define, or a product/service that people don't even know they need.
- Your Solution. Discuss in more detail how your business is going to fill the void, solve the problem, or create that new market. More specifically, why you are the right person to bring the idea to market.
- The Proposed Business Model. This is critical because it details how you are going to make money. Discuss how you are going to charge for your product/service, the business processes you plan to implement, and what you will need to make it a success.
- Your Unique Value Proposition (UVP). Describe how your product/service is different from others in the marketplace. Why would someone want to buy your product instead of one that is already on the market? Will it be a new technology? A higher-quality product? Better pricing? Faster delivery? Better customer support? More attractive packaging? Or a combination of things.
- A Competitive Analysis. To make sure your new business idea will fill a hole in the market, you need to look at your potential competition. Who is your competition? What are their strengths and weaknesses? What is their annual revenue and market share? This helps determine the size of the market and the possibility of disruption, innovation or others bringing new product to market.
- An Overview of Your Marketing Plan. Your marketing will be critical to the success of your business. Establish what type of person will want to buy your product, what your target audience is, and what your ideal marketing verticals are. You should also discuss how you plan to promote your business idea that is different from your competitors.
You will find that first creating your Business Concept Statement will not only help you attract people to help you build on your idea, but gives you a great outline when writing a detailed business plan.