There is a lot of talk in entrepreneurial circles about the need to develop a business plan. And while I agree that a business plan is important for defining your strategy and the key deliverables for all stakeholders – including staff, investors, and strategic partners, I believe that way before you delve into the data, projections, and planning required of a full-blown business plan, it is important to crystallize your business idea. The best way to do that is to create a Business Concept Statement — a one-page document that defines the great idea that you’re turning into a business.
Your Business Concept Statement should include the following elements:
- A brief description of the Business Concept – a sentence or two that captures the essence of your product or service.
- The Market Need. What is the void in the marketplace that your business idea is going to fill? There’s something that’s missing, something you believe the market needs. There is an opportunity for a new idea – your idea!
- The Solution: how your business idea is going to solve a marketplace problem and why you are the person to make it happen.
- The Business Model, which is how you are going to make money. Are you going to charge your customers a subscription or membership fee? Will you charge a set fee for a given service or charge by the hour? Will you sell a product outright? Will you sell ongoing and/or maintenance contracts? Or will your business bring in revenue using a combination of these approaches?
- Why anyone should buy your product instead of buying something else? When you can answer that, you have your Value Proposition. Explain what’s new about your idea. Which unique attributes will your business bring to the table: customer service, technology, a special process, better taste, lower price, faster delivery, or a combination of things? Even something as simple as more attractive packaging could make the difference for many consumers.
- To really be sure that your new business will fill a market need, you must consider the Competition. Ask yourself who else is providing products or services that could meet your potential customers’ needs. Keep in mind how big your competitors are in terms of annual revenue; estimate, if you have to. This can give you an indication of both the market size and market potential. Are there many or few companies vying for the same customers? Even though the number of competitors may be greater, coming onto the scene as one more of many similar products often can be easier than trying to break into a market dominated by giants.
- Marketing your idea will be critical for success. How will you spread the word about your new business?
Want to learn more about how to develop a Business Concept Statement? Read more about it in Forbes and complete Step 1 of the 10-Step Startup Roadmap at Wicked Start. Once you have finished your Business Concept Statement, you’ll have a useful document to share with advisors, peers or mentors. They can use what you’ve written to understand what you want to do and thus more easily give you the help you need to proceed.