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It is often easier to come up with a variety of ideas for new businesses and more difficult to actually implement those concepts. A business concept is a bridge between an idea and a business plan. It focuses one’s thinking so that the entrepreneur can identify the specifics of his/her proposed venture. Converting an idea into a business concept requires thinking about how the product or service will be sold and who will buy it, the benefits of the product or service, how it is differentiated from similar ones, and methods of delivery.
Preparing a written concept statement helps unearth critical components of a venture and begins research into key factors that may be more thoroughly addressed in a business plan. As the business idea takes form as a concept statement, the manager can evaluate the business more effectively for potential challenges and pitfalls.
A clear business concept also enables the founder to succinctly describe the precise nature of the business to suppliers, customers, lenders, and resource team members; an important skill for entrepreneurial success. For example, it is not sufficient to say “I want to start a management consulting company.” This tells the listener little. Instead, one might say,
“I plan to start a management consulting company that provides strategic planning services to mid-sized businesses in the Southeast. Each consulting team, tailored to meet the unique needs of the client, will provide assessment and planning services to help clients improve efficiency and institute processes for innovation and change, resulting in cost reductions and sales increases.”
This version tells the listener much more than the first statement and helps the potential client visualize the business and its offerings.