A “business concept” is the first step in the process of starting a new venture. It typically describes a vision of what might be. It generally precedes the business plan and it begs feedback on the merit of the idea.

A business concept speaks about the customer, the product or service, the value proposition, and the distribution channel:

• Who is your customer?
• What is the product or service you are offering?
• What is the value proposition? The value proposition is the benefit that is being provided to the customer. In other words, why will the customer buy from you — what’s in it for them?
• How will the benefit be delivered to the customer? That’s how you reach the customer and deliver the benefit. Entrepreneurs often confuse benefits with features. But the decision to buy is usually based on the benefits provided by the service or product.
• How do they want to buy this offering?
• When will they want to buy it?
• Where will they want to buy it?

The Business Concept defines strategies for successfully implementing the product within the marketplace. This includes pricing, revenue, and distribution models. A business concept is a way to define an opportunity so that it can be tested through a process known as feasibility analysis.

A feasibility analysis is a process whereby you can test your business concept and arrive at the conditions under which you are willing to go forward with this business. No matter what type of business you have (or intend to start), you will go through the same feasibility process. This is also called a concept test.

Money is important but comes later. For now you need to find out whether you have a business that has customers.

Next you need to determine what makes your company unique or different. Customers buy for your offering’s differences not because it is the same as others. These unique competencies become the core of your competitive advantage.

A feasibility test acts as a reality check for your idea. A feasibility test weighs the validity of your business concept by examining four points:
1. The product your firm will offer
2. The customer you will target
3. Your value proposition
4. How you will get the product to its intended users

With your idea tested, the next step is to begin the business planning process.

John Bradley Jackson
© Copyright 2008 All rights reserved.

About the author
Leave Comment

Your email address will not be published. Required fields are marked *

clear formSubmit

This site uses Akismet to reduce spam. Learn how your comment data is processed.