A business concept is a tool that business owners, entrepreneurs and founders can use to engage with investors or potential stakeholders. An effective business concept helps people provide an outline of their ideas regarding new products and services. If you want to start a business, secure funding or promote a product or service, you can benefit from learning about this concise document. In this article, we explain what a business concept is, detail the necessary elements for creating a successful business concept and provide three business concept examples.
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What is a business concept?
A business concept is a succinct statement of the purpose and intent of a business idea. It is a summation of the core elements which define a business. It describes the reasons for the potential functions, depth and breadth of market reach and overall goals of a business. A business concept provides a summary of the most crucial aspects of your larger business plan and serves as an easily packaged resource that you can provide to potential investors and partners.
How business concepts differ from business plans
A business concept differs from a business plan, as it usually doesn’t include a breakdown of personnel, infrastructure or equipment requirements. A business plan is more elaborate and comprehensive than a business concept—which often includes a business concept, a comprehensive market analysis, details relating to funding and overhead costs, revenue goals, revenue predictions and a complete marketing plan.
5 elements to include in a business concept
An effective business concept describes and communicates the ideas and values of the business, and it also speaks to how your company would execute the steps necessary for reaching its primary goals. Here is a list of the five core things to include when writing your business concept:
1. Description of your product or service
A memorable, easy-to-understand description of your product or service is a foundational component of developing your business concept. The description should be clear and authoritative and it should highlight unique differentiators that set your product or service apart from the competition. To effectively communicate with your reader and grab the attention of your audience, you should direct and target your message using compelling and engaging language.
2. Analysis of competitors
Possessing a thorough understanding of the competitive landscape in which your company and product or service will be competing in, helps to mold and shape your go-to-market strategies. Obtaining facts and figures relating to potential competitors can help you when designing your business plan, and it can also help you prepare for communicating with investors, loan officers, partners or other potential stakeholders.
Studying what competitors are offering in the marketplace, and analyzing their tactics for marketing and selling their products and services is a crucial part of your preparation. By reviewing the successes or missteps others have made, serves to help you focus and refine your product or service. It’s also beneficial for ensuring that your business idea is distinguishable and unique from those of competing companies.
3. Overview of consumer demand or market need
A compelling business concept speaks directly to how your product or service is going to provide consumers with what they’re demanding. It can be innovative and groundbreaking, or it can compete with existing products or services using a new perspective, a lower-cost service or a higher value product.
To craft a truly successful business concept, you need to clearly articulate the current landscape of the market and discern the level of consumer demand or need within the market space. Determining whether the necessity of your business, product or service is due to high consumer demand is important for outlining and defining your pricing and marketing strategies. For example, if your product or service fulfills a consumer need that’s not currently being filled by other providers, the content of a business concept and the launch strategy is likely to be very different than if your product was an improvement of something that many other companies produce.
4. Details of your unique value proposition (UVP)
Within the framework of a business concept, a UVP is a concise statement that outlines how your business, product or service differs from others. Chronicling what makes the way your company will approach and execute a business idea and its unique value proposition in the marketplace are crucial elements of a strong business concept. Communicating the unique attributes of your value proposition lets your audience know that your business concept is innovative, forward-thinking and poised to be a positive and disruptive force in the marketplace.
5. Outline your plan for going to market and your launching strategies
A business concept must have a clear outline and framework for a successful go-to-market plan. Determining where, how and when to launch a new product or service is crucial to your business concept. It conveys your preparation and shows your audience that your ideas have been thought through in terms of design and execution.
Remember to include your desired timeline for getting your product or service to the market. Clearly outline what needs to happen in order to meet the milestones along the way to your successful launch. It’s also advisable to anticipate possible setbacks. You can use this information to develop executable goals that serve to counter or preempt hurdles and include them in your business plan.
Why are business concepts important?
Business concepts are important because they provide a distillation of the most critical parts of a larger business plan which is needed to aid entrepreneurs in attracting investors, funding, business partners and customers.
A well-constructed business concept demonstrates that you’ve put constructive thought into all aspects of your business. It shows potential investors and other stakeholders that you’ve prioritized the essential action items needed to launch your product or service successfully, and it puts your business in a unique and innovative light.
3 example business concepts
Here are three examples to consider that feature the core elements of a business concept:
Example 1
Here is an example business concept for an innovative healthcare product and service:
Product idea
Doc’ Clock–A fitness tracker and wristwatch that communicates with your healthcare provider.
Market need and demand
Many people are accustomed to wearing fitness trackers. Users often enjoy viewing information relating to their sleep habits, heart rate and activity levels.
Unique value proposition
Market research lets us know that using a fitness tracker can encourage people to make healthier choices, like drinking more water and exercising regularly. The Doc’ Clock is unique because it automatically syncs with patient portal platforms and sends data and reports to your health care provider. The Doc’ Clock also uses A.I. and computer programs to analyze that data. The device sends alerts and monthly health updates to your physician, and it’s programmed to make suggestions to users for healthy living.
Market launch strategy
In preparation for going to market, we’ve collaborated with the three most popular patient portal service providers to ensure that our devices align with their systems. Doc’ Clock has also partnered with insurance carriers to offer rebates, reduced rates and other incentives for purchasing and using our fitness tracker and wristwatch. We plan to make our product affordable, accessible, private and secure.
Example 2
Here is an example business concept for a technological solution for businesses:
Product idea
Nimbus SecureLock–Cloud computing and storage designed for businesses supporting remote workers.
Market need and demand
As more and more businesses are supporting remote workers and remote workforces, safe storage and the security of private servers has become increasingly important. Many businesses work with cloud computing solutions that secure data and server privacy at work. As the definition of “at work” changes, companies should also think about changing the way they protect and store information.
Unique value proposition
Nimbus SecureLock is a cloud computing system that goes beyond the safe storage of data and information. It provides a portable and private network “bubble” for company users. The system is distinguishable from others because it provides a fresh access code that renews daily to protect and secure each employee’s work computer and phone. It also uses a two-step verification shield for personal devices that employees have previously registered with Nimbus SecureLock. This feature helps companies ensure that any work emails, calls or text messages sent using personal devices are also secure.
Market launch strategy
Our strategy is to use the relationships we have built through our parent company to pitch and promote the use of Nimbus SecureLock. We’ve also been beta testing our product within our remote teams for the past calendar year. Our technology department, marketing team and sales engineers have collaborated to design a presentation tool that describes the data and figures relating to improved security and customer satisfaction since implementing tools and solutions. We aim to target large-scale banks, chain retailers and other businesses that handle mass amounts of consumer information.
Example 3
Here is an example business concept for an advanced consumer product:
Product idea
ForeverEye–Wearable tracking devices that help keep children, family members and pets safe.
Market need and demand
Parents want to feel safe when their young children play at the park. People want to feel worry-free if they take a jog alone, and they want to keep a watchful eye over vulnerable family members and beloved pets. To meet these desires, people regularly purchase tracking devices and enable sharing tools on their smartphones.
Unique value proposition
ForeverEye is unlike any other tracking product on the market. It doesn’t need to be charged, and it doesn’t rely on Wi-Fi or Bluetooth connectivity nor does it need to be in proximity to smartphone or tablet in order to work. ForeverEye offers keychains, wearable jewelry, shoe clips and dog tags that, once enabled and registered, offer location tracking and time-stamped event logging. Each device is preloaded with an advanced lithium battery that’s guaranteed to run for two full years. As the battery nears the end of its span of use, users will receive an electronic notification and reminder suggesting another purchase.
Market launch strategy
ForeverEye plans on using social media ads and brand ambassadors as the primary method of pre-launch marketing. We have developed relationships with popular influencers in the parenting, eldercare, community advocacy and pet ownership communities. Our social media following has increased by 60% in the last month, and we expect to see exponential growth following influencer reviews.
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