A business concept is a concise description of an opportunity that contains fo0ur critical elements: the customer definition; the value proposition (or benefit to the customer) and the compelling story, the product /service; and the distribution channel or means of delivering the benefits to the customer.
The business concept can be thought of as a type of elevator pitch. Elevator pitch is a term that has been applied to the idea that one has only a few seconds – the time it takes to ride an elevator up to the twelfth floor – to get an investor ( or another interested party) to “buy into” a business concept.`
A few seconds is not a lot of money, so having a clear, concise, and compelling statement of the business concept is important. In reality, most people, whether they are potential customers or potential investors, don’t have enough time in their busy schedules to give a proposed idea more than a few moments of thought before they decide whether to dismiss it or investigate it further.
Quick -testing the Concept
With a preliminary business concept in hand, it is helpful to do a quick test to determine whether a full-blown feasibility study is warranted, Many weak business concepts can be eliminated from further consideration by asking a few questions, such as those that follow. Answering these questions does not require any research. The entrepreneur can simply rely on his or her own knowledge and on the advice of people who can provide objective opinions.
- 1. Am I really interested in this business opportunity?
If the concept is developed, time and energy will be invested, so it is important that the entrepreneur be passionate about the idea. Many potential entrepreneurs have gone forward with concepts that others suggested, only to discover after they have spent considerable time, effort, and money, that their hearts weren’t in the business.
- Is anyone else interested?
A business cannot exist without customers or, in many cases, without investors, so it is important for an entrepreneur to determine whether anyone else is interested in the business concept.
- Will people actually pay for what is being offered?
Often, when people hear about a new product or service, they express interest – an even excitement. But what are they willing to pay for it? And how much? If they are not willing to pay what it’s worth, the idea may need to be revised.
- Why me?
The entrepreneur must be convinced that he or she is the right person to execute this concept. What unique capabilities and contacts does the entrepreneur bring to the venture?
- Why now?
Why is this a good time to launch this business? Why has no one else done this before? Or, if they have, why did they fail (or succeed)?
Once these questions have been satisfactorily answered, it’s time to progress to the next level: The Business Model