Developing a Business Concept

The Business Concept  An idea for a new business that CAN be TESTED  Answers 4 Questions: 1. What is the product or service being offered? 2. Who is the customer? 3. What is the benefit you are providing? 4. How will you get the product or service to the customer?

Writing a Concept Statement  After answering the four questions… You can write a Concept Statement Ex:

Testing the Concept in the Market  Feasibility Analysis  Determines if the idea for a new business is practical.  Answers two questions: 1. Are there customers who want what you have to offer? 2. What conditions must be present for you to decide to go forward with the business.

Testing Product/Service Requirements  Unique enough in the marketplace to capture attention?  Will the industry support your new business?  Research the industry  Trends  Barriers to entry  Profit margins

Talking to Customers  Talk with potential customers to measure the interest in your product.  Learn as much as you can about your target customers’ NEEDS.

Studying the Competition  Create a Competitive Grid  Organize important information  Gather this information by  Reading about them  Talking to them  Visiting their places of business  Talk to their customers and Suppliers

Looking at Start-up Resource Needs  For a feasibility study you will need to calculate how much money it takes to do the following:  Purchase/Lease equipment and facility  Pay any employees you hire  Finish Product development  Carry the company’s expenses until you have enough sales for the business to operate on its own.

The Business Plan  Document that describes a new business.  Explains to lenders and investors why the new business deserves financial support  Why Bother?  Obtain financing  Serve as a living guide to the business  To provide a start-up blue print

Vision  “If you can’t see where youre going, how will you know when you get there?  Main concept you have for your business  What your business is  What it will become  How you should run it  Keep your Vision BROAD

Parts of the Business Plan  Executive Summary  Product/Service Plan  Management Team Plan  Industry/Market Analysis  Operational Plan  Organizational Plan  Marketing Plan  Financial Plan  Growth Plan