What Exactly IS a 

Business Concept. ... An idea for a business that includes basic

information such as the service or product, the target demographic, and a unique selling
proposition that gives a company an advantage over competitors. 05-Feb-2014

What is a Business
Concept?
Home » Accounting Dictionary » What is a Business Concept?
Definition: A business concept is a statement that describes the reach and
reason of existence of a given business idea. In other words, it sums up the
crucial elements that define the business.
What Does Business Concept Mean?
A concise definition of what a business concept is varies from author to
author. The reason for this is that describing a business is never a formula.
There are different ways to communicate what a business do and why it
exists. Nevertheless, there are some key elements that must be explained by
a business concept for it to be considered useful and informative. First of all,
the product or service being offered must be easily understood.

This means that whatever the company is offering must be clearly

communicated through the business concept. On the other hand, the target
market should also be mentioned in this concept. This market will be the
segment that the business is looking to serve.

Finally, the company’s overall competitive advantage should conclude the

statement, to describe how this proposal differs from what already exists.
Business concepts are employed regularly in the business world, most
commonly to present new business ideas to potential investors and also as
institutional information displayed to the public to transmit the essential
qualities and elements behind a given business.

Example
For example, Calories Watch is a mobile app designed to track the amount of
calories being burned during an exercise routine. The app calculates an
estimate by inputting the nature of the training and the time spent on it. The
company’s founder Mr. Puller is preparing a business document to potential
investors where he will explain his idea and how it can make money for them.
In order to do this, he needs to come up with a business concept that is both
appealing and informative for these individuals.

As we previously discussed, a business concept explains the reason of

existence and reach of a given product or company. In this case, a business
concept for Calories Watch might be the following: “Calories Watch is a
mobile app designed for fitness enthusiasts to help them track their progress
while they are training. This app measures the amount of calories being
burned by using innovating calculation methods that no other app is currently
able to provide”.

In business as in life, you should always crawl before you walk and walk before you run. And so
it goes when developing the idea for your new startup.

In the early stages of your business’s development, you’ll hear from plenty of experts and
prognosticators who will emphasize the need to create a sound, air-tight business plan. While it’s
true that a business plan is an important tool for defining your strategy, detailing deliverables for
stakeholders and developing cashflow forecasts for investors, it’s important to first crystallize the
idea behind the business by putting together a Business Concept Statement.

What is a Business Concept Statement?

Think of your Business Concept Statement as a tool that distills your voluminous business
plan into a handy one- or two-page document. Not only does it lay the groundwork for the
business plan to come, it also refines your idea, outlines the consumer problem it aims to solve,
and discusses how the idea will fit into the overall market. It’s a snackable snapshot you can
share with investors, lenders, and/or future partners.

What Should a Business Concept Statement Include?

While brevity is the hallmark of a solid Business Concepts Statement, it should still encompass
some key elements and provide a thoughtful analysis of your idea, a glimpse of the existing
market, and a value proposition that distinguishes you from the rest of the market.

1. A Brief Description of the Business Concept. This doesn’t have to be more than a

sentence or two that captures the essence of your product or service.
2. The Market Need. Identify the void in the marketplace that your business idea is going
to fill. This could be a problem your product or service will solve, an emerging market
your product will help to define, or the absence of a product or service that people don’t
even know they need.
 3. Your Solution. This is a more in-depth discussion of how your business idea is going to
fill the void, solve the problem, or create a new market. It’s also your chance to discuss
why your product or service is the answer and, more specifically, why YOU are the
perfect person to bring the idea to market.
4. Your Proposed Business Model. This is a critical component for every stakeholder
involved because this is the element of the Business Concept Statement that details how
you are going to make money. You’ll want to discuss how you’re going to charge for
your product or service, the business processes you plan to implement, and the resources
you’ll need to make it a success.
5. Your Unique Value Proposition (UVP). Explain how your product or service is different
from others in the marketplace. Identify why someone would want to buy your product
instead of one that’s already on the market. Your UVP is your differentiator—the reason
your business will exist. Will it be your unparalleled customer service? A new
technology? A higher-quality product? Better price points? Faster delivery? Or a
combination of those things? Even something as simple as more attractive packaging can
make all the difference for many consumers.
6. A Succinct Competitive Analysis. To be absolutely sure your new business idea will fill
a hole in the market, you’ll need to look at your potential competition. Who else is
currently providing products or services to your prospective customers? What are their
strengths and weaknesses? Examine the competition’s annual revenue (or estimate it if
you have to) and identify their market share. This will help you determine both the size of
the market and its potential for disruption, innovation, or new products or services.
7. A Quick Overview of Your Marketing Plan. How you market your business will be
critical to its success. In some cases, your marketing plan may actually be your UVP.
Establish buyer personas, develop a target audience, and assess and prioritize your ideal
marketing verticals. Then, discuss how you plan to promote your business idea in a way
that’s different from your competitors.

Once you’ve finished developing your Business Concept Statement, you’ll have a useful tool to
pursue business partners, investors, lenders, advisors, mentors, peers and even future employees.

One important endnote: make sure your Business Concept Statement isn’t a sales pitch!
Stakeholders aren’t looking for catchy slogans, guarantees or pushy sales copy. They want to see
a well-thought-out business idea that’s supported by an actionable analysis of the existing
market.

If you’re thinking about bringing a new business idea to market, but aren’t sure where to
start, reach out to a SCORE mentor, who can help guide you through the process of developing a
compelling Business Concept Statement.

ABOUT THE AUTHOR(S)

Bridget Weston is the CEO of the SCORE Association, where she provides executive leadership
and works directly and collaboratively with the Board of Directors to establish the vision and
direction of SCORE.

Bridget Weston
 CEO, SCORE
KEY TOPICS
 Business Plans/Startup Assistance
 
 Strategy & Planning
 
 Startup

4. Creation of the business concept "We sell dreams, deliver experiences and deposit memories."
Chairman Simon Spies, Spies Travels Tours The creative market insight of the entrepreneur and the
discovery of the window of opportunity bring forward the new venture to the business definition itself
The creation of the business concept means to think out and shape the unique offer, i.e. what service to
provide to whom, how and why. It is a question of the degree of differentiation and focusing as well as
of direction. The design of the business concept will determine whether the meeting between market
and opportunity will be positive further down the line. The concept is the coalescence of the
opportunity itself. The concept determines the choice of product not the other way around. In this
chapter a dynamic template is introduced; it can be used to establish, process and validate a business
definition seen from the point of view of customers. Not that customers are necessarily right, but
because they are in charge of deciding. This chapter also takes up the conflicts, trade offs and risks that
any new entrepreneurial venture will come up against. In accordance with the market orientated
approach of The Business Idea, the basic notion of the chapter is that in many cases the business
definition is the key to success for the new enterprise rather than the product idea. 4.1 How to define a
business How often have we not heard the question asked, "Which business are we in?" when a
discussion is getting stuck or is to be brought back on track along the path of an entrepreneurial process.
Unfortunately, it is not very often that anyone actually goes up to the blackboard to give a clear, simple
and convincing answer that everybody understands and can wholeheartedly endorse. The explanation is
very simple: the business definition is the very secret. 97 The classic example of the recession-hit
American railways of the 1950s, which defined their business in a product orientated way (railway)
rather than in a market orientated way (transport) for better or worse illustrates the challenge. On the
one hand, the narrow, technology based business definition took the railways into deep recession
because customers left them for aircraft and motorcars. On the other hand, the business value of seeing
railway operation as transport would be virtually zero because this business definition is too abstract
and generic. It cannot be manoeuvred managerially. The formulation of a convincing business definition
and its conceptualisation, therefore, constitutes the backbone of entrepreneurship. It encompasses the
synthesis of market and opportunity insight (what is feasible?), competency profile (what is achievable
for us?) and objective (what do we want?). In most cases the business idea must be considered the core
of innovation - the very discovery of the opportunity. IKEA is a brilliant example of an enterprise which
attempts to unify many considerations into its business definition. The IKEA business definition:
democratisation An excerpt from the will and testament of a furniture dealer: "Once and for all we have
decided to be on the side of the many. What is good for our customers is, in the long run, also good for
us. This is a goal that requires commitment. In all states and in ail social systems ... an over-
proportionate share of resources is used to satisfy a small fraction of the population. In our industry,
much too much of what is beautiful and new is reserved for a small group of rich people. This fact has
contributed to the formulation of our objective ... A well-known Swedish industrialist has said that IKEA
has meant more to the process of democratisation than the total sum of political decisions ... From the
outset much of what is new was created for the majority of the people — for all those who have limited
resources. We are in the lead of this development.... The things we use to achieve our objective are all
characterised by our different line and our endeavour to be simple and straight-forward in the way we
deal with each other and our environment. Lifestyle is a strong word, but I don't hesitate to use it. To
have a better everyday life, you need also to be able to liberate yourself from status and conventions -
to be a free man or woman. 98