Analysis of the Business Idea or Concept
The concept analysis continues the task begun during the ideation process. This portion makes certain that you fully understand your business concept and how you hope to transfer value to customers or clients. You cannot accurately assess your market, operational capability, and financial needs without first have a firm understanding of exactly what value you plan to provide.
“What is the current market need/want?” Answering this question is the first step in making a preliminary determination of whether your idea is or could be a valid business opportunity.
What to Do?
- Write out, in detail, how the product or service addresses the want or need of a customer or client.
- At the end of the above paragraph, create a single sentence that states your product’s value proposition (i.e., how it provides value to the customer).
Note: Please do not take this process lightly. The concept statement provides a bearing point for the entire business idea. While, the ideation process asks you to think broadly and not confine yourself to traditional thought processes, you must be specific about your idea’s attributes when you examining it for feasibility in the current market.
At first glance the above instructions seem simple and straightforward. After attempting to do so, you likely find that stating and describing the value proposition concisely is quite difficult. Often, a product or service has multiple different ways in which it can potentially create value. Failing to be specific in your business objective (building the core product or service) will inevitably lead to uncertainty in planning and a lack of confidence from those interested in your business idea.
Questions to Ask about the Idea or Concept
Below are some additional questions that may help you develop the concept paragraph:
- What is the nature of the opportunity? (i.e, What type of business will this be?)
- Why is there a possibility for this business (need or want)?
- Is there anything overly compelling about the business?
- Is someone already fulfilling this need/want in the market and, if no, why not?
- What are the potential risks involved in getting started?
- Are there any clearly identifiable hurdles or gaps in the plan and, if so, how can they be addressed in the planning process?
This list of question is by no means exclusive, but they may help you to tease out and more fully develop your concept. Remember, having a strong understanding of the concept will help you and other (investors, partners, lenders, etc.) determine whether the idea is worth pursuing (a valid business opportunity) in its present form.