It seems like everyone has a great idea for a business, but not everyone takes the steps necessary to start one. If you’re ready to make your dream a reality, one of your first measures should be to carefully think about the type of business you want to start. A business concept paper can be a great way to get your plans in writing, providing the guidelines you need once you start networking and raising money to fund your new venture.
You’re probably already familiar with business plans, which are often required once you begin seeking funding. However, business plans can be complicated documents complete with financials and in-depth information on your short- and long-term goals. A business concept paper, on the other hand, is a short but insightful document that demonstrates you’ve put time into thinking about your business. The term “concept” is a vital part of this document. Anyone reading the paper will want to get a good feel for why your idea is unique. Ideally, you ideally will have identified a problem and be able to explain how your product or solution will solve it.
A large part of the work you’ll do on your concept paper will begin long before you write the first word. You need to show from the start that you understand the mission and purpose of the business. If you already have a mission statement, take a long look at it and make sure you keep it in mind as you formulate your paper. Although concept papers are briefer than business plans, they still need to address the core questions someone might have about your product or service.
Highlight your target demographic as well as why your business will have the advantage when it comes to winning over this audience. Pinpoint whatever makes your idea unique and worthy of attention. This will be your value proposition. At the very least, your business concept paper should cover the following aspects:
- A brief description of your products and services
- A brief overview of your target audience and its needs
- Your value proposition (what makes your idea unique?)
Any market problems you're addressing
and the expected results
Key activities that will generate revenue
How you plan to reach out to customers
strategy and implementation
Your competitive advantages
Backgrounds of key team members
* A financial plan and budget estimate
Let's say you're planning to start a company that manufactures and sells dietary supplements. Your business concept paper should emphasize what gives your products a competitive edge as well as a brief description of your ideal customer and the strategies you'll implement to market your goods and reach the target audience.
For example, you could sell dietary supplements to seniors struggling with arthritis pain. Decide whether you're going to promote your products online or use more traditional marketing channels like radio and TV advertising. Estimate your expenses and potential revenue. Outline your unique selling proposition, such as the fact that your supplements are made with organic ingredients in FDA-approved facilities. Write everything down.
Once your concept paper is complete, it can be tempting to set it aside and forget about it. You’ll be busy growing your business, after all. You may even be asked to write a business plan, which will take up far more of your time. But if you let your concept plan go idle, you may find yourself needing to go back to it at some point – and it will be painfully out of date.
But there’s another significant benefit to regularly revisiting your concept paper. In doing so, you’ll take a look at your original concept and compare it to where you are now. You may find that without this occasional refresher, you quickly lose sight of your company’s original mission. Plus, regularly reviewing your business concept paper takes less time than going back through your multi-page business plan.