Most businesses start with the initial idea, that seed which generally originates from both, a need to fulfill entrepreneurial aspiration, and an opportunity to provide a certain service or product. Similar to a regular seed that is associated with agriculture, there is some work to be done to harness the full potential of the seed prior to harvest time. Great forethought and consideration must be given to all the moving parts that are involved in a particular business idea. The greater amount of time an entrepreneur spends on the conceptual component of the business, the easier it will be to implement.
There are lots of moving parts to starting any business, but some businesses more than others might require more specialized work. You must begin by gaining an understanding of the industry that your business falls under. Your insights into the industry will inform your business decisions. Start researching the industry under the broad heading; as you learn about the industry, you may narrow down to sub-categories.
Process of Developing Your Business Concept
For example, if you are starting a coffee shop business, you would begin research into restaurant industry. You may use online resources, books, or conduct informational interviews with those who are informed about the industry. Once you have a broad understanding of the industry as a whole, you are ready to delve into the particular subcategory. In this case, you would focus your next research phase on coffee shops. Specifically, you want to understand market trends, competitors, differentiator between yourself and current retailers, and any important pending developments such as coffee importation tax increase or any other noteworthy global affectation.
Armed with the background of the industry, you are now ready to connect the dots on where your business fits. It is not a simple matter of throwing darts and waiting to see if they stick. It is a more refined process of determining where your business fits in the big picture.
Suppose the big picture is that coffee shops account for 40 million dollars in revenue out of billions of dollars made by the restaurant industry. You must pinpoint your share of that market. Consider whether your business will be a small coffee shop which accounts for 1-2% of the industry’s revenue or mid-sized? Suppose there is an indication that organic coffee is the latest trend. Will you stay true to traditional coffee brewing? Or be innovative?
All of these sorts of decisions must be made with your original intent for the business in mind while at the same re-shaping your idea to increase the likelihood of success. Your original business idea cannot be so stagnant that you won’t let it evolve when confronted with relevant, reliable research information. It is crucial to allow the information that you have acquired help you re-fine and possibly re-purpose your original business idea.
Subsequently, you can use the information you obtained from your research, to develop your business concept. It is important to develop a business concept.
Your business concept is what ties your business idea to a greater core. It draws the relational inference between your potential business, the industry, and your targeted market and customers.
Some entrepreneurs bypass this step and go straight to starting a business without much of the preparatory work. The entrepreneurs who succeed under that approach are the exception, not the rule. Picture yourself, walking down a path which leads to your home with blinders on. You may have some ideas about how this path will lead home, but with blinders on there is no way to know for sure that the path will lead you there. Similarly, not developing a clear business concept is the equivalent of walking around with blinders on. There is no guarantee that your efforts will be conducive to success. Since there is a lot at stake, it is not recommended that you embark on this journey without adequate pre-planning.
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Going back to the coffee shop scenario, an interesting business concept would be to have a coffee shop which provides organic coffee and all sorts of organic baked goods. The name of the shop could be “PRO-Organic Coffee Shop”. To take your business motto of organic consumption to the next level, you can sell t-shirts at the shop made from organic materials with embroidered words: “PRO Organic” and some messaging: “Start With Coffee”. The t-shirts will serve as a promotional tool for the business as well as helping you develop a brand [Refer to building a brand article] which will ensure the longevity and success of your business. That sort of conceptual development will make this coffee shop a true competitor among super-coffee shops like Starbucks.
The Conceptualization aspect of the business warrants way more forethought than all the stages of the business formation. Think of it as the GPS which sets the business on a clear, precise and pre-destined path. That goes without saying, you don’t have to spend so much time conceptualizing that you never get to actual implementation. You must find the right balance, most of the time that balance can be achieved when you are partnered with professionals who are knowledgeable about the process of business formation and development.
Bringing your research and your newly refined business concept together, you are now ready to write or work with someone to create a business plan. Some people manage to create successful business enterprises without a business plan. Depending on your risk aversion tolerance, you may be able to do that. Just as Doctors recommend wearing a helmet when riding a bike, I highly recommend a business plan. Especially, if you are planning on having potential investor, a business plan is must. If you are struggling with the decision of whether to create a business plan. You need to consider whether you are the type to ride a bike without a helmet? It’s all a matter of your comfortability facing the business risks ahead with adequate pre-planning or being sufficiently confident that the risks can be confronted on an impromptu basis.
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Part of the justification for most entrepreneurs wanting to bypass the business plan is the fact that it is not a small undertaking. If you don’t have a business background it may seem like a daunting task. However, there are many online resources that will facilitate developing a plan without much hassle. Moreover, you can have a plan made by professionals who offer such services, or you can delegate some sections of the plan such as financial forecasting to designated persons with expertise in that area. Regardless of how you coordinate the logistics, cementing your business concept through the formalities of a business plan will further your end goal of having a successful business.
About the Author:
Catherine Delcin works as a business consultant empowering entrepreneurs with the necessary tools and resources to bring their entrepreneurial aspiration to success. She holds Juris Doctorate degree of law specializing in Business and has extensive experience with all aspects of business formation. Connect with Catherine at Catherine.firstname.lastname@example.org, or connect with her on Twitter at http://twitter.com/CatherineDelcin .