From Good Idea to Great Concept: Starting Your Small Business Journey

For all aspiring business owners, having a business idea is an exciting beginning—but it’s only the first step on a longer journey to getting a small business open and thriving.  Most ideas are raw and need additional work before anyone can determine if the idea has a good chance of becoming a profitable business. By fleshing out an idea into a strong business concept, you’ll avoid building a company with products or services no one will spend money on.  

The Power of a Strong Business Concept

For a small business, the concept phase is where you define your business idea’s purpose, how it fits in the market, and how it solves customer problems. A well-thought-through, researched, and tested concept provides a foundation that allows you to vet your idea for its chances of success before investing too much time and money into a business that could struggle.

A solid business concept should include:

• Purpose: Why was this business idea created? What value does it bring?
• Market Reach: Who will benefit from this business, and how will it connect with them?
• Problem-Solving: How does it make life easier, better, or more enjoyable for your customers?
• Business Model: What’s the plan for profitability, and how will the business grow over time?
• Pitch Statement: A clear and concise summary that captures the essence of the business.

Why Some Ideas Struggle to Become Concepts

Getting excited about a new idea is easy, but objective self-assessment can be hard.  This is where a tool like the Business Model Canvas (BMC) can be helpful.  The BMC is a one-page framework that helps you organize and refine your idea into a comprehensive concept. The page is broken down into nine core areas. 

They are:

1. Value Proposition: What makes this business unique?
2. Customer Segments: Who are your customers, and why will they care?
3. Channels: How will you reach these customers?
4. Customer Relationships: What kind of connection will you build with customers?
5. Revenue Streams: How will your offerings generate income?
6. Key Activities: What are the essential tasks to make this business work?
7. Key Resources: What resources are critical to success?
8. Key Partnerships: Who can help you along the way?
9. Cost Structure: What will it cost to operate the business?

Check out this video to learn more about how the sections are interconnected.  

Real-World Validation: An Essential Step

For many business owners, the concept stage is the chance to test the waters without a significant investment. For the company Owlet, they initially wanted to develop a medical device for hospitals. After asking some good questions with the help of a Business Model Canvas, they realized their real opportunity was in consumer markets—specifically, a product for parents concerned about infant health. By pivoting based on feedback and testing their assumptions, they refined their concept and found a clear path forward. By working through the BMC, they saved themselves from putting too much time and money into a product that wouldn’t sell and instead focused on one with which they could build a successful company.  

Watch how Owlet used a BMC to test and refine their idea. 

Embark on Your Journey with Confidence

Building a business is a journey; turning an idea into a solid concept is one of the first milestones. The best ideas evolve into a concept with input from real customers. Even if your initial idea needs some adjustments, testing, and validation to give you the insights you need to succeed. Understanding how your customers will respond to your product and service offering, whether through surveys, prototype feedback, or conversations with potential customers, will create a much stronger business overall.  

At the Michigan SBDC, we’re here to help guide you every step of the way. If you’re ready to refine a business idea into a concept and explore what it takes to bring it to life, connect with us for support.  

Karlie Robinson
Business Consultant
Michigan SBDC Lake Huron Region hosted by Saginaw Valley State University

 

 

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