A concept statement is the essence of a business plan. If you are writing a business plan, know that this statement lays the groundwork for the plan for when you present it. Never at one point assume that the plan can speak for itself, it can’t. You need to include a statement that will help the audience (client/investors) to get a comprehensive understanding of the business plan.
So, to define concept statements; they are short statements that explain one big idea/ideas. These are statements used to convey a business’ purpose and focus to the audience. They are short descriptions of products, services or designs communicated to customers. Most importantly, these are descriptions used to explain how a new product or service will solve a particular problem in the market.
How important is this statement in a business plan? It helps sum up the contents of a business plan. It provides clients and investors with a better understanding of the plan through a concise and straightforward paragraph. Simply put, this statement is quite useful in providing an audience with a better visualization of a proposed business plan. Moreover, a concept statement is often part of the presentation used to woo clients and investors when seeking approval for a proposed business plan.
The key elements of business plan concept statements
As seen above, these statements are beneficial for any business plan presentation. They not only help explain the aim and focus of the business, but they also help provide a better understanding of what is intended to be done and how it is to be done. In this regard, an effective statement has to highlight the following key elements;
- The business description: This element explains what the business is all about. The descriptions briefly highlight the role of the business in the market. It also explains the distinct features of the business and operation policy.
- The product or service you will be offering: This should explain what product or service the business offers. Again, you have to explain what distinguishes your product/service from those that already exist in the market.
- Target market: What is your target market? How did you settle on that particular market group? When describing this, you need to mention who exactly is your product or service aimed for and how you intend to reach this particular market (market strategy).
- Your goals and objectives: These include both long-term and short-term goals. Your audience needs to know what your immediate and future plans are as a business. You also need to provide a timeframe for when these goals are to be achieved.
Tips on how to write a concept statement that will surely impress
If you are not a creative, you may think that writing a business plan concept statement is the most difficult thing ever. Well, it isn’t easy per se, but with the right guidelines and ideas, you can come up with a pretty impressive statement.
Here are a few tips to help you.
1) Provide a thorough description of the business
Concept statements are meant to explain big things simply, one that targeted audiences can easily and quickly comprehend. Owing to this, you need to ensure that your write-up meets all of this requirements. In one sentence, describe the business, its purpose, focus and fundamental concept.
Remember that this statement is a précis of the whole business plan, but will ensure that the audience can use it as a reference point, rather than having to pick through the entire document. So make it short and clear.
2) Define the problem
When seeking to start a business, one has to have done a thorough research on various opportunities that he/she can venture in. In this regard, they must have identified a gap in the market that their product/service can fill. This gap is the problem that customers are experiencing and need a solution to. Concept statements about this are what should be used to acknowledge and suggest solutions to these problems.
Therefore in your statement, briefly state the problem and how the intended product or service will solve this issue.
3)Assure that this product/service will truly address this problem
Consumers in general love guarantees, as this is what builds their trust and loyalty in a product/service. In your statement, you will want to assure them that the intended product/service will solve their problem.
Every market has competition, which means that there are other competing businesses offering similar goods and services as you plan to do. As a new entrant, you have to convince customers that your product is distinct from all other existing ones. As a result, you need to tell your audience what sets your products apart from all other existing ones.
4) Support your claim above
Promises that seem empty do not augur well with investors let alone customers. If you want the approval of investors, you will have to convince them enough to want to invest in your business. One way to do this is to prove that you are truly committed to ensuring that your product/service meet the market demands and expectations just as you will have stated above.
Additional tips on making Concept Statements :
- Ensure that your statement doesn’t sound like a selling pitch. Investors do not want to feel pushed, they need to be convinced and the best way to do this to avoid tones, words, and statements that will appear as if you are selling yourself. Just be succinct.
- Keep it short, simple, precise. Avoid using overly long sentences. A few descriptive statements can help drive the point home. Lengthily statements, on the other hand, can dilute the effectiveness of a concept statement so avoid them.
- Be specific. Remember that this is more of a summary of your business plan. You do not want your audience to get bored listening or reading paragraphs upon paragraphs without getting the point. Like I said, avoid making broad statements, be specific rather. For example, when defining the business, do not just say…a processing company. Instead, say… a processing company that specializes in baking ingredients- this is more specific
- Avoid using first person narration when writing the statement – this can be interpreted as being egocentric. If you want to woo clients/ investors, make the statement more about them and less about you.