Definition: A business concept is a statement that describes the reach and reason of existence of a given business idea. In other words, it sums up the crucial elements that define the business.
What Does Business Concept Mean?
A concise definition of what a business concept is varies from author to author. The reason for this is that describing a business is never a formula. There are different ways to communicate what a business do and why it exists. Nevertheless, there are some key elements that must be explained by a business concept for it to be considered useful and informative. First of all, the product or service being offered must be easily understood.
This means that whatever the company is offering must be clearly communicated through the business concept. On the other hand, the target market should also be mentioned in this concept. This market will be the segment that the business is looking to serve.
Finally, the company’s overall competitive advantage should conclude the statement, to describe how this proposal differs from what already exists. Business concepts are employed regularly in the business world, most commonly to present new business ideas to potential investors and also as institutional information displayed to the public to transmit the essential qualities and elements behind a given business.
Example
For example, Calories Watch is a mobile app designed to track the amount of calories being burned during an exercise routine. The app calculates an estimate by inputting the nature of the training and the time spent on it. The company’s founder Mr. Puller is preparing a business document to potential investors where he will explain his idea and how it can make money for them. In order to do this, he needs to come up with a business concept that is both appealing and informative for these individuals.
As we previously discussed, a business concept explains the reason of existence and reach of a given product or company. In this case, a business concept for Calories Watch might be the following: “Calories Watch is a mobile app designed for fitness enthusiasts to help them track their progress while they are training. This app measures the amount of calories being burned by using innovating calculation methods that no other app is currently able to provide”.
