Business Planning: the Concept
Many times the concept phase is either given (such as when you purchase an existing business) or has been bouncing around in your mind for some time. However, it is important not to be too casual about this phase of your plan. Although a restaurant selling hotdogs and hamburgers may seem obvious, the subtleties that separate you from others may not be so easy to see at first.
Consider again the typical hair salon seen in every city. How do you feel about it? Does it engender a strong emotion at all? Now consider the sports themed hair salon. How would that make you feel? Which salon engenders a stronger emotion? If you are a sports fanatic, the sports themed salon will likely excite you, making you feel something special about yourself and your experience with the salon. It is
this feeling that will not only attract a certain clientele but will often allow for an increase in prices and profitability. This concept is covered in-depth in marketing but should be considered at this stage as well.
When developing your concept there are 5 main questions upon which you should focus:
1. Who are trying to attract?
2. What feeling are you attempting to engender?
3. Is there market need for this emotion?
4. How will you be different from others?
5. How long will this opportunity last?
Who Are You Trying to Attract?
Your first reaction to the question of who you want to attract may be, well...everyone, but that is most likely not the case. Much like the beauty salon focusing on men who love sports, your business will have nuances that focus on a specific demographic. It is this demographic that you will focus your attention regarding marketing and other critical decisions for your business.
To best determine who you want to attract, consider in your mind’s eye your first week of business. What does it look like? Who do you see coming in the door as your customer? It is that person on which you want to focus your attention.
What feeling are you attempting to engender?
According to the demographic you are targeting, your business should engender a feeling for the customer. Everything from the color of the walls to the music playing in the background all set a mood that should be attractive to your customers. In the case of the sports-themed beauty salon, the stadium seating, sports networks on the televisions, and the staff wearing jerseys all engender a feeling of being in a sports stadium. People who do not like sports would not be attracted to this theme, but the target market, likely young males, will be very attracted to this theme and will not only come to the salon, but will likely pay a premium for that feeling.
Consider the last time you bought clothes or at least shopped for them. You can buy clothes in many different outlets, but you chose to buy from that store in particular. Why? If you shop in a mall, you have likely experienced clothing stores that have very scantily clad young people on large posters outside the store and modern loud music playing inside. Obviously this store is not trying to attract a seventy-year old grandmother. So who are they trying to attract? Clearly they are targeting a young demographic and have focused the feel of the store to that narrow audience. When their customer buys from them, the customer receives a feeling much more about the store than about the actual clothing purchased. It is that feeling that is incredibly important when developing the concept for your business.
Is there market need for this emotion?
So, now that you have some idea of the feeling or emotion you want to engender in your audience, you need to ensure there is an actual market for that emotion. Not all feelings have the same appeal and yours may be too narrow to be viable. It is important to point out at this stage that you should not fall too madly in love with your concept. Remember, the purpose of a business is to make money. If you’re great idea will not make you money, or enough money to make it worth your while, then move on to another idea.
If we look again at the sports themed beauty salon and agree that the major audience for this emotion is young males (Yes, women like sports too, but not in the same numbers), it would not make much sense to place this salon next to an all-female university. However good the idea is, it has to match the market need.
How will you be different from others?
Although there are some very original ideas, most are not original and are simply an attempt to build a better mousetrap so to speak.
How long will this opportunity last?
Every idea, regardless of its impact on society, runs its course. That course may be short lived or may last many lifetimes, but eventually something will come along and replace it.
Using the techniques from lecture notes develop a concept of business (you can pick any business activity, company or individual).