It's both okay and recommended to prepare things in advance! A lot of participants make improvements to their own personal libraries/engines before the jam begins. The rules state that you must publish the source for the things you've prepared before the jam starts. That way, participants can judge based on what you did during the jam. If you make a rough sketch of a game now, then make sure you publish that source code and link to it, making it clear that it is the starting point for the work you're doing during the jam. Iterating on an existing game is a perfectly valid form of participation for this jam.