Some people confuse a business case with a business plan, and although they may sound similar, they are inherently different from each other. The business case applies more to companies that are already operational than people looking to start companies. With that said, let's take a look at why you would need a business case.
A business case should be written when you want to make changes in a company, and you need to convince decision-makers why they should make those changes. You can also write a business case if you want to launch a new product. Finally, even if you are a decision-maker writing a business case is beneficial to you.
In this article, we will take a look at how to write a business case. Before we do that, we are going to discuss why it is beneficial to have one. So, if you are wondering how to write a business case, I highly recommend reading this article.
What is a Business Case?
There are a few different definitions for a business case, but it is a justification for why your business or your employers should take a particular course of action at the end of the day. It also shows how taking this action will benefit the business. Whether you are an entry-level employee or the director of a company, there are times where you might need to develop a business case.
Let's say you are a business owner with two Partners, and you come up with a great idea that you think will benefit the business, but you need the approval of your partners. It would be best if you drew up a business case. Once you have developed your business case, you will present it to your partners, and hopefully, you have been through enough that they will give the go-ahead for your idea or project.
You can also use a business case as a way to solve problems within your business. Let's say you are a brand manager for a big company and you notice that one of your products is not doing so well, and you think the best course of action is to discontinue the product. You will write up a business case as to why you think this is the best course of action.
If you are interested in writing a thorough business case that can persuade your partners or employers, I recommend reviewing this recent article. We give you everything you need to know on how to prepare and develop your business case.
Benefits of a Business Case
If you are ever wondering why you would need something as daunting as a business case, ask yourself why not? Essentially, the case is there to help you convince decision-makers or even yourself.
#1. Highlight the Value of your Idea
First of all, coming up with a business case takes a lot of work, which should show your passion for your project or problem. However, once you know how to write a business case, you will convey the value of your ideas conveniently. We do show you how to structure your business case further down in the article.
This may sound irrelevant, but even if you don't get a favourable decision when you present your business case, you still show that your idea is worth looking at. You might find that your idea gets implemented at a later date.
With that being said, writing a business case alone is not going to help you. It would be best if you showed enthusiasm and confidence not only in the business case but when you are presenting it. This enthusiasm and confidence add emphasis to your ideas which increases its value before it ever gets implemented.
#2. Secure Funding from Investors or Employers
In order to secure funding for a business idea, you will usually write up a business plan. Within the business plan, you will have sections that can be called a case for why you think you deserve funding.
However, a business case is for companies that are already in operation. If you can make a solid case for why you think money should be spent solving a problem or money should be spent to launch a new product, you are more likely to get the funding you need.
#3. Minimise Risk
When you are developing your business case, one of the steps involved is analysing the risks of whatever project you want to undertake. Sometimes, when you think about a project, you might not think of all the risks involved, but when you start putting pen to paper and giving everything some serious thought, things become more apparent.
If you take on a project with very little thought and not enough planning, you run a high risk of hurting your business. Sometimes while writing a business case, you might find that your idea is not worth it. At the same time, if you are trying to solve a problem within your business, you might find that fixing the problem is more complex and riskier than just leaving it.
When you deliver your business case to your partners or employers, they will have a chance to give you critical input. Perhaps they could think of risks that you couldn't think of, making the business case even more substantial. Remember, always be open to criticism.
#4. Show all your Options
Again, when you think of a new idea or think of ways to solve problems, you might think of a few options, but you need to sit down and write those options down.
Each part of your business case should be carefully planned out. It would be best if you did a lot of research, and while doing this research, you want to constantly update your business case with the options you can take. Remember, you can never be too thorough when developing your case.
Having all the options set out in front of you means you can make the best decisions to implement your idea.
#5. Shows that you Understand the Idea & the Risks
When you present a business case to your peers, you need to understand that they will scrutinize it heavily. However, it's a bit more than just a business case for many employers, partners, and colleagues.
If you are trying to launch a new product, you want to show your peers that you know exactly what you are talking about.
Showing that you fully understand the risks involved is one way to make them trust you more than they would have if they saw a significantly more amount of risks than you did.
#6. Streamline Communication
Another way that a business case can be used is to streamline communication between you, your colleagues, or even your employers.
A company that runs like clockwork is more likely to succeed than a company that has very little structure. At the same time, it is not always possible that you will be around for your employees to consult with, so if they already know what your objectives are, having them review the business case can streamline communication.
#7. Highlight your Contingency Plan
Trust me, anyone in business who has been around for a while will not just go around risking their money even if the idea is rock solid. With that being said, you do not want to be the guy who spends hours on a business case only to be asked a question that you cannot answer when presenting your case.
This is a question you may hear "what happens if things don't go as planned?" At this point, if you start to mumble, stutter, or become flustered, whoever is deciding on your behalf is going to have second thoughts.
It would be best if you had a contingency plan. It is a must, and there is absolutely no way around this. Your contingency plan needs to be thorough, and again, you can have different options in your contingency plan. In fact, if you need someone to decide, if you have different options in a contingency plan, it only shows that you have put more thought into it than necessary.
Your contingency plan should be solid, and it should show the decision-maker that even if they lose money or time, they will at least get some of it back. The more you can guarantee, the easier it will be to get a favourable decision.
How to Structure a Business Case
This section deals with how to structure your case. It is crucial that you read through and maybe bookmark this page to keep as a reference.
Including a summary right at the beginning of your business case is crucial. It prevents people from skimming your entire case. You want your summary to be short with as much information as possible. The summary is where you need to grab people's attention to be more interested and spend more time reading through your case.
Again I must emphasise, do not use any non-important information. Make sure that everything in the summary is informational and to the point.
Organise your Business Case
You should never present a business case that does not have a table of contents. Your business case will be reviewed multiple times by the same people, and when they have questions, you want them to go back and forth from sections immediately.
Nobody wants to flip through pages to find what they are looking for. This can turn many people off and could subconsciously make them give you an unfavourable decision. I know that sounds harsh for something as insignificant as a table of contents, but it is the truth.
Talk about the Problem or Project
This is where you get to express why you made the business case. Well, I say it is a place where you can express yourself, but you don't want to put a lot of unimportant information in the section.
The best thing to do is to highlight how you come across the problem or project. What caused you to take the problem or project so seriously that you felt the need to bring it to the attention of the decision-makers?
Here is a list of things you want to point out in the.
- State the problem or project
- Go into detail about how you discovered the problem or project.
- State which areas of the business the problem affects or if it is a product or service, state why you think you can penetrate a gap in the market.
- Mention a few issues, if any, and whether or not they are serious hurdles.
Make your Case
Making your case involves you talking about the specifics and all the analytics. Here is a list of points that you want to make clear in the section. You need to be on point here. After all, this section is where you will either prove your point or lose.
The main thing you want to talk about is how taking a particular course of action will benefit the company overall. You need to research as much data as possible.
For example, If you feel like the work computers are slow and costing the company too much time, you could suggest upgrading the PCs. You would need to prove that the PCs are slow and how much time could be saved with better technology.
Here is what you need to look out for.
For the Problem
- Talk about the data. How much is the problem costing the company in either time or money? How much can you save, and how much will the problem cost to solve?
- Which departments, products, and staff are currently affected by the problem? Be specific, mention the positives and negatives.
- Go into detail as to the extent of the problem as it currently stands.
- Use hard data to show how much you can increase efficiency or profits.
- Do not forget to highlight the risks.
For a product or service
- Be sure to start with data that represents the gap in the market. If there is none, you could still get a favourable decision by proving that you can compete.
- Use data to show that you know who your potential market is.
- Use available data to formulate a realistic prediction of your potential profits.
- Highlight the potential risks.
Highlight The Best Possible Options
Before writing this section, you need to do a lot of thinking and researching because if you cannot come up with good options on how to tackle the problem or project, you might find that people are less willing to give you a favourable decision.
I recommend that you order your options in which ones you would want to try out first. Putting the best option first is crucial because the person who has to decide might become uninterested if the first option seems unrealistic.
Whether you are trying to solve a problem or launch a product, your options need to be thorough.
Make a Few Recommendations
This is where you want to give your recommendations on the entire project or problem. You want to recommend everything, including who will be in charge of the project, and if you feel like you are the best person for the job, don't be afraid to recommend yourself.
Even though you have listed all the options available, you want to recommend which option you think is the best way forward, but also you want to iterate why it is the best option and how you are going to set up to make that option a reality.
For any recommendation that you make, you need to justify it. Confidence plays a massive role in how people treat you. Use confidence to justify your recommendations.
When giving your recommendations, you want to make your decision-makers to see what you see and feel how you feel.
A contingency plan is a must, especially if you are trying to get funding for a problem or a project. The contingency plan should be a mini business case within your business case.
You need to list possible problems that you might run into and how you plan on solving each issue either by pushing forward with a plan B or by recouping as much money as you can if the project were to fail.
You can have several options available for a contingency plan. In other words, you can have a plan B, C, and D. Giving your recommendations for contingency plans is excellent. However, it would help if you were careful because you can never fully predict what will happen. That is why having thorough options available is your best bet here.
A business case is something that you should spend a lot of time on. The more passionate you are about any project or problem, the longer you should spend and the more research you should do. When presenting your business case, do not be scared to be confident. Senior staff or decision-makers will prefer it if you are confident.