Almost all projects require approval, whether it is a simple "go ahead" from the team or the backing of a senior stakeholder. You could be used to pitching new ideas and getting approval for projects using a business plan or project charter. However, you might need to create a business case if your planned project entails a sizable financial commitment from the company.
We can assist if you've never created a business case in this blog. You can build a business case using a handful of resources and some forethought to help you obtain the funding and assistance required to operate a project successfully.
Did you know?
Lack of initial capital backing accounts for 42% of business failures! That’s why creating a strong business case is important in order to secure funding.
What is a Business Case?
A business case is a plan that lists the value or advantages your firm will experience if you proceed with a sizable financial commitment or effort. A request to boost spending on an ongoing campaign, the message for the introduction of a new product or service, or a sizable investment from a new institution or contractor are just a few examples of this initiative. A persuasive business case will describe the predicted advantages of this substantial investment choice. Key stakeholders will use the business case you give to decide whether or not to continue forward with an endeavour.
If you haven't written a business case before, it could seem similar to many other initial project planning materials.
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Business Case vs Business Plan
A proposition for a unique approach or major project is known as a business case. It should describe the commercial requirements and advantages that following this possibility will bring to your organisation.
On the contrary, a business plan is a blueprint for a brand-new company. A business plan is often written to outline your corporate strategy, your goal and vision, as well as how you intend to accomplish them. It is possible to establish a business plan for an already-running company, but you would only do this if you were seeking to move your company in a fundamentally different direction.
5 Steps to Creating a Business Case
Your business case must explain why making that certain investment or undertaking a particular effort is a smart move for your company, in addition to crucial facts and data. When in doubt, keep it simple, keep it short, and always try to convey the importance of the project. Don't panic if this is your first attempt at devising a business case. To create a powerful one, adhere to these five stages.
You are not required to create a business case by yourself. As an alternative, ensure that the relevant stakeholders and team members are responding to the pertinent sections. The financial team should assess any budget and risk management parts, while the IT team must be engaged in any technology and timing choices. Keep in mind to contact subject matter experts when developing a business case for a new project, product line, or consumer persona.
Plan to Write Your Business Case Out of Order
Some of the initial items in your business case, such as the executive summary, should really be written last once you possess all of the materials and knowledge necessary to make a sensible recommendation. Your executive summary must summarise all of your research results and offer a suggestion for the company based on a number of different considerations. You can ensure that your executive summary contains all of the necessary information by obtaining all of those elements up front, such as the project's objective, financial details, and risk.
Build Your Business Case Incrementally
A business case outlines a large investment that your organisation will make. Similar to this, merely developing a business case requires a considerable time commitment from you. It's not like every endeavour is appropriate for your company, so be careful to verify your progress along the way with major stakeholders. You do not want to spend days and weeks working on this report to have executive stakeholders reject it immediately.
To determine if you should move forward with this endeavour, think about doing a "soft launch" with your sponsor or some other executive stakeholder with whom you have a consistent relationship. Then, as you develop the various portions of the business case, follow up with your relevant stakeholders to ensure there are no objectionable points.
Refine the Document
You may be required to go back and edit certain elements of the business case as you develop others. For instance, be careful to modify any budget-related identified risk once you and your finance team have completed the cost-benefit analysis.
Do the last read-through of your business case with major stakeholders to identify any areas that may be improved before presenting it. You should also compose the executive summary, which will appear at the start of the paper at this time. The size of the executive summary should just be one to two pages, depending on how big your business case is.
Present the Business Case
Introduce your concept with a succinct elevator pitch that addresses the what, why, as well as how of your idea. Consider this opportunity to discuss the existing business requirement, how your solution will answer a need, as well as the advantages it would be for the company. Any concerns or problems you believe your audience might have should be addressed.
Don't read through every page of your business case. Instead, provide the material to the stakeholders in advance of the conference to give them time to review it. After your presentation, re-distribute the material, so interested parties can review the specifics.
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Business Case Checklist
Start with the why
Your chance to create a strong case for the new project comes in the first portion of the business case. Ensure that the argument you create speaks to the wants and requirements of your audience. This must be the final piece you write, even if it is the first part of the business case. Make sure you respond to: in addition to including the conventional components of an executive summary.
What business problem is your project solving?
This is your moment to discuss the significance of your initiative and the reasons executive stakeholders ought to take advantage of this occasion.
What is your business objective?
What transpires after a project is completed successfully? What does a project's success entail for your company, and how will you quantify success?
What role does this business case play in the broader business strategy of your organisation?
Make sure the key corporate objectives are tied to your suggested business case. Your business case's endeavour should advance the shared vision of your organisation.
Outline the financials and return on investment
The project financing basics should be described in your business case at this stage. You must construct this section in collaboration with your company's financial staff; don't expect to write it by yourself. This paragraph should specifically respond to:
- How much will this project cost?
Make some inquiries to determine the project expenses, even if the endeavour is entirely new to your business.
- How much does every individual component of the project cost?
Analyse the various project expenses in addition to calculating the overall project cost.
- What is the expected return on investment?
After discussing the expenditures, discuss how your business will profit from this project. Be sure to include a description of how you arrived at your ROI.
- How will this project impact cash flow?
Cash flow is the amount of revenue coming into and going out of your company. Major investments will severely impact cash flow since they will be expensive, but you must also expect a strong return on investment, which will have a favourable effect.
- What is sensitivity analysis?
Sensitivity analysis provides a summary of the degree of uncertainty in your data. Many factors will affect your business case, and be sure to describe the variables and how they can affect your forecasts.
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Any company strategy's implementation heavily depends on finding and implementing a nearly ideal solution at the workplace. However, this solution must be built on comprehensive and solid business case elements. Thus it is crucial to develop a powerful business case and guarantee that it is implemented correctly. A business case statement's main objective is to justify the start of a particular business initiative. An effective business case should persuade decision-makers to support a certain course of action. Follow Khatabook for the latest updates, news blogs, and articles related to micro, small and medium businesses (MSMEs), business tips, income tax, GST, salary, and accounting.