Writing a business case is a key competency for professionals seeking support for new projects, products, or strategic initiatives.
In essence, a business case entails a document that aids in justifying the decision to begin or even carry on a given project. When properly documented, it allows the management to see all the advantages and disadvantages of any planned operation and make a well-informed decision regarding its future. For instance, you can use it to start an online business.
We are going to outline here the four steps to building an effective business case. This simplified approach will take you through the steps of defining your goals to showcase the financial viability of a persuasive business case.
Step 1: Define the Purpose and Scope of the Business Case
Any good business case creation process starts with the proper purpose and project scope. Identifying the purpose helps you in directing the focus of your business case, and it also makes all the stakeholders aware of the core objectives.
- Establish the purpose: identify what it is that the business case is trying to achieve. Is it to introduce a new product, enhance an existing process, or get funding for a certain project? To this end, the setting of the purpose sets the tone for the rest of the case.
- Identify the scope: a well-defined project scope keeps the solid business case from becoming too broad or vague. Choose what areas you want to cover and limit your scope so that a deluge of information does not overwhelm your readers.
The focused approach since the very beginning has aligned your objectives and given clarity to your stakeholders.
Step 2: Set Clear Objectives and Success Criteria for Business Strategy
A strong business case document must be built on specific, quantifiable objectives with well-defined criteria on what will constitute success. Well-defined objectives will ensure clarity of end goals and project success.
- Define goals and metrics: define the goals that a business strategy is devised for. Is it revenue growth? Perhaps customer satisfaction and operational efficiencies? Each goal should be accompanied by measurable metrics, such as a certain percentage increase in revenue or perhaps a reduction in processing time.
- Align with organizational objectives: objectives of a business case are aligned with other organizational objectives. For instance, if there is one important objective that a company considers to be about sustainability, a business case can be crafted in such a manner that it shows how your recommendation furthers that objective.
Having clear objectives is critical for a successful business case creation process for the simple reason that this guides and thus provides a chance for accountability.
Step 3: Conduct a Thorough Financial Analysis
To get approval, your business case needs to stand on financial viability. Decision-makers and key stakeholders have to be duly informed of the projected costs and benefits of the proposed initiative, what long-term financial effect it would have, and understand business benefits.
- Estimate project costs against benefits: within your project plan you should count the expected costs of materials, labor, and overhead. Set these off against expected benefits such as improved revenues, operations savings, and/or new markets.
- ROI and financial forecasting: You can underpin this with a return on investment calculation. Provide fully fleshed-out financial projections that indicate, over time, how the proposal will deliver value. A sound financial analysis provides stakeholders with confidence in your project’s economic feasibility.
Remember that the financials are part of those core elements in writing a business case that appeal to key stakeholders because they help explain how the initiative addresses fiscal objectives.
Step 4: Highlight Expected Impact and Define the Timeline
After stating the purpose, objectives, and financials, it is necessary to summarize the expected impact and timeline for realistic completion. This will help relevant stakeholders to imagine the overall benefit and understand the timeline required to see the results.
- Project the impact: Clearly explain what impact can be expected: short-term and long-term. Consider the aspects related to improved customer satisfaction, efficiency of operations, or growth in market share. Give concrete examples wherever possible to describe the potential value that may be derived.
- Create a timeline: Split the time of the project into stages, from preliminary measures to major milestones, all the way down to projected completion dates. The clarity that this offers the readers of how soon they will have results is conducive to your feasibility within the proposal.
Emphasizing both expected impact and timeline will help project stakeholders appreciate what pragmatic value there is in your project proposal and thus strengthen the business case for a new product or initiative.
Additional Tips for Solid Business Case Creation
Pulling together a compelling business case involves so much more than data. Here are some additional tips to support the development of an even stronger case:
Use Visuals
Sometimes charts, graphs, and tables can take huge amounts of complex data-particularly financial information and timelines, and render it more digestible.
Address Potential Risks
Identify potential risks that may come with the business proposal and suggest ways you may mitigate those identified risks. This helps your case be all-encompassing, contemplating certain challenges.
Gather Stakeholder Feedback
Finally, before finalization of the case, seek input from key stakeholders. Their input will ensure that the case has value to them and enhances the likelihood of buy-in.
These above tips will enhance the credibility of your business case and assist external stakeholders in understanding its value.
Utilize Numbers
Numbers are more compelling than words in developing business cases. The senior management will be more captivated by numbers since they demonstrate your knowledge and showing more clearly your project management plan.
Be Brief
Bear in mind the project stakeholders have a lot of other things to do. Therefore, keep your details brief, but don’t mention anything crucial. Use the mentioned business case templates to assist you in including the necessary points.
Keep the Design in Mind
Consider the layout. Although you don’t require hiring a professional designer, ensure that the document is simple to read and professionally written. The idea is to deliver presentable work to your target audience.
Check out our free business case template.
6 Aspects of a Helpful Business Case
The following six aspects characterize an excellent business case. Utilize them when writing down your next document to simplify the process. Read on to learn more about these elements:
Executive Summary
As the name suggests, this section represents the document’s summary. When presenting it to C-suite executives, they would most likely not go through the whole thing due to their busy project schedule. As such, this section should briefly tell the audience the kind of initiative you are proposing, the cost, the type of personnel needed, and the advantages.
Project Definition
Projects involving the creation of new services and products call for an in-depth business case comprising an assessment of the existing market. For example, it should focus on competition and customer interest, among other aspects. Also, talk about how you plan to market the new offering. Talk about the new service or product’s validity and demonstrate its impact on the market
Marketing and Market
Projects involving the creation of new services and products call for an in-depth business case comprising an assessment of the existing market. For example, it should focus on competition and customer interest, among other aspects. Also, talk about how you plan to market the new offering. Talk about the new service or product’s validity and demonstrate its impact on the market.
Risk Assessment & Strengths
SWOT analysis is also crucial. It helps to show the company’s strong points, weak areas or vulnerabilities, new/emerging growth opportunities that need exploring, and aspects that threaten your organization’s growth. This section not only helps in strengthening your position but also assists the senior management in seeing the value of your project.
Timeline
Utilize this part to give the entire undertaking a time frame. When can the completion of each stage be expected? Additionally, how will the project’s progress be reported, who will make the decisions and how, and who will be recruited to help complete the initiative? All this information should be included here.
Financials
Lastly, ensure that you address the financial aspect of the entire operation. You must show that your proposed initiative is practical and the forecasted benefits will be reasonable compensation for the expenses amassed.
Conclusion
What separates a stalled initiative from a project with enthusiastic support is the effective creation of a business case. With a defined purpose, clear business objectives, a solid financial analysis, and an impact highlight, you provide an orderly and persuasive case. A well-worked business case assures not only buy-in but also alignment with your project to reach a variety of organizational goals for long-term success.
Working your way through this 4-step guide will enable you to make a business case that resonates with the audience and conveys a sense of value about your proposition.
