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The ABC’s of Building A Business Case
A. What is a business case?
Business cases are often lengthy, boring documents filled with numbers. As an engineer, I love numbers, but when I am the reader or the decision-maker, I want you to TELL me why I should care. I am not keen to see tables embedded into prose or interpret tab after tab of a spreadsheet. The thought of going through that much information makes me want to take a nap. Just tell me a few key numbers (e.g., NPV and IRR*) to quantify your impact and leave the rest for a follow-up discussion or presentation Q&A. If you are using data, charts, or tables, make it a point to add some descriptive information to convey the proper context.
(*NPV: Net present value and IRR: Internal rate of return)
B. What goes into a business case?
1. What is the underlying business problem?
Lead with the need and give as much detail as is appropriate for your audience.
2. What is the solution? Are there alternatives?
Think of the good, better, and best options. For each solution, quantify the benefits, forecast the cost, and figure out feasibility.
3.What is the value of the solution to the company?
What incremental value would the company get for additional investment in a “better” option over a “good” one?
you are presenting this part, do not forget to include your assumptions. It
is critical to state if you are basing your analysis and resulting
recommendation on something like a significant market or policy change.
Every analysis has assumptions because you are predicting the future!
and risk are two sides of the same coin. If you have significant risks,
- Lay down the high-level cost of the solution. When presenting multiple solutions, use a table for easy comparison. Calculate NPV and IRR as well and summarize the comparison. It is also good (but not critical, in my opinion) to include solution payoff periods. If NPV is positive, the project is investable, so the payoff is a moot point.
4. What is your proposed recommendation?
You must provide a recommendation and your strategy for solving the problem. Convince your stakeholder why your proposed recommendation is the preferred solution to the problem.
5. Bonus question: Do I need a spreadsheet?
Maybe but do not rely on anyone reading it. Include a spreadsheet as supporting evidence in an appendix.
You can choose to include additional background information, details on each of the solutions, and timelines for implementation as is appropriate for your project but remember this is a preliminary analysis. You only need enough points to get to the next step, which will include building out more details for your project. Do not exhaust yourself at this stage with analysis because you might get a ‘no’ response (and that is ok, everything cannot be funded).
C. How do I present the final business plan document?
If this is your first business case or you want validation that you are on the right track, I recommend getting a trusted advisor or team member within your company to read a draft and provide feedback. Each company is different in its expectation of what to always include (or never include) in a business case. You want to make sure that your deliverable measures up to the management team’s expectations when they read it for the first time. Do your homework and avoid being caught in a situation that needs to go back to include what’s common practice for your company.
Bonus Tip: Proofread
Summing it up
Here are some external resources to help
you get started to crafting your business case:
Good explanations and some useful templates that can help you think through the content of your business case, including a new product business case template.
Tips for presenting your business case.
Take a deep dive into writing your business case with this book from HBR.
Working on a digital project? Here’s a great resource to get you started with a handy table of benefits and costs to consider including in your business case.
More detail that you need to build a project discounted cash flow model (largely covered in week 2 of the course) but some good stuff if you want to get a broader understanding of finance (after you build your model).
If you have a personal story and lessons learned to share about how you’re owning your career, write to us at [email protected]
Mollie is an avid reader, lover of fish tacos and honed her public speaking skills through yoga teaching. She got her first management role 3 years into her career and has been building teams, operations and globally used products ever since.
With a double masters in engineering (MEng, Texas A&M University) and business (MBA, Duke University) she brings real-life stories, practical advice, and resources to first time and seasoned managers looking to build strong, self-empowered teams who can get things done.
WANT TO LEVEL UP YOUR LEADERSHIP SKILLS?
Get unlimited access to live professional development classes and learn how to communicate assertively, overcome imposter syndrome, lead effective virtual meetings, and delegate like a pro. Learn the skills you need to succeed at the workplace, when you need it.