May 22 / Mollie Garvey

The ABC’s of Building A Business Case

Me: I have a great idea to help our team, but I need $200K to make it happen.

Manager: $200K of OPEX or CAPEX?

Me: (At that time, I wasn't sure of the difference) It's for an addition to our building and some upgrades so we can . . . (manufacture more).

Manager: Ok, so you need CAPEX. We do CAPEX planning in August for the following year, and it is February. So, you are too late to get it into the budget for this year and very early for next year’s budget. Where is your business case?

Me: (getting flustered) Umm, business case? I don't have one. Why? Don't you think this is a good idea?

Manager: If I funded every good idea, we would not be in business.

I paraphrased this story to spare you the technical chatter and solutioning in the middle, but you get the hint of how that conversation went down. I had a great idea, and I was confident I could execute it. What I did not have was a business plan to communicate my strategy to the decision-makers and budget approvers for their blessings.

If you are curious to know how things turned out after that conversation with my manager … well, I did not get the funding that year. I was too late in the budgeting cycle to present my case. You see, I was not aware of how early budgeting discussions start in large organizations (and how deep some of them go). However, the following year I was better prepared and ready to go. I had moved on to a new role and had a different project idea that needed CAPEX funding. Armed with the what, the why, and how much, I prepared a solid business plan, fought for my project, and (drumroll, please!!) secured funding!

Great, so now you are thinking good for you (thank you!!). But if you find yourself saying that with a hint of sarcasm, perhaps you have an exciting project proposal that you believe is good for your organization, but you have no idea how to secure the funding you need to make your impact. Don’t worry. What you need is a clear and relevant business case. Let us dive into the ABC's of building a business case.

"A goal without a plan is just a wish." Antoine de Saint-Exupéry

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The ABC’s of Building A Business Case

A. What is a business case?

Simply put, your business case is a written-down version of your project pitch. It is your chance to provide insight into the underlying problem, rationale for the proposed solution, an explanation of why now, the cost to implement it, and the risk of doing nothing. Most importantly, it is quantifying the VALUE of why you are choosing to solve it now.  

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?

Really anything you want that gets your point across. Here are some of the typical questions I try to answer when writing my business cases: 

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?

  • When 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!

  • Assumption and risk are two sides of the same coin. If you have significant risks, acknowledge them.

  • 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).

A good plan today is better than a perfect plan tomorrow. ~ George S. Patton

C. How do I present the final business plan document?

There is no one correct answer to this. You can choose to present your business case in any format. I prefer written paragraphs, middle school book report style with headings to separate my topics and tables, but you may choose slides, or any other format that you are comfortable with. The key thing to remember is it is a written communication for a business audience, so what you put together should stand on its own without your verbal presentation and commentary.  

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

Double-check for typos and grammatical errors. Then, triple-check.

Summing it up

Building a business case will show your manager (and the rest of your team) that you know what you are talking about and showcase your ability to model project financials and create a long-term strategy. It is critical to learn how to present your ideas in writing, and there is no better way to practice your written communication than through building a (better) business case.

Here are some external resources to help you get started to crafting your business case:

https://www.smartsheet.com/business-case-analysis-examples

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.

 

https://hbr.org/2014/07/the-right-way-to-present-your-business-case

Tips for presenting your business case.

 

https://store.hbr.org/product/hbr-guide-to-building-your-business-case/15038

Take a deep dive into writing your business case with this book from HBR.

 

https://www.softwareadvice.com/resources/project-management-business-case/

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.

 

https://www.coursera.org/learn/finance-for-non-finance#syllabus

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 richa@pinkcareers.com.

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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.


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