How To Write a Business Case (With Template)
By Indeed Editorial Team
Updated 4 January 2023
Published 26 May 2021
The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.
A business case provides the justification for the undertaking of a project or portfolio. Before investing in a major business plan or product it is important to have an all-round business case. After doing an investment appraisal following due cost-benefit and risk analysis, the business case provides the rationale behind a preferred solution.
What is a business case template?
A template for a business case is a primary requirement of a business plan and a valuable resource for companies to reference whenever they are preparing a case for a new project or initiative. The aim of a business case is to convince decision-makers of the value behind the actions planned for a specific project. A good business case explains the problems or issues in a project and identifies all possible options required to address them. This allows the decision-makers of an organisation to determine the best course of action.
Five elements of a business case:
Economic analysis: The investment options are evaluated to calculate the return on investments.
Strategic reasons: It is a case for change.
Commercial approach: It is derived from the analysis of various business strategies.
Management approach: It determines the governance structures and the interplay of roles.
Financial case: It is determined by measuring how affordable the project is to the organisation within a certain time frame.
A business case when approved shows the decisions taken by the organisation's key stakeholders to achieve the best investment returns after considering all options. The business case then results in the formal startup of the project.
What is the scope of a business case?
The scope of a business case includes both external and internal factors. A business case begins by indicating the purpose of the project or what the business is all about. The introduction should be followed by a paragraph briefly identifying the problem in the project. This should be in reference to the organisation's vision and how addressing the issue would align it with the company's goals. Next assess the problem in detail and include the results of the analysis that you or others have carried out to study the problem.
Discuss the options available - what are the benefits of the project, the costs involved, the resources required and analyse risks that could hamper the successful implementation of the project. Based on this analysis make a recommendation on the preferred solution. You could also include a project outline plan which would show that you have thought about the project in detail and even include information for further analysis. The scope of the business case should also include proposals for the governance and overseeing of the project and taking critical decisions. Conclude by suggesting why the business plan was required to address the problem in accordance with the company's plans and strategies.
How to write a business case
Business cases require a detailed structure and there are a few important things to remember. It is important to keep the language simple and avoid business jargon. Use short sentences and several sub-headings in the paragraphs. The point of the business case is also to develop a sense of urgency in the writing to suggest that a decision is needed by a particular date.
Use the following steps to put together a coherent and effective business case:
Prepare an executive summary: Confirm the opportunity of the project by identifying the problem, the options and the preferred options. If you need assistance, consider reviewing an example of an executive summary to get you started.
Provide background information: Remember that some people reading the document might have little knowledge of the significance of the project. Explain why the project needs to take place, what projects have been similar, and the events which led to the business case.
Have a project definition to clearly identify all the critical aspects of your plan: Determine the business requirements and how your project intends to meet them. The business requirements include such things as a preferred supplier, budget, and time frame.
Shortlist solutions: Research, analyse and evaluate the solutions in terms of the strategic and financial value they bring to the organisation. Study them from the criteria that you have been provided, like risks, costs, benefits and timeframe. This section of the business should impress upon the stakeholders that you have researched the project from all angles.
Present your preferred solution: Summarise how this solution would be better than the alternatives evaluated. This might be the most profitable, quickest or most affordable solution that meets the business requirements and evaluation criteria.
Demonstrate strategic alignment: This section highlights how the project contributes to the bigger interests and strategic plans of the company. In smaller organisations it is easier to understand how the business aligns with the company's goals. In larger firms, however, identifying the strategic alignment of a project's goals with the organisation's overall objectives is not always a simple exercise.
Specify resource requirements: Clearly identify the details of the resources that will be required to complete the project. Remember that resources are not just the physical items needed but also the financial assistance, human resource and intellectual guidance for the business plan. For example, apart from financial investments, you might also require IT resources, key employees and data storage facilities.
Outline the scope of the project: This gives the risk assessment as well as the benefits and limitations. Any business will have its own share of risks that needs to be highlighted during the due diligence process of the plan. This is a two-fold plan. To make an informed decision, it is important to indicate what risks might surface while the project is ongoing. This can be done using a risk assessment matrix. Compensate this by making a business plan which clearly indicates the potential for benefits. This can convince the decision-makers to go ahead with the plan.
Identify a timeline for project implementation and completion: Divide the project into several management parts and determine how long will it take for the completion of each stage.
Complete a financial analysis: The scale of the project determines whether a simple report or a detailed financial analysis with forecasts and details will be required for the business case. Financial analysis is important to convince the stakeholders of the economic viability of the project. This section shows how the project is affordable and can be funded by the firm to deliver value to the organisation, both in the short and the long term.
Prepare a project implementation and organisation plan: Determine how the project will proceed, including who will govern it and who will authorise sign-offs, and at what stage. Stakeholders want clarity. Provide them with insights on who will be involved, whom you will report to, what information you will provide to the reporting manager and the metrics which will be used to determine the success of the project.
Consider including an appendix: You can use this section to showcase the reports, detailed research, financial models and analysis in greater depth.
Importance of a business case
Creating a comprehensive business case will help you to elevate your project and present it across various departments for approvals. As senior management is often time-constrained, having a concise yet thorough business case helps to draw the attention of the stakeholders in a positive manner.
If a business case has a definite outline, it can easily create additional documents like a business management plan which can then result in more actions and milestones. Create a hook by translating the facts and figures of the business case into a story. This helps to connect with the audience by appealing to emotion. Present how the project will benefit people.
Make the presentation of the business case interactive. Engage with the stakeholders and seek their feedback and opinion during the course of the presentation and respond proactively to any questions raised. You can also follow up individually and ensure that you address any concerns raised in confidence. Finally, after completion of the project, you can analyse the level of success achieved by your business case by comparing your original proposal with the post-project evaluation.
An example of a business case template:
A business case template should include the following:
Executive summary: Provide a brief summary of your proposal, the problems involved and how you intend to address them.
Finance: Including a financial appraisal for the project is crucial for obtaining any financial resources required. Show what is the financial implication of the project, while identifying the viability by comparing various costs involved and the cash flow required. The financial analysis should also include sensitivity analysis where alternatives are analysed and possible scenarios and risks evaluated.
Recommendation: This is the most detailed section. Outline the key details and give a brief overview of the reasons behind this project. Divide it into parts to include the following:
Customer and employee benefits
Market analysis and improvements
Project organisation and reporting: Specify the relevant roles and reporting structures within the project. Identify who you are going to report to and the due dates for completion of various stages of the project. The metrics involved also need to be specified to evaluate project success at every stage.
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