What’s a business case, and what tips should you be aware of when writing one?
A business case is a document most businesses or individual business units use to explain a business idea and build a plan for its implementation. For large organisations with many initiatives in the pipeline, it can form the basis of approving or prioritising initiatives, and measuring success after these initiatives have been successfully implemented.
A business case typically details how an initiative can be implemented, from problem definition through to solution design and execution.
Ever wondered what the difference is between a business case and a business plan?
Business cases offer improvements to existing businesses, while business plans are targeted at implementing new businesses. Every business case should include the key sections outlined below, at the minimum.
1. Administrative Section
Every business case should have an administrative section that outlines the title of the initiative or idea, the owner or sponsor of the initiative, and the submission date. Some business cases may require an internal review before approval, especially when they have been explicitly created for a structured organisation with competing priorities. The sponsor is ideally someone that has budget powers and can influence the implementation of the initiative.
2. Executive Summary Section
The executive summary provides a snapshot of the entire business case but should be written last, and it should contain key points from each section of your business case. Ideally, the executive summary should include:
- A definition of the problem
- An explanation of the solution
- Qualitative & quantitative benefits
- Costs, risks & timelines
3. Problem Definition Section
This section contains a summary of the problem, potential causes, and the impact on the organisation or environment. A well-written problem statement can help trigger the interest of approvers or investors in solving the problem. As with all business case sections, it’s essential to write in plain language so that all audience types can understand what you’re trying to say.
4. Idea Definition Section
This section describes how the problem will be solved by the solution and what it will take to implement the solution. It should indicate why the solution will work and provide evidence to justify the effectiveness of the proposed solution. Alternative solutions should be considered as part of solving the problem, including the option to do nothing. In the end, this section should include a recommended solution.
5. Benefits Section
This section details the financial and non-financial benefits of the solution. It focuses on the most important benefits and should link back to the problems defined in earlier sections. This section should:
- Show how your idea will deliver intended benefits
- Include details of non-financial benefits such as increased competitive advantage, morale, market share, and differentiation.
6. Financials Section
Each business case requires a financial section that highlights the costs of investments, ongoing costs as well as positive financial impacts. This section should also describe the financial assumptions applied such as discount rate & NPV time horizon.
Your organisation may have specific assumptions and metrics to include in a business case. If so, specify these assumptions.
Learn more about what to include in the financial section of your business case.
