The Business Case: Everything you need to know about pitching ideas.
What is a business case?
A business case is essentially a story. It tells the story of a goal, what it means for stakeholders, and how to reach it. It provides a roadmap for overcoming the obstacle and forecasts how surefooted this path should be.
You will never know how a horse will pull unless you hook him up to a heavy load.
– Paul William “Bear” Bryant 1913 – 1983
Head coach of University of Alabama football team; named three times Coach of the Year.
What are the types of businesses?
Based on their commercial output and the nature of their business activities, there are four types of businesses. The table below gives you a good idea of the types and sizes of businesses that exist.
DESCRIPTION EXAMPLES SERVICE Provides intangible products like professional skills, expertise, and advice. Berkshire Hathaway
JP Morgan Chase
Boston Consulting Group
Merchandising Purchases products wholesale and then sells them retail. The business can turn a profit by reducing the difference between wholesale and retail prices. Walmart
Manufacturing Purchases raw materials to create products for sale, incurring labor costs and overhead costs. Volkswagen
Royal Dutch Shell
Combination of any of the above-mentioned business types. Apple
What is the range of funding for business cases?
Fundings can be as low as zero or as high-end as billions of dollars with an average of $500,000. The higher the amount, however, the greater chance of project failure.
Businesses can usually get funding from their savings or incoming revenue. Other options include grants, loans, ownership interests, partnerships, and grants.
A Project Management Office (PMO), with an average annual budget of US$500,000 and a project budget of US$10,000,000, has been established.
The average PMO budget is 5% of total project budget (median), an increase of 0.6% over 2014. [From this report courtesy pmsolutions.com]
What is the purpose and scope of the business case?
A business case analysis can be used to convince decision-makers that your idea is superior to all others. It provides transparency about market opportunities, and allows stakeholders and leaders to make evidence-based funding decisions. Business case analysis is also useful for performance monitoring and can be used to encourage accountability.
Who should build a business plan?
Anyone who discovers an opportunity that could benefit the business stakeholders can create a business case. This task is usually done by the Project Manager, who works in collaboration with the business leader and executive sponsor.
Are there any principles that can be used to help you make the business case?
Yes. Here’s a list of things you should keep in mind when presenting your business case:
Give them a reason for caring: Leaders have many business cases to review. You can make your organization stand out by tapping into a key motivator.
Keep it simple: The more clearly and concisely you explain an idea, the greater the chance it will resonate.
Avoid conjecture. Conjecture and assumptions can detract credibility and cause leaders to question your knowledge.
Avoid jargon. You never know who your business case analysis will end up in, so make sure it is clear and use language that anyone can understand.
Capture the vision: Leaders can use story and visuals to paint a picture of their future vision.