I recently did a review of a gift business and found out that there were many holes in it. The business owner has a beautiful idea of the gift business; they have been running it for a while now but have not had a proper breakthrough and it’s been too many months. It was decided that the business needed a complete overhaul after a business case was presented.
What is a Business Case?
A business case captures the reasoning for initiating a project or business. It is often presented in a well-structured written document. A business case is a written or verbal value proposition that is intended to educate a decision maker and convince them to take some kind of action.
It is a decision-making tool used to determine the effects a particular decision will have on a business’ profitability. It is a justification for a proposed project or undertaking based on its expected commercial benefit. At its simplest, a business case could be a spoken suggestion.
A compelling business case adequately captures both the quantifiable and non-quantifiable elements of a proposed project. The logic of the business case is that, whenever resources such as money or effort are consumed, they should be in support of a specific business need and profitability.
What are the components of a business case?
- Business opportunity. This is either strategic or tactical. Here you do your market survey, your competitive analysis and your financial analysis.
- Return on investment. Financial forecasting is what you do here, and this is estimating or predicting how a business will perform in the future. Here your exact financial needs and estimated financial needs are spelt out properly. Also, your needed resources are considered here. It’s okay if you don’t have the exact forecast for some of your resources, these will come under your estimated financial forecast.
- Risks. Here, you prepare yourself for every potential risk, major and minor. How can you avoid certain risks? What are your steps to reduce the negative effects of threats and disasters, that eventually happen, on your business continuity? Etc.
- An important part of your business case is the alternative to the business you are presenting a case for. What else can be in place of this business if the forecast says it is not viable?
Make sure you have a strong selling point for your business case as this is pivotal to the viability of your business.
Who knows, a business case could have helped Barcelona in their match against Bayern Munich. Only way to find out – They should do a business review. lol.