As a manager or leader in an organisation, chances are that you will find yourself in the position sooner or later when you are asked to produce a business case. It might be for example to:
• Secure investment for a new piece of equipment
• Get support for an increase in your staffing establishment
• Get support for a new product or service
For many managers and leaders, the thought of producing a business case fills them with worry. By following a systematic step by step process set out below, you can produce a winning business case and get the outcome you desire.
State the current position
The first thing you need to do is provide a brief summary of the current position for the area being addressed. By far the most effective way is to focus on the problems being created or the opportunities missed. For example:
• If bidding for new equipment you might talk about the capacity constraints or efficiency gains
• If bidding for new staff you might focus on the revenue your competitors have that is low hanging fruit and could easily come to you with some staff investment
• If it is a new product or service, you can focus on the gap in the offerings and how what you are proposing will fill it
The underlying message here is to create a case why the current position is less than ideal.
Make your case
There are two main things to consider in making your case.
1. Operational or business case
2. Financial case
It is essential that your case is robust in both of these areas; otherwise you run the risk of getting shot down in flames.
When making the operational case, really focus on the benefits. Questions to ask your self include:
• How will this impact on our sales volumes
• How will it contribute to processing efficiencies
• How will it give an edge over competitors
• How will it impact on client/customer satisfaction
• How will it impact on employees
• How will it contribute to environmental issues
• How will it contribute to social responsibilities
In making the financial case, think about:
• How long the investment will take to get pay back, usually measured in years.
• The projected percentage return on the investment, usually measured as a percentage. Some businesses have a minimum percentage return on investment so find this out
• The impact on profitability, as a result of increased sales revenue and/or cost reduction
In doing this it is best to produce summary tables in the main body of the business case and the detail in an appendix
Produce a benefits realisation plan
One of the areas often neglected is the benefits realisation area. You may be familiar with this. A case is made promising the world but it never materialises.
Clearly state the benefits that will be delivered and how you will measure achievement. Make sure that your benefits are very specific and measurable. For example, increase customer satisfaction scores by 10% compared to 2006 by the end of December 2007 is specific. Increase customer satisfaction is not specific or measurable.
Produce a risk management plan
The business case is based on the best information that you can access at the time. Chances are that some risks will show up. Include a simple risk matrix showing the:
• Proposed handling strategy
• Estimated financial impact if the risk materialises
This will demonstrate to any decision makers that not only are you thinking about downside risks but also pro-actively managing them.
Develop a performance monitoring framework
It is all too easy to fall into the trap of taking your eye of the ball when you get the green light for the financial support. Avoid this at all costs. Put in place a strong framework for monitoring progress and producing any reports that are required.
At the end of the day, your ability to secure investment is down to you being able to present a well structured and thought out case. Use this simple step by step approach to give you a flying start.
Since 2006 I’ve worked with in excess of 6,000 accountants and professionals in workshops, seminars and one to one helping them land their next jobs and become better leaders, presenters and business partners. Before that I spent 25 years in accountancy climbing the career ladder from Payments Clerk to FD. I’m a CIMA Fellow, Certified Professional Coach and Team Coach Facilitator.