Business Case vs. Business Plan Research
Posted: Jan 15, 2019
is no better way to ensure success in business than having comprehensive business documents. Although the old school of thought can tell that success in business rests with the entrepreneur, modern research and studies have shown that a business requires both a business case and business plan for success. However, a business may not stand to gain much from the mission-critical documents without understanding them. Comprehensive understanding of the documents requires differentiating them and knowing their application areas.
A business plan is among the most important business components. A business plan is an important roadmap through which success in an organization will be achieved. It helps to evaluate business goals, comprehensive reasons why the goals are achievable, and plan for achieving the goals. A business plan documents the future of a business and where the business is headed. A business plan is not complicated as many would have thought. It ranges from a few sentences to hundred pages. However, as much as it will be simple, the few-sentence business should have a detailed business strategy for the future. Therefore, there is no standard way of writing a business plan (DeBoer, 1998).
It is clear that the size of a business plan does not matter according to the above description. However, the business plan should have some formal sections such as title page. Such formal sections will enable understanding and acting on the business plan. Furthermore, a business plan should have three important sections of business concepts, marketplace, and financiers. Such is a successful business plan that is likely to get approved in case it is necessary. The above three sections are further divided into (Viana, 1990):
- Executive summary
- Organization and management
- Funding request
- Company Description
- Product line
- Financial projections
- Market analysis
- Market sales
A business plan may focus on changes in company’s perception and branding by the customer. If the existing business would like to carry out a major change or would like to have a new line of product or service, it requires a business plan for at least three years. The investors are likely to expect a return on their investment after that period. A business plan can either be external or internal (Viana, 1990).
Besides the business plan, there is a business case that may look similar. However, a business case is a comprehensive persuasion prepared by a company’s department or another unit of the company to help in justification of a proposed project by anticipated income. Therefore, a business case helps to capture the reasons for initiating and funding a certain project within the company. It should be presented well and in written document. However, it may be presented verbally or in presentations. A business case works in such logic that an organization’s resource such as money should not be consumed without going to support a particular business need. A comprehensive business case should adequately capture both quantifiable and non-quantifiable features of a proposed project. A business case depends on the attitude and volume of the business (Carroll, 2010).
Project management methodologies require comprehensive and highly structured business cases. Therefore, business cases range from comprehensive and highly structured to informal and brief. Formal business cases include information that also serves as the project background, the anticipated business profits, other options, anticipated costs, gap analysis, and risks involved in the project. The business case project team should also consider doing nothing as an option, but it should include the risks and costs of doing nothing. The company then derives the justification of the project from the above information. It should be noted that business case is not prepared and developed by the project manager. The business case is prepared and developed by the stakeholders and the project sponsors. The business case is argued regarding cost-benefit analysis. The cost-benefit analysis includes both financial and non-financial costs and benefits. The cost-benefit analysis helps the business to have understanding and account of environmental benefits thereby understanding economic effects in details (Hart, 2000).
Similarities between Business Plan and Business Case
Both are mission-critical business tools with an aim of bringing success to the business. Their implementation requires approval by the company’s management if they are to proceed to the next stage. They are also comprehensive and have several divisions thereby making them formal. Unavailability of any of the components may make the management disapprove the documents by the lack of details. Although they may look different, they look to seize an opportunity in the market whose achievement may propel the business to the next business level thereby making the business gain competitive advantage (Boehler, 2009).
Both documents should be developed adaptable. It means that they should be tailored to both the size and risk of the business proposal. Additionally, they are business oriented in that they are focused on the impact and capabilities of the business as opposed to focusing on the technical side of the business (Boehler, 2009).
Differences between Business Plan and Business Case
There are as many differences as similarities between the two business documents. A business plan covers the whole business. Therefore, business plan impacts are felt in the whole business. On the other hand, a business case addresses a single line of product or department. Therefore, its impacts are felt along that product or in that department. A business case also gives room for choices in case the proposed choice is not considered. However, this is not true with a business plan(Walker, 2002).
The two documents are different in what they aim to achieve during their developments. A business helps to give explanations about the company by giving facts and figures where necessary. A business case is driven by the need to implement a project in the organization. Therefore, a business case helps the business in reaching certain goals and objectives by focusing on the current state of the company and how it can be improved. A business plan is about planning for the business now and in the future (Walker, 2002).
There are more about the business case and business plan than what the paper has discussed. However, it was worth to have knowledge of the two mission-critical business documents. There is the need for more research in the areas to unearth more information about them. Although the discussions in this paper may not be detailed, it can be used by organizations that would like to have an understanding how they can strategize for their businesses using the two documents.
Boehler, R. (2009). The business case for quality. Healthcare Financial Management : Journal of the Healthcare Financial Management Association, 63 (10), 62-6.
Carroll, A. B. (2010). The Business Case for Corporate Social Responsibility: A Review of Concepts, Research and Practice. International Journal of Management Reviews, 12 (1), 85-105.
DeBoer, D. R. (1998). The Business-plan approach to introductory microeconomics. Journal of Economic Education, 29 (1), 54-64.
Hart, S. M. (2000). Self-regulation, Corporate Social Responsibility, and the Business Case: Do they Work in Achieving Workplace Equality and Safety? Journal of Business Ethics, 92 (4), 585-600.
Viana, D. A. (1990). Sample business plan. A laser section business plan. Nursing Economics, 8 (3), 155-71.
Walker, J. W. (2002). Perspectives - Is Your Business Case Compelling? Human Resource Planning, 25 (1), 12-22.
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