Differences between Business Case and Business Plan

Introduction

It is crucial that a business possesses a business plan as well as a business case in for it to succeed in the changing business environment. Both documents help a company to use the available limited resources effectively and efficiently. Both the papers assist a company to assess its standards of productivity and determine whether it is performing to achieve its objectives. They help an organization make the necessary changes to help increase productivity (Harvard Press, 2013). This paper discusses in detail the differences expressed in both documents. It reviews in detail the different fields in which a business plan and a business case will vary. It also researches the use of both in no- profit organizations or government institutions.

A business plan is a written record that describes in detail marketing, financial and operational path of a business to achieving its goals (Benson& Bugnitz, 2004). A business plan will focus on the business objectives for the organization. A business case is a printed document that justifies the decisions in an organization meant to convince the decision maker to approve some action. A business case focuses on the business objectives of an action taken by an organization (Schmidt, 2002).

A major difference between the two documents is the level of detail and the purpose. The purpose of a business case is to determine the business progress of a proposed project as part of the valuation and assortment process (Cohen& Graham, 2001). A business case also demonstrates how the project integrated with its project life cycle and whether the business venture will contribute to results (Cohen& Graham, 2001). The business case illustrates how a particular project will contribute to the company’s economic value (Schmidt, 2002). It shows in detail how the project will align with and support the strategy of the organization (Benson& Bugnitz, 2004). A business plan adds analysis and data collected during the planning stage. It also highlights factors considered in the business case that get incorporated into the plan (Cohen& Graham, 2001). It also features the actions, tasks and events that need to take place to make sure that the plan succeeds. Businesses utilize the business plan to manage the project outcome lifecycle (Cohen& Graham, 2001).

Although business plans and business cases have some similarities in structure, they all possess key elements that all potential investors expect to find. Both documents share an executive summary however the other components of the statements vary. Companies will apply both statements to make predictions related to operations and costs. Companies use a business case to make predictions on the results expected in cash flow. They also apply this document to make predictions about potential financial impacts the company might experience when they make a decision (Read et al., 2010). Institutions use business plans to predict the performance of the organization, especially in the fields related to the income statement.

Both the business plan and case vary in the key metrics carried out during their development. A business case uses complicated tools such as Net Present Value (NPV) and Internal Rate of Return (IRR). It also applies tools such as the Rate of Return (ROR) and Total Cost Ownership (TCO) to carry out financial metrics. Business case metrics mainly focus on the probable flow of cash and also significant not- financial impacts (Melton, 2009). The business plan evaluates performance in fields related to sales, profits, and the health of a business. It mainly focuses on the contributions these aspects make the balance sheet categories (Melton, 2009).

A difference arises when we review the purpose of both statements concerning nonprofit and government organizations. A business case in nonprofit or government organizations extends its limits to benefits and the costs to the population served and also the corporation itself. The business plan focuses on the requirements of funds and budget as well as the capacity to operate at the budgets limits (La Piana et al., 2012).

When assessing the two documents considering the basis of development is crucial. A business case of an organization lays its basis on the costs and the benefits created for the case and applied to one or more action scenarios (Cox& Radwan, 2015). Companies will organize a business case for every single action or decision and its potential substitutes (Cox& Radwan, 2015). A business plan embraces the entire business model for the organization and shows where and how the company builds capital. It also reveals the expected trends and competitor actions (Benson& Bugnitz, 2004). The business plan has no limits as such gets created for either a single action, many related actions or even the whole organization (Read et al., 2010).

Conclusion

There are several discrepancies between the two written statements, but both are fundamental to the success of an organization. A company should utilize the business case into a business plan to ensure the solid implementation of any project in the organization. It is imminent that any aspiring entrepreneur should have information on the differences between the two documents case so as to apply the effectively in business’s operations.

Reference

Abrams, R& Abrams, R., (2003). The Successful Business Plan: Secrets & Strategies., California., The Planning Shop.

Benson, R& Bugnitz, T., (2004). From Business Strategy to IT Action: Right Decisions for a Better Bottom Line., California., John Wiley & Sons.

Cohen, D& Graham, R, (2001). The Project Manager's MBA: How to Translate Project Decisions into Business Success, California, John Wiley& Sons.

Cox, J., Radwan, S., (2015). ASAE Handbook of Professional Practices in Association Management., California., John Wiley & Sons.

Harvard press., (2013). Developing a Business case., United States., Harvard Business School Press.

La Piana, D., Gowdy, H., Rose, L& Copen, B., (2012). The Nonprofit Business Plan: A Leader's Guide to Creating a Successful Business Model., Tennessee., Turner Publishing Company.

Melton, T., (2009). Managing Project Delivery: Maintaining Control and Achieving Success., Burlington., Elsevier Limited.

Read, S., Sarasvathy, S., Dew, N., Wiltbank, R.,& Ohlsson, A., (2010). Effectual Entrepreneurship., U.S.A., Taylor & Francis Publishers.

Schmidt, M., (2002). The Business Case Guide., Boston., Solution Matrix Limited Publishers.

Schmidt, M., (2013). Business Case Essentials: A Guide to Structure and Content., Boston., Solution Matrix Limited.

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