Business case: create it successfully in 6 steps

A Business Case is a document that summarizes the main aspects of a business action and is usually used to justify an investment in a project. Here is a six-step guide to developing it…

You can be the best captain of a ship, with the best helm, the right bow and good winds. But if we are blindfolded, we will hardly reach a good port.

Precisely, a “business case” is a document that summarizes the main aspects of a business action and lets us gain clarity to justify an investment and sign the service level agreements needed for the plan to develop properly, based on pre-set effectiveness and efficiency indicators.

The basic principle of the analysis is to break a business action (such as a campaign, an event or direct marketing actions) down into its most relevant processes, to analyze its performance and forecast its results.

1) Put it in context

The first step is to put the action to be developed in context, according to the market situation the company is in, and to define the business goals to be reached.

For example, if we are analyzing the restaurant business, it is clear that the crisis sets a very different context from the previous year for the business actions to develop.

In fact, one of the main services hit by the recession is the dining-out business, which shrank by almost twenty percent according to industry data. Consumers look to save by bringing entertainment and food indoors.

This sector therefore faces the need to change its mix of strategies. One example would be to opt for:

1. Rationalize and make use of internal resources
2. Keep prices instead of lowering them
3. Offer an additional service that makes the offer more attractive, which means adopting measures that cut costs but preserve the value proposition.

2) Conceptualize

The Business Case must conceptualize the action. For this, it is necessary to analyze it in terms of overall positioning, a survey of the competition and a demand segmentation study that lets us strengthen the business model based on the business action we are developing.

When, in the 90s, American Express launched the “Black Card”, a black card with unlimited credit for very few members, it sought to create an offer that could escape the mass market of the Gold and Platinum cards and, at the same time, reinforce brand positioning and the exclusivity and sense of belonging of the highest segments.

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3) Summary

Start by summarizing the commercial offer: set the price, the validity, the product attributes, the preferred channels and the access conditions, among others.

For this, of course, you must know the behavior of the segment we are addressing. That way, you can adapt the communication strategy and explain the choice of channel based on consumer preferences.

At this point, you must also identify the tasks to carry out and who is responsible for each of them.

4) Communication strategy

After summarizing the commercial offer, you must design the communication strategy based on the target segment. Define the style and tone of the communication, the concepts to communicate, the graphic pieces and the media strategy.

Continuing with the credit card business, the message can be functional or emotional. That is, you can highlight components, such as the payment method, that link the offer with the product specifications, or use other attributes beyond the specifications, such as security, belonging or status, which relate to the brand through the desire to get the card.

The chosen attributes will determine the tone, style and media that best capture the attention of the group we want to address.

You must also decide in your Business Case the channels through which to communicate with potential customers. Several studies on the behavior of the highest segments (within the ABC1 socioeconomic level) show a greater preference for direct information channels such as email and printed brochures, and lower acceptance of media such as phone contact and personal selling.

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5) Operating process

Your Business Case must describe an operating process based on the opportunities detected in other reference business actions, which lets us size the current capacity according to those needs.

What percentage of resources is applied per business action? How many hours do I have available per resource? How is attention distributed by time slot?

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6) Agreements

Once you manage to define, contextualize, set tasks and responsibilities and the communication strategy, we can coordinate the different processes and tasks through service agreements between the different actors responsible for the action plan.

A service agreement is the commitment to deliver tasks that each department or person in the company takes on. For example, how many prospects will the sales department visit each week? How many articles or contacts will the Public Relations area generate? How much research will the R&D department provide? How much training will the Human Resources Department offer?

7) Profitability analysis

Finally, the Business Case must budget the actions and calculate the return on investment, the payback period, the internal rate of return and the net present value. This will make it possible to identify whether the business action justifies the investment, and whether it is feasible, profitable and synergistic for the organization.

In short, the Business Case lets you capture various components in a document that integrates and shares views on the dynamics of the whole organization, summarizing the fundamental processes of a business action.

It is a document that records the history, consolidates the work of the different areas and becomes a fundamental tool in the decision-making process, which feeds back into itself, generating value for the company.

Below I leave a Business Case template in English that I think can help you:

Recommended source: https://whatis.techtarget.com/definition/business-case