Essentials of a business case report.

What and Why a Business Case?

When an entrepreneur thinks of his plan, he may be having a very clear blueprint of his ideas. The same is true, when a manager thinks of some improvement plan in his areas of influence or consultant suggests some specific idea to his client. But having a great idea in mind will not help in convincing others like, the promoter group, the lenders, the investors, the governing board etc., in believing in the financial success of a project. These set of people will require some structured document that elaborates the plan and its justification in a form that is understandable. Such document is called as Business Case Report.

Association for Project Management (APM), defines a business case as,

“A business case provides justification for undertaking a project, programme or portfolio. It evaluates the benefit, cost and risk of alternative options and provides a rationale for the preferred solution”.

A business case in its simplest form may contain some basic information about the project, as may be required by a small group of people. But in general, they must capture detailed information forming the rationale and supporting evidences of the project or concept.

Often a business case may be equated with a feasibility report. Typically, a feasibility report is used to generate a go / no-go decision, while a business case is a subsequent step in the project execution process, where a project decision is made and the heading towards financing decision.

The structure of a business case report may contain,

  1. Executive Summary
  2. Organisational Analysis
  3. Market Analysis
  4. Technical Analysis
  5. Financial Analysis
  6. Risk and Return

In this entire reporting, Executive Summary is the portion that is most read by the senior management or senior level people in the investor hierarchy. It should be brief and appropriately capturing the contours of the project.

But because Executive Summary is the summarisation of the evaluation and evidences, this section is written when the entire analysis is completed.

Similarly, Risk and Return could form a part of each of the major areas of analysis and also compiled in the end of the assessment.

The Strength of An Organisation Writes the Success Story

Like in human body, a knowledgeable and fit mind is important for its functioning, in the implementation of a business concept or a project, the organisational strengths form a crucial part. For the purpose of clarity, let me explain that for setting up a viable business concept there remains the need of a business leadership team and to set up a physical project like, development of product or setting up a physical infrastructure, there remains the need of a project leadership team. In this sense, a project team becomes a subset of a business team.

Without a professional organisation the business or the project either do not exist or may not achieve the desired result.

The typical objective of Organisational Analysis is to satisfy the following areas,

  • Is there a structured organisation deployed?
  • Does it comprise of right people in terms of business acumen and experience?
  • What is the track record of the organisation and do they have similar experience?
  • Whether a change management approach is deployed that takes care of crucial human resource changes that may come up down the line?
  • What are the strengths and weaknesses of the organisation and have appropriate action been taken to take care of the weaknesses?
  • What kind of human resource the unit may be requiring for implementation and operation of the project? Whether such kind of people available, if not what will be the approach in solving this problem?
  • Whether the unit has a vision and whether the project is targeted to take the organisation towards achieving the vision?
  • Do they have a good organisational culture?

An appropriate representation of such aspects helps in building investor confidence.

Addressable Market Is The Starting Point For A Business Case

Any project is built to generate business and a business is built around its customers /markets. Those business concepts that do not have a market to address will not exist. Think of any business and you will find that the concept will either be built on an existing idea or will be on a revolutionary new idea.

This section of the reporting needs to focus on the market aspects of the product/ service in detail, even though some of the items may seem very basic in nature. Remember that your market understanding may be at a different level than that of other decision makers.

Market assessment should contain the following aspects without any prejudice

  • What is the nature of the product / service and how will it solve a problem?
  • Is it a completely new product / service or an improvement in the existing available product / services or identical copy of something that is available in the market?
  • If the concept is totally new, what is the nearest comparable product/ service?
  • What is the expected lifecycle and what stage of lifecycle is it positioned?
  • What market it is going to address? Is it restricted to a few small regions or entire domestic market or international market?
  • Who are the competitors in these markets and what are their strategies?
  • What is the price range and price stability for past period?
  • In case of new concept, is the price reasonable?
  • What will be the marketing and positioning plan?
  • What are the strengths, weaknesses, opportunities and strengths related to the market?
  • What are the mitigation measures against the weaknesses and threats?

Technical Analysis Forms An Important Purpose In A Business Case Report

Think of a situation when you plan to produce a product or set up a physical infrastructure like, a manufacturing plant and after the product or the facility is ready, it is observed that product is defective, or the facility does not contain certain essential infrastructure. Such an event could lead to time and cost overrun, which are not desirable.

Hence a detailed technical assessment is important to reflect upon the plan and areas of concern. This assessment may address the following areas,

  • Whether all the necessary aspects of related to the product or infrastructure is conceived?
  • If it is a physical infrastructure to be created, whether the location is convenient for setting up the project.
  • What is the extent of land required for present and future expansion? Is it adequate?
  • What is the configuration of the infrastructure and does it contain all the required aspects?
  • What are the specific features of the product or the facility? Is it state of the art? If not, is there any adequate clarification available?
  • Who are the technology suppliers and are they capable?
  • Whether the entire list of equipment created, and potential suppliers identified?
  • What are the strengths, weaknesses, opportunities and strengths of the technology? Whether appropriate mitigation measures against the weaknesses and threats are envisaged?
  • Whether the required environmental and statutory permissions for the product or service is envisaged?

Financial Analysis In Business Case

The final outcome of financial analysis should point out if the return is in commensurate with the investment. It should capture,

  • Details of capex requirement including cost of financing, working capital margin and contingency,
  • Top line and bottom line,
  • Operating and Net margin,
  • Return on investment,
  • Debt service coverage etc.


  • Business Case Reports are useful for different purposes. But the primary use is in making investment decision,
  • It is preferable to have a Business Case Report structured in such a way that it brings in a comprehensive view of the organisational capabilities, market for the product or service, technology and technical aspects, compliance requirements, investment and return,
  • Business case reports can for an important document for planning and monitoring of performance against plan.

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