Every day, dozens of people download a business case template from my website. It has been used by universities, Fortune 100 companies and the leading management consultancies. Some people follow up with questions.
Truth be told, a template alone is not a guarantee for a great proposal or business case. I have compiled a list of thirty tips that should be useful for managers, business development and sales people, and anyone else potentially facing the need to develop one.
1. Your case should have an objective: a real problem you are looking to resolve or an opportunity you are looking to take advantage of. Be clear on the raison d’être for your case. Rolling out a CRM system is not an objective but one of the alternatives; improving client affinity and increasing sales per client may be a legitimate objective.
2. Your perception of something being a problem or an opportunity may be entirely different from that of the decision makers. If you believe you are right and they just aren’t aware, do an exceptional work in explaining it so that they understand. Often, we see people spending months working on a case for a problem that they believe exists just to hear from a decision maker: “Look, this is really a non-issue.” Before embarking on a proposal, check upstairs if the issue is seen as warranting attention.
3. The size of a business case is not something you should be concerned about. Concentrate on the content instead, tell the story. The case should adequately present your proposal and, at times, two pages will be too many and, at times, two hundred pages will be too few.
4. Always present more than one alternative within your business case. What is the right number? Three or four should do it.
5. Do not introduce weak “straw man” alternatives which try to steer the decision makers towards the solution you favour. It is usually obvious.
6. I cannot stress this enough: do your absolute best in creating strong, viable alternatives, well thought through and diverse. If you don’t, a decision maker may introduce one during the presentation, which will be embarrassing and require time to evaluate. If that doesn’t happen, the decision will be limited to a potentially incomplete, deficient set, of which Shakespeare said “There’s small choice in rotten apples.”
7. Always recommend one of the alternatives. Firstly, because you are the author of the case, you will be expected to know more about it than anybody else and, hence, know which option is the best. Secondly, even if the decision makers disagree with your recommendation, you will at least have shown them that you have an opinion, which commands respect.
8. Every proposal has its audience. Choose the language so that they don’t have to work too hard to understand what you are saying. If the audience is external to your department, division or company, increasingly more detail will be required. The jargon, the acronyms, the oh-so-obvious to you process flows may need to be explained in fine detail. Conversely, if the case is for internal consumption only, there is no point in explaining obvious everyday things.
9. Different people think differently: some are big picture strategists, others are detail oriented. Some are risk-averse and others like the challenge of the unknown. People make decisions using their internal frames of reference, which are formed through juxtaposition of cultural norms, values, education, life experiences, memes, current events, and so on. An author of a business case will be best served to understand how the target decision makers tend to make decision, so that she could structure her message accordingly.
10. Expose key decision makers to findings as you go about developing the case to gauge their reaction and adjust the course if needed. If your proposal or business case has a sponsor, such as a senior executive, avoid surprising them at all cost.
11. Make your audience “own” important or contentious data. For example, obtain sales projections or cost assumptions from the head of the business unit, CFO or COO. If they or their subordinates are among the decision makers, not only will these numbers be challenged, the people who provided them will likely feel compelled to support your case.
12. Know your numbers cold.
13. Take the time to determine where the opposition is likely to come from and prepare to address most likely concerns. There is really no excuse for being unprepared.
14. If you are writing a proposal in response to a client’s request, remember that most clients know what they want, but few know what they need (for this reason, RFPs are a wrong vehicle for acquiring consulting services).Time invested to understand the real needs will pay off handsomely as in many cases you will be able to expand the scope significantly. Even if you cannot do that, for example, due to time constraints, always offer the client a choice of an alternative that delivers incredible value at a price above the stated budget.
15. Use the business case format with which is already adopted in the organization. If there isn’t one, you can download free business case template from my web site.
16. Be concise, clear, logical and persuasive in style.
17. When unsure how much of the numerical data (eg projections, pro forma earnings, etc) to present in a live meeting, start with summaries but always have detailed information in your back pocket. Likewise, in a written case, it is a good idea not to burden the write-up with extensive tables or derivations but to attach them as appendices.
18. Always identify your sources of data.
19. Ensure that your data sources are reliable. Despite the proven accuracy of Wikipedia, it is best not to use it as a source if information because its validity can be easily questioned.
20. Never cast blame or accuse anyone (e.g. past management, departed project teams, third parties, etc) for the current condition. It is irrelevant and can lead to unintended consequences, like in “You know, the former project lead you have just lambasted is the CFO’s wife…”
21. If your proposal or business case includes financial cost-benefit analysis, as most of them should, use the method which your organization is familiar with.
22. If you have a choice of a method of financial cost-benefit analysis, make sure you understand pros, cons and limitations of each of them. Not every method is appropriate for every situation. As a primer, this two-part article should be useful.
23. If you are not familiar with financial cost-benefit analysis methodologies, engage external help. Contrary to a common belief, this is not a job for an accountant. The cost of doing this is negligible compared to that of possible ramifications of it not being done right.
24. Two key principles to keep in mind for your cost-benefit analysis: realism and attribution (only consider effects directly attributable to the proposed course of action).
25. Cost-benefit analysis should not be limited to financial considerations. Consider the wide variety of benefits (or costs, which are reverse): industry leadership, strategic advancement, increased capacity, improved safety, reduced environmental impact, introduction of best industry practices, improved image, benefits to a friendly third party, doing the right thing, and so on.
26. Beware of the cost-cutting mindset, which stifles innovation and breeds self-censorship. Costs and benefits should be considered in a holistic, balanced manner, so that penny pinching does not eclipse blazing non-financial wins your proposal may offer. For this reason, I advise organizations against establishing arbitrary hurdle rates (e.g. “To be considered, you proposal need to show IRR of 20 per cent”).
27. No business case or proposal is complete without a risk assessment for each of the alternatives presented. Consider both likelihood and impact of each risk and be realistic in your assessment.
28. The key to adequate risk assessment is a stakeholder analysis done well.
29. Be prepared to discuss the business case in three different settings: a 30-second status update, a 5-minute brief with questions and answers, and a 30-minute presentation. I also advise managers, project managers and team leads to be ready for these three types of communication at all times. Caveat: there is usually a fair warning for the presentation, so that you have the time to think it through and prepare.
30. When you present your proposal, questions will be about implementation are likely. The popular topics are resources and timing. Often, you will already have explored these items, which will enable you to provide an informed answer. If you haven’t, think before the session how you would respond. Answers that don’t go well: “We don’t know yet”, “We will decide later”, or “We haven’t thought of that. ”