The beginner’s guide to writing an effective business case

Nearly every project needs to be approved—whether that means getting the simple go-ahead from your team or gaining the support of an executive stakeholder. You may be familiar with using a project plan or project charter to propose a new initiative and get the green light for a project. But if your proposed project represents a significant business investment, you may need to build a business case.

If you’ve never written a business case, we’re here to help. With a few resources and a little planning, you can write a business case that will help you get the resources and support you need to manage a successful project.

What is a business case?

A business case is a document that explains the value or benefits your company will gain if you pursue a significant business investment or initiative. This initiative can be anything from the messaging for a new product or feature launch, a proposal to increase spend on a current initiative, or a significant investment with a new agency or contractor—to name a few. A compelling business case will outline the expected benefits of this significant investment decision. Key stakeholders will use the business case you provide to determine whether or not to move forward with an initiative.

If you’ve never created a business case, it may sound similar to other early project planning documentation. Here’s how it stacks up:

Business case vs. business plan

A business case is a proposal for a new strategy or large initiative. It should outline the business needs and benefits your company will receive from pursuing this opportunity.

A business plan, on the other hand, is an outline for a totally new business. Typically, you’d draft a business plan to map out your business strategy, your mission and vision statements, and how you’re planning on getting there. There may be a case where you create a business plan for an already-existing business, but you’d only do so if you’re trying to take your business in a significantly new direction.

[See more: Free business strategy plan template]

Business case vs. executive summary

An executive summary is an overview of an important document that covers all of the main facts and details project stakeholders need to be aware of in case they don’t have time to read the entire document. In fact, the last step of writing a business case will be to draft an executive summary with all of the important, high-level details your stakeholders need to know.

[Read: How to write an executive summary, with examples]

Business case vs. project charter

If you need to create an elevator pitch for your project but you don’t quite need the full business case treatment, you might need a project charter. Much like a business case, a project charter outlines key details of an initiative. Specifically, a project charter will cover three main elements of your project: project objectives, project scope, and key project stakeholders. Your management team will then use the project charter to approve further project development.

Do I need a business case?

Not every project needs a business case—or even a project charter. Plan to build a business case only for initiatives or investments that will require significant business resources. If you’re working on a smaller initiative, consider creating a project charter to pitch your project idea to relevant stakeholders.

Even if you don’t need to pitch your project to any stakeholders, you should be ready to answer basic questions about your proposed project, like:

  • What is this project’s purpose?
  • Why are we working on this project?
  • How does this project connect to organizational goals and objectives?
  • Which metrics will we use to measure the success of the project?
  • Who is working on this project?
  • When is this project going to be completed?

5 steps to creating and pitching a business case

Your business case shouldn’t just include key facts and figures—it should also tell a story of why pursuing a particular investment or initiative is a good idea for your business. When in doubt, avoid jargon and be brief—but always focus on communicating the value of the project. If this is your first time creating a business case, don’t worry. Follow these five steps to create a solid one.

1. Gather input

You don’t have to write a business case on your own. Instead, make sure appropriate team members and stakeholders are contributing to the relevant sections. For example, the IT team should be involved in any tooling and timeline decisions, while the finance team should review any budget and risk management sections. If you’re creating a business case to propose a new initiative, product line, or customer persona, make sure you also consult subject matter experts.

2. Plan to write your business case out of order

Some of the first things that appear in your business case—like your executive summary—should actually be drafted last, when you have all of the resources and information to make an informed suggestion. Your executive summary will present all of your findings and make a recommendation for the business based on a variety of factors. By gathering all of those details first—like project purpose, financial information, and project risk—you can ensure your executive summary has all of the relevant information.

3. Build your business case incrementally

A business case describes a significant investment for your company. Similarly, simply writing a business case is a significant investment of your time. Not every initiative is right for your business—so make sure you’re checking your work with stakeholders as you go. You don’t want to sink hours and weeks into this document only for it to be rejected by executive stakeholders right off the bat.

Consider doing a “soft launch” with an outline of your business case to your project sponsor or an executive stakeholder you have a good relationship with to confirm this initiative is something you should pursue. Then, as you build the different sections of your business case, check back in with your key stakeholders to confirm there are no deal-breakers.

4. Refine the document

As you create sections of your business case, you may need to go back and refine other sections. For example, once you’ve finished doing a cost-benefit analysis with your financial team, make sure you update any budget-related project risks.

Before presenting your business case, do a final read through with key stakeholders to look for any sections that can be further refined. At this stage, you’ll also want to write the executive summary that goes at the top of the document. Depending on the length of your business case, your executive summary should be one to two pages long.

5. Present the business case

The final step is to actually present your business case. Start with a quick elevator pitch that answers the what, why, and how of your proposal. Think of this presentation as your chance to explain the current business need, how your proposal addresses the need, and what the business benefits are. Make sure to address any risks or concerns you think your audience would have.

Don’t go through your business case page by page. Instead, share the document with stakeholders before the presentation so they have a chance to read through it ahead of time. Then, after your presentation, share the document again so stakeholders can dig into details.

Business case checklist

Start with the why

The first section of the business case is your chance to make a compelling argument about the new project. Make sure you draft an argument that appeals to your audience’s interests and needs. Despite being the first section in your business case, this should be the last section you write. In addition to including the traditional elements of an executive summary, make sure you answer:

  • What business problem is your project solving? This is your chance to explain why your project is important and why executive stakeholders should consider pursuing this opportunity.

  • What is your business objective? What happens at the end of a successful project? How will you measure success—and what does a successful project mean for your business?

  • How does this business case fit into your overall company business strategy plan? Make sure your proposed business case is connected to important company goals. The initiative proposed in your business case should move the needle towards your company's vision statement.

Outline the financials and return on investment

At this point in your business case, you should outline the project finance fundamentals. Don’t expect to create this section on your own—you should draft this in partnership with your company’s finance team. In particular, this section should answer:

  • How much will this project cost? Even if the initiative is completely new to your company, do some research to estimate the project costs.

  • What does each individual component of the project cost? In addition to estimating the total overall cost, break down the different project costs. For example, you might have project costs for new tools and resources, competitive intelligence resourcing, agency costs, etc.

  • What is the expected return on investment (ROI)? You’ve talked about the costs—now talk about how your company will benefit from this initiative. Make sure to explain how you calculated the ROI, too.

  • How will this project impact cash flow? Cash flow is the amount of money being transferred into and out of your business. Significant investments are going to cost a lot of money, so they’ll negatively impact cash flow—but you should also expect a high ROI, which will positively impact cash flow.

  • What is the sensitivity analysis? Sensitivity analysis is a summary of how uncertain your numbers are. There will be a variety of variables that impact your business case. Make sure to explain what those variables are, and how that could impact your projections.

Preview project details

Your business case is proposing a new initiative. In addition to the financial risks, take some time to preview project details. For example, your business case should include:

  • Your project objectives and key project deliverables. What will happen at the end of the project? What are you expecting to create or deliver once the project is over?

  • Your project plan. A project plan is a blueprint of the key elements your team needs to accomplish in order to successfully achieve your project goals.

  • The project scope. What are the boundaries of your project? What exact goals, deliverables, and deadlines will you be working towards?

  • A list of relevant project stakeholders. Who are the important project stakeholders and key decision makers for this work? This can include the members of the project team that would be working on this initiative, executive stakeholders who would sponsor the project, and any external stakeholders who might be involved.

  • A general project roadmap in a Gantt-chart like view. At this stage in the process, you don’t need to provide a detailed project timeline, but you should outline a general sense of when each project stage will happen in relation to the others. To do this, create a project roadmap in Gantt-chart like software. Make sure to include any important project milestones in your roadmap as well.

  • Any important project dependencies. Is there anything that would get in the way of this project getting started? Does this work rely on any other work that’s currently in flight?

Discuss project risks

Once you’ve outlined the financial impact and important project details, make sure you include any potential project risks. If you haven’t already, create a project risk management plan for your business case. Project risk management isn’t the process of eliminating risk—instead, it’s about identifying, analyzing, and proactively responding to any potential project risks. Clearly defining each project risk and how that risk might impact your project can best equip you and the project team to manage and avoid those risks.

In the risk section of your business case, include:

  • A risk analysis of any potential project risks. What is the risk? How likely is it to happen? What is the priority level of this risk?

  • What, if any, assumptions you are making. In project risk management, assumptions are anything you think will be true about the project, without those details being guaranteed facts. Basing project decisions around an assumption can open your project up to risk. Make sure you ratify every project assumption to avoid jeopardizing project success.

  • Any comparable alternatives in the market. If you’re writing a business case to pitch a new product or angle in the market, evaluate anything that already exists. Could the alternative impact your financial assessment or project success?

Turn it into an action plan

In the final section of your business case, outline how you will turn this business case into an actionable project. This section should answer questions like:

  • How will decisions be made? Who is responsible for the project? Who is the project sponsor? If you haven’t already, consider creating a RACI chart to outline project responsibilities.

  • How will progress be measured and reported? Not every project stakeholder needs to be notified of every project change. Outline key parts of your project communication plan, as well as how you’ll communicate project status updates.

  • What is the next course of action? If the management team ratifies this business case, what next steps will you take to put this into action?

Bring your business case to life

You’ve built a solid business case and it’s been ratified—congratulations! The next step is to bring your business case to life. It can be intimidating to initiate large-scale change, and implementing your business case is no exception.

If you haven’t already, make sure you have a project management tool in place to manage and organize your new initiative. With a central source of truth to track who’s doing what by when, share status updates, and keep project stakeholders in the loop, you can turn a great business case into a successful project.

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