What is important in a business case?
So is a business case just about money or not?
“Business, that’s easily defined, it’s other people’s money.” Peter Drucker
Disneyland is a work of love. We didn’t go into Disneyland just with the idea of making money.” Walt Disney
There is something of a paradox at work here. If people are fulfilled in their jobs then they would say that they are not working just for the money; but equally a business will go under unless it can turn a profit.
Warren Buffett, Steve Jobs, Alan Sugar; these are men who have made a lot of money. They have known the importance of the need to be profitable but even after they made enough money to retire comfortably they worked on – why?
We will be getting on to the ‘why’ question very soon but it is obvious that these men (who all know the importance of a good business case) have a larger context, a greater vision and mission, that go beyond just cash-flow.
A business case has to look at the bottom line, the money, but in general it is primarily a formal way of expressing the vision, values and mission of an organisation. Developing a business case can seem like a daunting process at times, especially as there are so many different models and examples available, but the core of the business case is very simple, it is just answering some basic questions, questions that we will be covering in the course of ‘The Right Questions’.
At some point for a business plan you will have to prove the figures, examining the detail of profit and cash-flow, but for now we are just going to concentrate on the top level questions, the strategic framing of the business, seeing where the thing we are passionate about interfaces with an opportunity to create revenue. In this way we can help identify our vocation.
A business case is generally focussed on the need to make money; if a business proposition doesn’t demonstrate the ability to make money it has to be adapted or discarded. But the ability to make money is driven by the fact that something you do or make is attractive enough to make someone buy that service or product. Something you do will need to make you stand out, make you different from the competition, give you that competitive advantage or unique selling proposition (USP).
Working out what makes us different is not always obvious. Not many of us launch a completely new idea or industry. In fact it is a fallacy that you need a completely new concept to be an entrepreneur or successful business-person. It may not be a completely new idea or product but you certainly need to do something differently in order to stand out. For example you might offer better customer service or better value for money than the competition or pursue a particular under-exploited section of an existing market. If you are just starting up you need to make the offering attractive enough for people to buy your product or service rather than those of the competition; also in spite of the fact they might recognise that buying from a new business might be risky. But if you solve the customers’ problems sufficiently, they should need what you want to sell, and that is the best incentive for getting people to buy anything.
We find that it is primarily our character and abilities that make us stand out from other businesses. Therefore to identify what makes us different we can start by looking at ourselves and look at where out values, our skills and a need in a market all intersect. From this we can see what makes us unique.
After that we can look at the broader marketing narrative and answer the sort of questions we find more commonly in a business case. By going through this process we get a good overview of why the business exists, what it is going to do and indicate how it is going to make money.
Therefore as we continue to ask ‘The Right Questions’ you will find that you will naturally find the answers you need to build a business case.