Blank checks are rare in most companies. You typically need to first validate how your ideas will impact the business before you get resources assigned and receive financial support. And if you are a product manager, then you know how challenging it is to get leadership buy-in for a big new investment. But to build what customers really need, you must be able to show the executive team that your vision is sound.
This is where a business case comes in — it is an argument for why your organization should take action, based on research and insight.
A business case provides a rationale for anything meaningful or novel. This could be a future product, expansion to a new market, change in go-to-market strategy, or even an acquisition. The business case explains the strategy behind whatever that new undertaking is and the value it will provide. Your goal is to organize all the essential information about the market and the company, so stakeholders can make an informed decision.
Okay, let’s pause for a minute. Because you might be thinking, “It is not that often that I get to pursue a really big idea.” And you are right. The complexity of what you include in your business case will vary depending on the maturity of your organization and the scope of what you are proposing. You want to show your understanding of why the product is needed, who will benefit, and what it will take to bring the product to market successfully. And you should always consider what the reaction might be and address potential risks.
For example, a number of years ago when I was working at a large technology company, our team wanted to pursue a tuck-in acquisition to accelerate our entrance into a new market. We created a presentation that explained why, the target companies, our proposed process and integration plan, and what we thought the value to the business would be over a period of years.
Even though that may sound formal, there is no need to write a treatise or dissertation. Highlighting the critical points is typically all that is required. And the depth of the analysis really depends on how significant your proposal is. Here is some general guidance on how to create a compelling business case:
Define the opportunity
What is the problem you will solve? Specify what you are going after and the strategy for doing so. Conduct market research beforehand so you understand every aspect of the opportunity and can communicate clearly when folks inevitably have questions about what you are proposing.
Assess what makes you (or a target in M&A) unique
Describe how the company is particularly well-equipped to tackle that problem. You should analyze the competitive landscape and examine what sets your organization apart — such as access to capital, ability to scale, proprietary technology, or specialized knowledge and skills your team has.
Describe your approach
Pay special attention to how you will solve the problem in a new way. Think about the benefits the new product will provide or the value that expanding into a new market will bring. It is important to tailor your language to your audience and tie your plans to the broader company strategy. This shows that you understand the overall goals and your ideas support that growth.
Estimate the cost
Numbers matter. Ballpark how much money, time, and other resources the company will need to spend to achieve what you have planned. You can draw on actuals from past product investments to ground your figures.
Project the return
Now it is time to show the value of what you will get back in dollars. Calculate the anticipated revenue — giving an actual number for the ROI is the ultimate way to strengthen your business case.
Analyze the risks
Now you need to think about what could go wrong. For example, are there market trends that could interfere with your plans? What about competitor activities that could change your forecast for the worse? Including potential drawbacks does not make your business case weaker — it makes it more comprehensive and robust.
Share open questions
Any big change requires contemplation and collaboration. So take the time to discuss lingering questions and address loose ends with the team. Both positive and negative feedback is valuable because it allows you to iterate on your ideas and improve.
A compelling business case is just one step towards delivering real value to your customers.
This is one reason that we created a comprehensive business model builder in Aha! — you can use it to capture business objectives, market opportunity, and pricing. You can also customize the components to convey the exact information you want to present in your business case.
That last concept is important. You are advocating for something new, so you need to take the time to research what makes the opportunity unique and think critically about its viability. You may not get a blank check — but I bet you will be closer to getting an emphatic “yes.”
When was the last time you created a business case?
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