What I learned from $300M+ in business cases
Including my 10 Commandments of successful business cases
I’ve authored $300M in business cases.
In fact, right now I’m working on one for the company where I’m a Senior Director of Strategy.
Most people treat a business case like a long-form business plan. But each has its own purpose. A business plan is an operational map; it’s how your team will execute against the model. A business case is a sales pitch; a request for funding for a project.
You might write a business case for internal fundraising of a project. Or, in applying for an SBA loan.
Whatever the use case, here are my ten commandments for effective business cases that get a “yes.”
My 10 Commandments of Business Cases
Differentiate the Document: Your business case should justify the “why” of a new venture or product build. It comes first. Once you are approved you’ll need a business plan, which is the “how.” Understanding this difference changes everything. Because each document has a different audience. Business cases are read by corporate executives, outside investors, and lenders. Business plans are read by the team that is going to use that money to execute the business model.
The “CEO Test”: I use two sections at the top of every business case. First, I add a TLDR section that includes high-level, bulleted key points. Next, I add the traditional Executive Summary. Your ES should be so compelling, so rich in key decision-making facts that an executive could stop reading there and know enough to render a decision.
Front-load the Money: Lots of businesses cases I see (and have to fix for people) leave financial projections until much later in the document. I used to do the same thing, but these days I’ve learned to move them further up. I don’t have a defined place, but, generally speaking, I would expect to see projections within the top third of the document.
Kill the Fluff: Our former CEO liked the way I wrote business cases. At one point either myself or my team had authored eleven of the businesses for our top twenty corporate priorities. He also disliked how much I wrote. So, I learned to move anything that most readers would already know to the appendix.
Address the Trade-offs: Every yes requires saying no to a different investment. You should openly address what those trade-ffs are and include, when possible, how to mitigate them.
Add a Pre-Mortem: I include a pre-mortem in my cases where I call out why the venture or new product would fail. Not only does this help address the risks, but it also gives you something to do a post-mortem against, where you can gauge what went right and what went wrong.
Own Your Assumptions: Financial projections aren’t the only piece of a case that is built on assumptions. Make sure to call out the assumptions you had to make and, most importantly, support those assumptions with data.
Story > Data: Some of you will disagree with this. Don’t misunderstand my point. Data is important. But storytelling is even more so when preparing a case. Data justifies the decision, but its storytelling that sells the vision.
Treat Execs Like VCs: Pitch your executive team just like you would a startup investor. In fact, when I’m pitching executives I visualize that I’m an unknown entity to them.
The “Conflict of Interest” Rule (The Controversial One): You shouldn’t be writing your own business case. It allows for too much bias. A great business case is also part feasibility study. Having an objective third-party research and write your case makes sure you aren’t injected opinions into the document. I once read a case where the author was the lead engineer for the product and he projected 90% market share capture with the new enhancements the funding would help him build. That’s why you want someone from outside writing it. You’re too close to the project to be objective.
One more note here. If you are looking to raise money from startup investors, you don’t need a business case, at first. You need a pitch deck. The goal of that document is to get you into the true due diligence phase, which I led for one of the largest angel syndicates in the Southern US.
If you have a project that needs a business case, there are two ways I can help.
One of my ventures, FounderDocs, prepares investor-grade business cases for companies of all sizes.
Also, if you need a template to get you started, try this one.