How to Build a Business Case for Your Project

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Have you ever wondered why some projects get off the ground and why others never seem to leave the runway? There are a number of reasons why, but if you want a better chance of getting your project in the air follow these steps on:

How to Build a Business Case for Your Project

All projects are done within the confines of a business need. Even non-profit organizations need to justify the reason why a project is being undertaken and how resources will be expended against the project. The following five steps will equip you with the information you need in order to create such a business case.

Step 1: Determine the Source and Motivation Behind the Project
The first question you need to answer when it comes to creating a business case for your project is who is behind this project? You need to have a clear understanding of why this project is being undertaken and who will be receiving value from the completion and implementation of the project.

For example, it may be a no-brainer that the source of the project comes from a salesperson who just sold a million dollar deal to one of your largest clients. The motivation is to get the project underway and complete so the company can be paid for their services. However, there may be projects that are less straight-forward. Perhaps the source and motivation behind a particular project is to further a particular executive's career by completing one of their "pet projects". It's important to know if this so you know what you may be up against as the project moves forward.

Step 2: Define How the Project Fits into Your Company's Strategic Objectives
Every company should have a handful of strategic initiatives that help move the company forward. Examples of these may be that the company is wanting to move into a new market, release a new product, or introduce new and ground-breaking technology. It's much easier to justify the existence of a project if you can attach this project to one of those strategic objectives.

What if your company doesn't have a set of strategic objectives they are looking to accomplish? You can use the default objective every company has and that is to stay in business. In order to stay in business every company must increase revenues and decrease (or at the very least, control) costs. You can show how this particular project will help accomplish either one of these goals in order to keep it in a much more favorable light.

By the way, management will appreciate the fact that you are looking at the projects you are managing through this strategic lens. It lets them know you are concerned about a much bigger picture and not solely focused on the details.

Step 3: Calculate the Return on Investment (ROI)
The ROI this project will generate is a critically important part of establishing a business case. On a personal level, you want to know if you put money into an investment that it will provide a certain percentage return. The goal is to not sink funds into something and lose money. The same principle applies (even more so) on a corporate level. Executives want to know that if they invest [x] in this project that they will receive [y] in return.

Defining ROI can take on a number of different forms. It may be dollars that are invested, manpower, or even opportunity costs that are incurred because of not working on some other project. Regardless of what it is that it will take to complete this project, it can always be tied back to money. Then, you can determine how the return on the project is calculated. Is it a particular metric, less hours spent, or higher profits? This too can be translated into financial numbers that make sense at the executive level to give the go ahead on the project.

Step 4: Show How Similar Projects Have Done in the Past
A real estate agent will pull comp sales of houses that are similar to yours in your area when they want to determine the value of your home. The reasoning is that if a particular house sold for a certain amount then this house should sell for something close to that amount. It's the same thing with a project that you are trying to get off the ground by putting a compelling business case together. Providing the details of similar projects such as how long they took, how much they cost, what impact they had on the bottom line, and other relevant details can instill confidence that this project will do the same.

What do you after following these four steps when it comes to putting a business case together? You have a clear definition of the project and motivation behind it, you know how it supports the companies strategic initiatives, a calculation of how much the company will make off such an investment, and a level of confidence that it can be accomplished.

Here's the icing on the cake that occurs after the business case has been accepted.

Step 5: Monitor and Report on Results
You can now monitor and report on results once the project is underway and ultimately complete. This is your opportunity to show how the assessments, estimates, and calculations that were in the business case came true. Why would you do this? To make your job in putting together a business case that much easier next time. If you gain the reputation of being able to derive business value time and again with the projects you manage then your projects will be the first ones that will be cleared for takeoff!

Have no fear the next time you are asked to put together a Business Case for a project. Apply common sense to your Business Case Document and you'll see how much easier it is to get your projects green-lighted.

There's no need to start from scratch when it comes to putting a Business Case together. Download a ready to use Business Case Template now.