Business plan vs business proposal

Compare And Contrast A Business Case And A Business Plan

BUSINESS PLAN VS. BUSINESS CASE 7

Business Plan Vs. Business Case

Driven by the immense power of the Web, business in the 21st century will be shaped by three major trends: rapidly increasing globalization, technology integration for seamless information access, and the rapid growth of cloud-computing and services (Rosenblatt, 2014). Such type of globalization and the advancement in the technology has prompted a growth in both public and private sectors. “The strongest players in this market are called Internet-dependent firms, because of their primary business depends on the Internet rather than a traditional business channel. At the other end of the scale are traditional businesses, sometimes called brick-and-mortar companies because they conduct business primarily from physical locations” (Rosenblatt, 2014). No matter how a business is conduct, either through the Internet or traditional system called brink-and-mortar, it is essential to have a business plan and business cases which supports a company’s overall mission, objectives, and needs. This paper defines what a business plan and a business case is, in addition to comparing and contrasting both. Moreover, it states the details of how a business case template is selected and explains the data available in the particular template.

It is extremely important for any business to have a business plan in place which can act as a road map and assist the company to head in the right direction. A business plan is a plan or objectives and goals the entire organization sets for the overall direction it wants to head in. A business plan is exactly what the word means, it’s a "plan for the business," where the business may be a profit making company, a government organization, or a non-profit organization. A company business plan includes specific tactics for reaching objectives set in the business strategy. “The business plan looks forward in time, projecting future financial performance and financial position, based on current trends, expected market dynamics, and known risks and opportunities” (Schmidt, 2015).

On the other hand, business case refers to the reasons, or justification, for a proposal (Rosenblatt, 2014). A strong business case means that a proposal will add substantial value to the organization and support the strategic plan. According to our text, a business case helps describe the project clearly, provide the justification to proceed, and estimate the project’s financial impact (Rosenblatt, 2014). These business cases are presented to a decision maker in order to convince them on taking an action on a particular proposal. On a simplest terms, business cases many times could be in a spoken conversation. However, deciding a more complex issue, a business plan is a well-constructed document which helps examine benefits and risks of making a decision, or in some case not making a decision. “A well-crafted business case explores all feasible approaches to a given problem and enables business owners to select the option that best serves the organization” (Rouse, 2012).

As aforementioned, it is extremely important for a business to have a proper business plan, in addition to being able to possess skills to construct and execute a business case. According to Steinhardt (2015), in a business plan the assessments are done at a company level that culminates in a decision on whether the company should compete with the other companies in a particular industry; on the other hand, a business case is an assessment done at a product or an item level that culminates in a decision by describing the project clearly. “This helps the company to justify, for example, whether they should attempt to solve a market problem by producing a product which will compete with other products in the market; hence, estimating project’s financial impact” (Steinhardt, 2015). Both of these components serve the same purpose, but just at a different level, which is to help the business reach its goals.

Even though both a business plan and a business case are two different ventures, confusion arises about the difference between the two and the ways they complement each other. A business plan normally looks forward in time for a period of one, three or sometimes even longer. At times it is developed before the startup of the business in order to help us describe the company’s business model and project the future financial situation and performance of the company and its investors. While a business case is usually a document intended to convince a decision maker to approve some kind of action regarding the benefits and risks associated with it. It helps us determine what the financial consequences and the outcomes are going to be based on what case is chosen.

The table below summarizes and contrasts key differences between business plan and business case (Schmidt, 2015):

Business Plan

Business Case

Is organized around

The entire business or the organization. Plan maybe for a single product or the entire organization.

A single action or a single decision on any issue regarding the business.

Predicts

Financial and non-financial performance and outcome in terms of the entire business.

Financial and non-financial outcome from that single action or decision.

Focuses on

Objectives of the entire organization.

Only on that single action and decision and nothing else.

Measures

Performance in terms of sales, margins, profits, etc. to important balance sheet categories.

Financial metrics such as IRR, ROI, NPV, etc. based on project cash flow. Also non-financial impacts.

Table 1 Difference between business plan and business case.

Creating a business plan is very important because that plan serves at a road map for the business. A business case examines the proposed project as part of the evaluation and selection process. It is usually presented in the form of a business case template. A business case template represents the details of data being presented for the funding and approval of the project being started. Creating a business case template is the last of several stages that must be completed before you present it. All the sources of data that is required to support the business case should be identified.

Types of Business Case Templates

Before writing these business case, one should do extensive research into the problem and the possible solutions. There are many business case templates available online. After finding the template which helps best determine the problem as well as the possible solutions, one can prepare the business case. Below are some of the examples of different types of business case templates:

· Option A - http://www.projectmanagementdocs.com/project-initiation-templates/business-case.html

· Option B - http://www.technology.wv.gov/SiteCollectionDocuments/Project%20Management%20Templates/Business%20Case%20Template.doc

· Option C - http://www.hhs.gov/ocio/eplc/EPLC%20Archive%20Documents/02%20-%20Business%20Case/eplc_business_case_template.doc

Amongst the three business case templates presented above, Option A is my preference. Option A is clearly and precisely written and it looks well defined than the other two templates. The sections available in this template are easy to follow and it summarizes the approach for how the project will address the business problem in a clear manner. This particular template is consist of key resources, processes, services, and their anticipated business outcome in measuring the performance of the project. Moreover, this business case template has the section of Major Project Milestones, which lists the major project milestones and their target completion. Upon noticing, Option B and Option C are similar in terms of the setup. In addition, upon further review, Option B and Option C are much less detailed compared to Option A. Therefore, when presented the business case to the reviewer it has to be in the most detailed way.

In conclusion, even though a business plan and a business case are totally different, it is sometimes mistaken as similar. A business plan is organized around the business, organization or a part of the business. A business case is organized to address questions about a single action or decision. A business case is usually presented in the form of a business case template, which is a formal, written argument intended to convince a decision maker to approve some kind of action. These components are extremely essential for the success of a business.

References

Piscopo, M. (2015). Business Case Template. Retrieved from http://www.projectmanagementdocs.com/project-initiation-templates/business-case.html

Rosenblatt, H. J. (2014). Systems analysis and design (10th ed.). Boston.

Rouse, M. (2012, January). What is business case? Retrieved from http://whatis.techtarget.com/definition/business-case

Schmidt, M. (2015). Business Plan Explained. Retrieved from https://www.business-case-analysis.com/business-plan.html

Steinhardt, G. (2015). The Difference between a Business Case and a Business Plan. Retrieved from http://www.blackblot.com/kb/blog/difference-between-business-case-and-business-plan/