Business Plan/Business Case

Introduction

Much has been said regarding what constitutes a business plan and a business case. This paper aims to explain and expound what a business is separately from what a business case is about. Here, I will discuss the uses of a business plan and that of the business plan. Finally, I will explain the similarities and differences between the business plan and a business case.

Business Plan

A business plan refers to a document that is prepared to describe in details how a business aims to achieve it short term and long term goals (Shelton, 2013). Apparently, whenever the term business plan is mentioned, what comes in the minds of many people is that it is contingency plan used by only new businesses or starting businesses that seek to apply for business loans. That is wrong because business plans are also recognized as vital for even running businesses that seek to plan for new ventures, new investments or just for the purpose of laying a blueprint for future development objectives. As a matter of fact, every business requires a plan to optimize its growth and development (Covello & Hazelgren, 2006). An important feature of a typical business plan is a layout and description of the company and what products and services it aims to produce. In other words, it explains what market niche the company’s existence aims to fill (Pinson, 2008). Another important feature of the plan is an all-inclusive budget that constitutes a breakdown of the estimated organization’s expenditure in the bid to yield its stated objectives, vision, and mission.  It will also give the current as well as projected financing, an analysis of the market analysis and its marketing strategies (Soriano, 2010).

Judging by the above definition and features of the business plan, it can clearly be seen that the basic idea of preparing or putting together a business plan is to make it possible for owners to picture clearly the potential costs a certain decision will have on the business (Ghatak, 2010). That in return enables these owners to modify their plan accordingly just before implementing these ideas. Sometimes, this document is presented to financiers as a justification or as a source of evidence that the funds will be placed to viable, effaceable, and plausible and profit sourcing functions (Ghatak, 2010). According to Shelton (2013), a business plan should contain what matches the owners plan purpose. It is thus not advisable to accept a standard outline just because it is available and seems appealing. 

Business Case

A business case can, on the other hand, be defined as an argument, usually documented in writing and intended to convince a person to approve some action. It is thus taken as a tool for justifying the initialization of a task or project (ISACA, 2010). Apparently, whenever an organization seeks to commit its finances or any other of its costly resources to a project, a business case is required to support this project. That it does by demonstrating a business need. In any case, a business case is used as a decision-making tool (Pinson, 2008). Organizations use it to determine what might be the effects of adopting a particular decision to the organization’s profitability. In particular, a business will show how adopting a certain route will alter the cash flows of the business and how costs and revenue will change over time (Soriano, 2010). Ultimately, the business case will make use of the internal rate of return (IRR), return on investment (ROI), and payback period as its measuring tools.

A typical business might be focused on analyzing the financial outcomes that will stem from choosing a certain vendor to sell a company's product (Gambles, 2009). Suppose a hotel’s manager finds out that the business fails to make good money to cover its operational costs during public holidays (Mullahy, 2010). Presenting such a fact to the hotel’s owner may be compelling enough to prepare a business case for closing the hotel during public holidays (Berry, 2009).

Nevertheless, more complex issues might call for the presentation of a carefully prepared case document (Shelton, 2013). However the structure of a business case, it should present the benefits and risks involved with the adopting or not taking an action in question (McKinney, 2003). Its conclusion should constitute a compelling argument for or against the implementation of the proposed action (Devlin, Emerson & Wrobel, 1997).

Uses of the business plan and the business case and how they relate to projects

As said earlier, a business plan is used universally to show the goals of the business and how it aims to achieve these goals (Abrams, 2003). It shows the company’s products, location, marketing strategies, budget, management plan, and financial information implementable to the achievement of the goals. A business plan also explains why a business is worthy financing by financiers (Ghatak, 2010). In other words, it shows how much the project will require and why to the financiers.

On the other hand, the business case is used by many organizations for the following functions. First it is used to demonstrate the company’s need for a certain action (s) (Mullahy, 2010). Secondly, it is used as a confirmatory tool of the feasibility of a project before funding can be expended. More importantly, it is used as a tool for assessing, comparing and contrasting costs and benefits of adopting a certain course action from another (Steinhardt, n.d). 

Comparing and contrasting a business case to a business plan

Similarities

As can be seen, both are tools that businesses use to justify their actions and the need for existence.   They both look into the future of the business, and each complements the other (Devlin, Emerson & Wrobel, 1997).

Differences

A business plan in brief is a document organized around the whole business to establish what is needed for a business to become as the owner desires. Specifically, a business plan will try to answer the question of what the business will look in future (Abrams, 2003). A business plan will serve as a guide to creating and growing the business. It will also address the major aspects, especially those aspects related to expenses and income over a period of the business existence. More importantly, it shows the probable investors the value and profitability of the business idea (Steinhardt, n.d).

In contrast, a business case aims at determining the necessity of a single action to the business. It serves to make the owner decipher what the consequences of a particular action might be to the business (Soriano, 2010). Among the questions that the business case will help answer include what might be the financial consequences of choosing as action X or Y? Next question that the business case will answer is what are the important non-financial outcomes care expected in either of the cases? (Schwetje & Vaseghi, 2007).

References

Abrams, R. M. (2003). The successful business plan: Secrets & Strategies. Palo Alto, Calif: The Planning Shop.

Berry T.(2009). What is a Business Plan? 

Covello, J. & Hazelgren, J. (2006). The complete book of business plans Simple steps to writing powerful business plans. Naperville, Ill: Sourcebooks.

Devlin E., Emerson C. & Wrobel L.(1997). Business Resumption Planning. Auerbach Publishers Inc

Gambles, I. (2009). Making the business case: Proposals that succeed for projects that work. Farnham, England: Ashgate.

Sherry Roberts is the author of this paper. A senior editor at MeldaResearch.Com in Online Writing Services if you need a similar paper you can place your order from free essay writing services.