Introduction
It is crucial that a business possesses a business plan as well as a business case in order to achieve in the changing business environment. The business plan and business case helps a company effectively and efficiently using the available limited resources (Harvard Press, 2013). Both the business plan and business case help a company to assess its standards of productivity and determine whether it is performing to achieve its objectives. They help an organization make the necessary changes to help increase productivity (Harvard Press, 2013). This paper discusses in detail the differences between a business plan and a business case. The paper uses the following criteria when differentiating between a business plan and a business case: definition, purpose, their foundation of development and measures used. It also researches the use of both in no- profit organizations or government institutions.
A business plan is a written record that describes in detail marketing, financial and operational path of a business to achieving its goals (Benson& Bugnitz, 2004). A business plan will focus on the business objectives for the organization. A business case; however, is a written document that justifies the decisions in an organization meant to convince the decision maker to approve some action. A business case focuses on the business objectives of an action taken by an organization (Schmidt, 2002).
The major difference between a business plan and a business case is the level of detail and the purpose. The purpose of a business case is to determine the business progress of a proposed project as part of the valuation and assortment process (Cohen& Graham, 2001). A business case also demonstrates how the project integrated with its project life cycle and whether the business venture will contribute to results (Cohen& Graham, 2001). The business case illustrates how a particular project will contribute to the company’s economic value (Schmidt, 2002). It shows in detail how the project will align with and support the strategy of the organization (Benson& Bugnitz, 2004). A business plan adds analysis and data collected during the planning stage. It also highlights factors considered in the business case that get incorporated into the plan (Cohen& Graham, 2001). It also features the actions, tasks and events that need to take place to make sure that the plan succeeds. Businesses utilize the business plan to manage the project outcome lifecycle (Cohen& Graham, 2001).
Although business plans and business cases are different in structure, they all possess key elements that all potential investors expect to find. A business plan’s key elements are an executive summary, product or service, management team and market and competition. Other elements include marketing and sales, business system and organization, implementation on schedule, opportunities and risks and financial planning and financing (Abrams et al., 2003). A business case’s key elements includes an executive summary, case assumptions and methods, project business results, sensitivity and risk analysis and conclusion and recommendations (Schmidt, 2013).
Another difference between a business plan and a business case emerges in predictions made using these two documents. Businesses will use a business case to make predictions about the cash flow results and important on- financial impacts that follow from an action (Read et al., 2010). Institutions; however, use business plans to predict business performance of the organization, especially the main categories of the income statement. It may involve projected pro- forms, income statements or balance sheets for the future (Read et al., 2010).
Another significant difference emerges in the measures taken by both a business plan and a business case. A business case does financial metrics such as Net Present Value (NPV), Internal Rate of Return (IRR), Rate of Return (ROR), Playback period and Total Cost Ownership (TCO). Business case metrics mainly focus on the projected cash flow and also important not- financial impacts (Melton, 2009). Unlike a business case, a business plan measures performance in terms such as sales, profits, profits and business health. It mainly focuses on the contributions these aspects make the balance sheet categories (Melton, 2009).
An additional difference arises when we discuss the purpose of both the business plan and the business case concerning nonprofit and government organizations. In the nonprofit or government organizations, the scope of the business case may include the benefits and the costs to the population served and also the organization itself. The business plan; however may focus on the funding needs, budgetary requirements and the ability to operate within budget (La Piana et al., 2012).
Another considerable difference between the business case and business plan comes from the foundation of their development. A business case of an organization lays its basis on the cost model and the benefits rationale created for the case and applied to one or more action scenarios (Cox& Radwan, 2015). A company will organize a business case around a single action or a single decision and its alternatives (Cox& Radwan, 2015). A business plan; though, entails the business model for the organization that shows where and how the company makes money and also the expected trends and competitor actions (Benson& Bugnitz, 2004). It revolves around an organization or the whole enterprise. The plan covers may cover a single action or many related actions or even the whole organization (Read et al., 2010).
Conclusion
There are several discrepancies between a business plan and a business case, but both are fundamental to the success of an organization. A company should incorporate a business case into a business plan to ensure the solid implementation of any project in the organization. I believe that any aspiring entrepreneur should have information on the differences between the business plan and the business case so as to apply the effectively in business’s operations.
Reference
Abrams, R& Abrams, R., (2003). The Successful Business Plan: Secrets & Strategies., California., The Planning Shop.
Benson, R& Bugnitz, T., (2004). From Business Strategy to IT Action: Right Decisions for a Better Bottom Line., California., John Wiley & Sons.
Cohen, D& Graham, R, (2001). The Project Manager’s MBA: How to Translate Project Decisions into Business Success, California, John Wiley& Sons.
Cox, J., Radwan, S., (2015). ASAE Handbook of Professional Practices in Association Management., California., John Wiley & Sons.
Harvard press., (2013). Developing a Business case., United States., Harvard Business School Press.
La Piana, D., Gowdy, H., Rose, L& Copen, B., (2012). The Nonprofit Business Plan: A Leader’s Guide to Creating a Successful Business Model., Tennessee., Turner Publishing Company.
Melton, T., (2009). Managing Project Delivery: Maintaining Control and Achieving Success., Burlington., Elsevier Limited.
Read, S., Sarasvathy, S., Dew, N., Wiltbank, R.,& Ohlsson, A., (2010). Effectual Entrepreneurship., U.S.A., Taylor & Francis Publishers.
Schmidt, M., (2002). The Business Case Guide., Boston., Solution Matrix Limited Publishers.
Schmidt, M., (2013). Business Case Essentials: A Guide to Structure and Content., Boston., Solution Matrix Limited.
Carolyn Morgan is the author of this paper. A senior editor at MeldaResearch.Com in write my nursing research paper services. If you need a similar paper you can place your order from essay already written services.
