A business case and a business plan are two vital documents for every business organization. The two documents are used by organizations from their times of inception to the time of dissolution. For the documents to be effective, organizations must review and update them based on the changes in market environment. This discussion looks and the similarities and differences between a business case and a business plan. Besides, the discussion highlights the areas of application of the two documents and discusses three different templates of a business case.

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Business Case and Business Plan


Schmidt (2014) defines a business plan as a written statement that describes the objectives, strategies, financial forecast and the target market of a given business. The document clearly outlines the services as well as products offered by the business and how it is structured, hence serving as the blueprint to the future of a given business venture. When drafting a business plan, one should see into it that it is practically achievable. Moreover, adequate time should be taken to regularly review the document. In this context, the term business is used to refer to either a profit making company, or a nonprofit organization. It could also denote a government organization. Conversely, a business case is a document that presents support for for an action that needs the approval of the person making a decision. The document gives details of various requirements that need to be put in place to drive a project from its conceptualization stage to the initiation stage. The basic rule for drafting a business case is that it has to show a clear path that confirms the presence of a satisfactory return on investment (Bernus et al, 2006).  In simple situations, a business case could be presented in form of a spoken suggestion, while in complex issues it is presented in a carefully constructed document. Besides the definitions, this discussion looks at the application of a business plan and a business case. It also gives a comparison of the two documents and discusses three sampled templates of a business case.

Business plans are focused ahead in duration of one to three years to a business planning horizon (Bernus et al, 2006).   The planning horizon is periodically moved forward through regular reviews and updates. Organizations’ business plans vary in structure and content but the document is intended at addressing two basic questions. It asks about how the business venture will look like after a given time frame, in terms of performance and financial position and how the organization can achieve the desired performance and financial position. Organizations usually develop their first business plans before they start operations. The first business plan serves an organization as a tool for capital generation. The founder or business owner can use the document to request for investments from potential investors or to request for loans that would be used as the initial capital. When a business has picked up, it reviews and revises the document regularly hence making it a living document for the business.

A good business plan serves several functions that are essential for the success of a business. First, the document gives a projection of the future financial situation of a business venture. This information is essential at the start of the business. The financial position of a business venture is a matter of interest to the business owner, investors and the potential investors. The information determines the viability of a business; hence, it dictates the likelihood of attracting investors to the business.

The second application of a business plan is in the identification and measurement of possible risks that are likely to pose a challenge to the financial strength of the business (McKeever, 2012). The risks are arrived at after giving a projection of the performance of the business after some duration. The business plan gives a description of the measures that would be taken to deal with the risks. The document also describes a company’s business model. The business model shows the situations and manner in which the company’s money would be spent, how the company will generate revenue and make margins (McKeever, 2012).

Organizations also use the business plan to identify the main assumptions and various trends in the anticipated financial performance of the business. For example, the document shows the anticipated trends in customer demands. Due to the dynamic nature of customer demands and market competitions, a business plan is subjected to reviews that are aimed at adapting to the changes in the market trend. The management of business organizations use business plans in setting and prioritizing their business objectives. By using the business plan, organizations can set their key performance indicators. The document also helps in identifying main success factors that an organization must strive to meet in order to achieve its objectives (McKeever, 2012).

Another application of a business plan is in the development of business budgets. Budgeting is done by keenly considering the points of expenditure and the sources of revenue for the business venture. The document also helps in the evaluation of the business case. In this case, the document determines the decisions made in support of capital acquisition and investments.

A business case also serves various functions. First, the document is essential in driving the business success. For example, it is used to ensure that business investments, purchases and any projects are focused towards achieving the business objectives. The document helps managers in ensuring proper allocation of scarce resources for a maximum effect that would help an organization attain satisfactory economic returns. Due to the scarcity of resources, the document should give a guideline of expenditures that makes projects compete for funding (Putten, 2013).

Secondly, a business case is essential in making better and careful decisions. The document is drafted to show the structure, procedure and discipline required in the process of decision making. To ensure that an organization achieves it objectives, the business case helps the management to ensure that its decisions are in line with the business strategies and goals. The document also helps organizations to manage their exposure to risks (Putten, 2013).

Putten (2013) states that by using the business case, organizations can effectively manage their interactions with suppliers. It avoids cases of unnecessary influences that may be inconsistent with the business values, and facilitates fairness in the buying process. The document also shows external and internal regulations and directives. Organizations use it to ensure that their operations are consistent with the internal and external regulations.

The document may be built to establish consensus among the key business stakeholders. The process of developing the document may be used by an organization as a means of ensuring that the main business stakeholders are consulted. The document also helps in maximizing project success in various ways. For example, it is used for proper planning of business projects. It provides a framework for measuring the performance of business projects and enhances accountability of managers and suppliers.

Based on the functions of a business case, it is seen by sophisticated buying groups as an essential framework that guides decision making and planning. It is a living entity that keeps on growing with the continuous development of business enterprises. The document is regularly updated in accordance to the changes in the business environment.

There are various areas of similarities and difference between a business plan and a business case. First, the focus of a business case is to address an action or a decision aimed at handling business case questions. The questions addressed by a business plan contrast those that are addressed by a business case. They include what the business will look like after a duration, how the business can achieve the desired results and the sales, margins and revenues that the organization can expect after one year of operations (Pinson, 2008). The document also asks about the duration that an organization may take to start making profits. On the other hand, a business case asks about the financial consequences of taking an action instead of another, the vital non financial outcomes of taking any action, and the necessary capital budget for each financial year.

Secondly, while the business plan is organized to focus on the business or part of the business, the focus of a business case is to ask questions about a single action or decision taken by an organization. For example, a business plan may address all issues relating to the production of an intended product by a new business venture. The business case may only focus on the choice of the source of raw materials by analyzing the available alternatives (Pinson, 2008).

Third, the business plan is concerned with what the business will look like while the business case seeks answer to the consequences of the actions taken by a business venture (Lee, 2011).  A business case helps to predict the cash flow results and vital non financial implications of taking a given action. On the contrary, a business plan predicts the overall performance of a business venture.

Forth, a business case is established based on the cost model and the benefits rationale that is developed for a given case. On the other hand, a business plan is based on the organization’s business model and the expected trends (Lee, 2011).  

Fifth, a business case is established to measure the financial metrics of a business according to the cash flow. It also looks at vital non financial impacts of business actions. On the contrary, a business plan measures the performance of a business by looking at the margins, sales, and the overall business health.

Lee (2011) stated that either of the documents can be used by an organization to support the other document. For example, a business case can support a business plan by helping to understand how the actions and various marketing programs can impact on the performance of a business. Similarly, a business plan can support a business case since the developers of a business case can get estimations of costs, revenues and expenses by using a business plan.

The documents have some similarities. First, both of them have top lines. The top line for a business plan is the expected revenue while that for a business case is the benefit that a business can derive from a project. Secondly, the two documents should be measured based on the cash flow (Harvard Business Review Press, 2011).

Samples of Business Case Templates

http://www.projectmanagementdocs.com/project-initiation-templates/business-case.html. The template presents detailed information about a business venture. It shows essential issues that financiers seek to know before making decisions to fund a business venture. For example, the document clearly defines the problem that the business seeks to address and how it will solve the problem. It shows potential financiers the anticipated outcomes of the business venture, gives a justification for the choice of the business venture and recommendations to ensure that the business manages various challenges. The template goes ahead to give information on the analysis team and the project overview. It highlights the strategic alignment, the cost benefit analysis and the alternative analysis. At the end, the template presents an opportunity for approval by the executive board (Piscopo, 2013).

http://www.business-case-analysis.com/business-case.html. In this template, some elements are omitted. The elements are key in determining the future of a business; hence, their omission can limit the chances that the organization can get funding from an investor or a financial body in terms of a loan. For example, the template excludes the problem statement, justification and recommendations.

http://www.tbs-sct.gc.ca/emf-cag/business-rentabilisation/bcg-gar/bct-mar-eng.asp. The template that is prepared by the Treasury Board of Canada (2009), presents detailed information about a business venture. One challenge with the template is that it is not clear. The information is not presented in a simple way that can facilitate ease of interpretation. Investors and other financiers may not have time to go through a long document that is not presented in a simple manner.


Based on this discussion, it clearly emerges that a business plan and a business case are two important documents that all business organizations need to have. The two documents have various similarities and differences. The differences are evident in their areas of focus and functions. However, the documents can be used to complement each other for the success of a business venture.


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