Stages of business case development
As a manager, it’s important to think like the chief financial officer — or CFO — of your organization, especially when you’re making a business case. When examining a business case, a CFO’s fundamental priorities are to minimize costs and risks, generate revenue, and manage cash flow. So unless you keep these priorities in mind when building a business case, it’s likely to be rejected.
You can create a sound business case in four stages. Stage one is to define the business issue at the center of your case and to identify alternative approaches. Stage two is to analyze the alternatives and choose the best one. Stage three is to prepare the case. And stage four is to deliver the case — or sell your recommendations. Skipping any one of these stages can weaken — or even destroy — your case.
Define the business issue
Start by focusing on stage one of creating a business case — the other stages will be covered later in this course. At stage one, you should take a number of actions. To begin, you need to identify the business opportunity or problem to be solved by your proposal. Next, you should develop an opportunity statement.
Then, identify the business objectives of your proposal. Finally, generate a list of alternatives to exploit the opportunity or solve the problem. Your first action is to identify the business opportunity you want to seize or the problem to be solved by your proposal. For example, you might wish to expand into a new market or react to a drop in sales.
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