Writing a Business Case

Alan BelniakBPMA, business1 Comment

business plan financial modelI recently attended a BPMA mentoring session.  I’ve written in the past about BPMA mentoring events, so skim those to get up to speed.

Business Plans and Business Cases

Our topic today was business plans.  In our break-out groups, we were to discuss the best way to develop business plans.  What are the various approaches that can be used by product managers and product marketing managers at various levels? In advance of the session, Deepthi Bathina, who heads up the executive mentorship program for the BPMA, prepared a comprehensive list of steps one can consider when writing a business plan.  This list has the elements you’d want to consider working into your document or presentation. You can find Deepthi’s business plan template here.

Below are the notes I took from the five-person discussion at our table.  Our experience was more focused on creating internal business cases, rather than business plans.  Many of the points below can be applied to either, but it’s important to get the context.


  • Understand if senior management really has an appetite for risk and new product development.  A business case could be so well-prepared that almost anyone would signal to move forward, but if it’s presented to a group who ultimately is conservative (or biased), then this entire exercise could be a poor spend of time.
  • Company size matters.  This process is likely more rigorous and coated with red tape (in good ways and bad) at larger companies.  There may even be templates that are required.  Also, if the business case is for a product line extension, that could be different than, say, for a new market, new product entirely, or new customer segment.
  • When gathering information, leverage your internal resources.  Call a friend in finance to get the cost of capital, call a cycling buddy in development to get a sense of how long it takes to develop x.  The more you can get from internal sources (versus guesstimating), the better.
  • In addition, build allies.  Not just information sources, but trusted people, ideally some of whom will be in the room when you present, or one of the people reading the final document.  Get some buy-in and backing, so when the case is presented, at least a few people will nod their heads or ask good questions to draw our more information.

Doing the Work

  • The amount of market sensing and market research cannot be underestimated.  This might be where one spends the most time.  Any idea can be great, but if the market isn’t there to support it (or, if you grossly overestimate it), you could be in for some trouble.
  • One should apply frameworks to a business, such as a SWOT, Porter’s Five Forces, 5 Cs, PEST, etc.  But don’t show that in a document or report.  Don’t have a slide that shows a graphic that explicitly depicts this.  Instead, run through the appropriate framework, and summarize the results or meaning on a slide or page.
  • The power of customer interviews should not be underestimated.  This data can do wonders to help shape a product vision and direction.  Even new products have customers, though they might not be in front of your face.  For those, one needs to think dynamically and broadly on how to find or reach them.
  • Make sure multiple stakeholders’ opinions are sought.  This is to prevent any ‘gotcha’ moments during the presentation, as well as bolster your case. For example, if a new product has an opportunity to affect (positively) the sales of another product and increase the recurring services revenue, those are both good things to know and accentuate in a presentation or document.
  • Another thing to keep in mind when people start to make decisions: who are your stakeholders’ stakeholders?  Sometimes decisions aren’t made for seemingly obvious reasons.

Financial Projections

  • When showing projections, use a financial model.  On a separate slide or in the appendix, show your inputs and assumptions.  Make sound assumptions in absence of readily-available data.  Cite where you obtained the assumptions to validate that they are sound.  When presenting values, show realistic values, and then be prepared to show a lo and hi version as well, should some of the inputs change.  Know which direction the model will go when each input is altered in a particular direction (a sensitivity analysis).
  • When presenting the financial model, test it first with some colleagues – your allies, some people in your network, or even BPMA colleagues.  Listen to the questions and objections, and work those into your presentation of the financial model to take the wind out of anyone’s sails address any concerns upfront before they become questions.  Also, understand the appetite is for a deep financial discussion, versus a high-level one.  If NPVs and hurdle rates and such are thrown around to a room of people that don’t know or understand those terms, that will likely be met with silence, or a bit of annoyance.

Time Management and Presentation

  • How much time spent preparing these business cases varies.  Some suggested ways to estimate that:
    • What’s the deadline (if given)?  Is it 3 days?  Or 5 weeks?  The more time to prepare, the meatier the content should be.
    • How long do you have to pitch? 15 minutes?  Or 90 minutes?  If you’ve got the CFO’s ear for more than 15 minutes, she probably wants to see more than simple slideware.
    • How many people in the room and at what levels?  Stakeholder quantification and identification is key.
  • If the time allotment is, say 30 minutes, plan for mostly presenting, and some Q+A (in this case, maybe 20/10).  Also, prepare to be told at the last minute that the time allotment is 15 minutes.  Assuming this last-minute change, what would be omitted and what would be covered?  Knowing those bare essentials, and knowing the ‘nice to have’ information, especially in slide form, is very helpful.  Meetings and people run late.  Priorities shift. Be nimble if the situation calls for it.
  • If the presentation or conversation isn’t going as planned, or if there’s generally some hesitation, candidly and politely ask the room “What more would you like to see?  What’s missing here that I/we can add to help make the decision or discussion easier?”  Then, go and do that.
  • Understand that there are external forces, such as market adoption, the economy, consumer outlook, global politics, etc.  These are issues that needn’t be covered explicitly in a business case, but should be considered and presented in the right context.
  • Understand that some decisions are made with cognitive bias and confirmatory bias.  Know this and mitigate against it.  Attempt to separate logic from emotion, in both the presentation itself and your own attachment to it.  Sure, show passion for the work you did, but not the outcome of the reception to your recommendations or conclusions.
  • Have a goal in mind.  Sounds silly, but don’t walk into the room with the purpose to just educate.  Are you looking for money?  If so, how much?  By when?  Are you looking for resouces (people)?  New?  Re-organized?  Local?  Off-shore?  Have the ask in mind, and state it clearly in the presentation.

Other great points were raised in the room, too.  This list only reflects the thoughts from our table.  If any of the other BPMA mentor/mentee attendees from this session are reading, drop a note in the comments with your thoughts.

image source: http://www.flickr.com/photos/ivanwalsh/3944386854/

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