Abstract
A business plan is a document used for planning out specific details about a business. A comprehensive business plan has three sections- business concept, financial and marketplace. The fundamental purpose of a business plan is to define what the business is or what the company intends to be over time. A business case captures the reasoning for starting a task or a project.. A compelling business case sufficiently captures both the quantifiable and unquantifiable characteristics of a proposed project. A business case and business plan are elementary documents in business or a company. The two business documents differ in terms of the procedure of developing them and the intent of developing.
Introduction
Business Plan
A business plan is a document used for planning out specific details about a business. A business plan can range in size from a simple few sentences to more than 100 pages with formal sections, a title page and a table of contents. A typical business plan has an average of 15-20 pages. A comprehensive business plan has three parts- business concept, financial and marketplace. The three sections are broken down into seven components. These components include the overview of the plan, a description of the new business, design and development, market strategies, competition analysis, operations and management, and financial information. The main purpose of a business plan is to define what the business is or what the company intends to be over time. Clarifying the purpose and direction of someone business allows the person to understand what needs to be done for the business forward movement. Clarifying consists of a mere description of the business and its services or products (Wassinger et al. 2011)
Business Case
A business case captures the reasoning for starting a task or a project. It is usually presented in a well-structured written document, sometimes a business case comes in the form of a short verbal presentation or argument. The purpose of a business case is that, whenever resources such as effort or money are consumed, they should be in advocate of a particular business need. A compelling business case sufficiently captures both the quantifiable and unquantifiable characteristics of a proposed project. A business case depends on the business volume and business attitude (Belkin et al. 2000) Business cases can range from complete and highly structured, as required by formal project management methodologies, to informal and brief. Information found in a formal business case could be the background of the project, the expected business profits, and the options considered also the expected costs of the business, a gap analysis and expected risks of the project. A business case is of great importance because it helps decision-makers ensure the proposed initiative will have relative and value priority compared to alternative actions based on the goals and expected profits laid out in the business case. Also, a business case helps the decision makers ensure the performance found in the business case are identified to be used for the proactive realization of the business and behavioral change (Larriveee, 2012).
Comparison and contrast: Business Plan and Business case
A business case is organized around a decision or an action, to address business case questions, the questions in a business case contrast with the focus for the business plan. A business plan address questions such as what will the business look like in a year or three years? How does the business project get to those results? What sales, revenues, and margins can we expect the coming year? How many years will it take this business project to become profitable? Sometimes confusion arises about the differences between the business plan and business case and the ways they complement each other. In brief, a business plan is organized around the business association. The business case is held to address questions about the single decision or action. Whereas a business plan asks what the business project will look like, the business case asks: what will be the outcome in business terms if we take this action or that? In contrast to the business plan questions, the business case addresses questions like: What will be the financial outcome if we choose x or do y? What important non-financial consequences can we expect in either case? What will we require a capital budget next year if we decide to buy the service cars instead of leasing them? (Larriveee, 2012)
A business case is organized around a single decision or a single action and its alternatives while a business plan is organized around an organization or the whole business. The plan may cover a single manufactured good or product line or the whole enterprise. A business case predicts cash flow outcome and important non-monetary impacts that follow from the action while a business plan predicts company performance of the organization, especially in the main categories of the income statement. A business plan may include projected pro- forma balance sheets or income statements for future years. A business case focuses on business objectives for the action meant to be accomplished while a business plan focuses on the business goals for the organization. A business case is based on a cost model and profits rationale, intended for the case, and applied to single or more action scenarios while a business plan is based on the business model for the association. Showing how and where the enterprise makes money, same to income statements. A business case measures financial metrics such as IRR, ROI, NPV, TCO, and payback period, based on estimated cash flow. Also include significant non- economic impacts. A business plan measures business performance in terms of sales, profits, margins, and business health by involvement to large balance sheet categories. A business case in a government organization or in a non-profit organization, the scope of the case may include advantages and costs to the people served as well as the business itself. A business plan may focus on budgetary requirements, funding needs, and ability to operate within the financial plan (Larriveee, 2012).
Conclusion
A business case is intended to justify a particular course of action or decision relating to an existing business or organization. For instance, a human resource manager may write a business case for increasing the number of workers while a production manager may write a business case for acquiring a new production machine (Harvard Business School Press 2011). A business plan is generally prepared while starting an enterprise to describe an acknowledged opportunity, the manufactured goods or services to meet the occasion, the target market, and the business strategy to win against competitors. As a business document, a business plan informs the entrepreneur and the financier the monetary requirement and the project performance of the company. The primary purpose of preparing a business plan is to solidify funding by describing to the potential funders not only the practicality of the business opportunity, but also the strategies to assure the success of the company. It is critical to comprehend the use of each of the business documents.