6 Steps to Building a Better Business Case
Convincing other parties to buy into your viewpoint is critical to growing your business. A compelling business case is much more about substance than style. You need to present a perspective that is relevant to the person or group you are trying to convince to purchase your product, become a business partner, or invest in your company. You need to get to the heart of why this activity is in their best interest.
We use six questions to help build a solid business case and make it relevant to each party. See if these work for you.
1. What is the potential value in this situation?
A strong business case begins with a logical financial and strategic foundation for value creation. If you are selling a product, this is as simple as explaining why the product creates more value for the customer than any alternative. If you are selling the idea of a business partnership, you’ll want to focus on why the partnership will create a high return on investment.
2. Who do you need to convince?
This question can be more challenging than it seems. If you are selling a product, your obvious target is the customer or prospect. But in many cases, other influencers are part of the equation, such as family members (for consumer goods) or various people in an organization (for business-to-business transactions). If you are attempting an acquisition or venture investment, this question becomes even more complex because the transaction usually involves multiple parties, such as investors, sellers, and business advisors.
3. What motivates each party?
It’s important to understand what drives a stakeholder’s behavior and focus. Are they trying to achieve return on their own capital investment? Career enhancement? A better reputation? Each of motivations requires a response that is properly aligned. For instance, if your target is focused on doubling its business, pitching a 10% savings on a product won’t convince them to do business with you. But pitching a product that will help ensure future growth will be very attractive.
4. What items will you need to seal the deal?
When working with an entrepreneur or investor, you probably want to emphasize the upside, like growth potential or maximizing return on capital. On the other hand, when pitching a large corporation or government organization, it’s often better to focus on protecting the downside with a business case that breaks down any barriers to action and makes it easy for the organization to accept it.
5. What actions do you want each party to take?
Many business owners do a great job building a case but fail to lay out the specific path the stakeholder can take to follow through to a desired outcome. As an example, in the life insurance industry, more than 30% of the customers who fill out an application never end up taking a medical exam or paying the first premium. They committed to the idea of life insurance but failed to follow through. A strong business case will make this process crystal clear.
6. How can you most effectively communicate the action you want them to take?
There is some style involved in building a better business case. Presentation is important and the format depends on your target. Is it a PowerPoint deck, a quick phone call, or an in-depth discussion over dinner? Tailor your message to the style of the audience.
If you follow this framework, you will be able to sell you viewpoint without any fancy sales pitches or techniques. The answers to these questions will vary for every case you create, but they have served us well as we’ve grown our business.
KARL STARK AND BILL STEWART | Columnist | Co-founders, Avondale
Karl Stark and Bill Stewart are managing directors and co-founders of Avondale, a strategic advisory firm focused on growing companies. Avondale, based in Chicago, is a high-growth company itself and is a two-time Inc. 500 honoree.