Having worked with many entrepreneurs, I’ve noticed a trait common to every single one: optimistic opportunism. Of the many stories I hear, my favourite is the how-it-all-started type. Almost always, each story is buoyed by unfaded emotions of change-the-world excitement or, sometimes, a halcyon nostalgia of better times.
Except, the problem with opportunistic optimism – just like every overdone strength that becomes a weakness – is that it distracts. Enter the business case. Maybe you’ve heard of the term, but do you know how to develop the case for greenlighting – or shelving – your next big idea? With a little more structure to our decision-making process, we’d surely make better decisions and improve our success rates by blocking failures-in-waiting from ever seeing the light day.
Although I don’t want to deny anyone their entrepreneurial essence, we do need to temper our opportunistic streak ever so briefly when making big decisions. The good news is that “briefly” is the emphasis. The title’s ambiguity is intentional – it’s both “small-business case” and “small business-case”. To reinforce this, it’s about writing a business case for our eyes, not our bank or investor, so keep it as simple and informal as possible.
Although you’ll easily find many templates online about everything that goes into a comprehensive business case – I should know; I’ve written a university course on it! –there’re really only 5 key sections of content that we really need to nail down:
- Define the opportunity (or problem to be solved): Outline the opportunity and solution scope. Quantify things like your ideal customer, the market size, market reach, competitors, how your business is positioned for the solution. Manage your bias: research both the pros and cons of your decision.
- Shortlist your options: These could be your candidate products or suppliers, the methods to supply your inputs, or the distribution of your outputs. Do not have only one solution contender: by definition, no idea can be the best idea if it’s the only idea because it’s then also the worst idea.
- Analyse the feasibility of each option: Consider each feasibility area, such as product-market validation, economic feasibility (e.g. cost-benefit analysis), funding, strategic alignment, brand fit (does it strengthen or weaken your brand?), technical fit, operational readiness (how much must your business change to exploit it?), organisational (people and skills), schedule, legal, social, key risks etc.
- Future state: By this stage, the best solution should be known. Envision key aspects of your business after the solution is implemented. E.g. financials like budgets and cash flow plans, business processes, technology and machines, people and skills.
- Project plan: Define the project’s objective using the iron triangle of scope, budget and schedule. Break down this objective into the detailed tasks needed for each project’s level of complexity. If you can’t plan all the steps, at least plan the next step.
I know I mentioned that we should keep it informal because we’re writing it for ourselves, but I lied!
Once you’ve jotted down some content for each of the 5 stages, get family and friends to proofread it. Is it watertight? After all, the whole point of taking an hour or a day to develop a business case is to save ourselves from ourselves, right?
So as tough as it might be on the ego, wouldn’t you rather have holes poked in bad ideas than bad ideas poking holes in your business?
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