Business Case vs Business Plan

In business today, almost everyone takes keen interest in issues such as cost savings, competing for funds, and accountability. In this climate, people often confuse these two terms without knowing clearly what each means or how they differ.

As a result, many business people sometimes have to ask:

“What’s the difference between “business case” and “business plan?” 

Business case vs Business Plan. Can you explain the difference? interchangeable terms.

It’s a question you may have to answer many times for your colleagues and your leaders. People often use the terms interchangeably or ask for one when they mean the other. Firstly, they no doubt they confuse the two because both support decision making and planning. Secondly, they confuse the two probably because both project future business results. The conclusion, briefly, is that these tools compliment each other, but they different. They address different questions. And they serve different purposes.

Before you set out to build a business case or build a business plan, or before you ask someone to bring you one or the other, be sure that everyone understands clearly the special focus of each.

Is It About the Action Or Is It About the Business?

The business case and the business plan both look into the future and complement each other. How do they differ? In a nutshell, a business case concerns an action, while the business plan focus is the business.

Firstly, use the business case instead to answer “What happens if…?” questions like these:

• What are the financial outcomes if we choose the IBM proposal? And what can we expect if we choose the HP Proposal?
• What will we need as a capital budget next year if we decide to buy the service vehicles instead of leasing them?
• And, does the investment in new phone technology justify the expense? And, is there a positive ROI?

Secondly, use the business plan to answer questions about the future of the business such as these:

• What will we see in sales and margins next year? And, what can we expect in revenue growth next year?
• What should we set as targets for strategic business objectives? And, what are our business performance and financial position when we reach those objectives?
• How many years will it take before this startup company starts earning profits?

When deciding which tool you need, or when explaining the difference to someone else,

Start with the major differences that follow from focusing either on an action or focusing on the business

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