What is a Business Case?
A business case is a structured document that analyzes a proposed investment, project, or strategic decision to determine whether it should proceed. It presents the problem, evaluates options, projects financial outcomes, assesses risks, and makes a clear recommendation. Business cases are how organizations justify major decisions - from launching new products to making acquisitions to building new facilities. Understanding business case structure is essential for consultants who often build them for clients.
| Definition | Documented analysis justifying a business decision |
| Purpose | Enable informed decision-making on investments and projects |
| Key components | Problem, Options, Financials, Risks, Recommendation |
| Common triggers | Capital investment, product launch, M&A, market entry |
| Typical length | 5-20 pages (executive summary + detail) |
Definition
A business case answers a simple question: "Should we do this?" Whether "this" is building a new factory, entering a new market, or acquiring a competitor, the business case provides the structured analysis needed for decision-makers to commit resources.
The document serves multiple purposes: it forces clear thinking about the opportunity, documents assumptions for future reference, enables comparison of competing investment options, and provides accountability by linking decisions to projected outcomes.
In consulting, business cases are a core deliverable. Clients often engage consultants specifically to build rigorous business cases - because the analysis requires specialized skills, or because an external perspective provides credibility with the board or investors.
Business Case vs. Case Interview
These terms often confuse candidates. Here's the distinction:
| Aspect | Business Case | Case Interview |
|---|---|---|
| What it is | Written document | Interview format |
| Context | Real business decision | Hiring evaluation |
| Time | Days to weeks | 20-45 minutes |
| Data | Real research and analysis | Provided by interviewer |
| Purpose | Justify a decision | Test problem-solving ability |
Case interviews often simulate the analysis that would go into a business case. When an interviewer asks "Should our client enter market X?" - they're asking you to think through what would become a formal business case if done in a real engagement.
Components of a Business Case
1. Executive Summary
The recommendation upfront (BLUF). One page maximum. Busy executives may only read this section, so it must contain the key takeaway: "We recommend Option B with a $15M investment, generating $8M annual savings and 2.5-year payback."
2. Problem Statement
What decision needs to be made and why now? What's the cost of inaction? Clear problem framing prevents scope creep and keeps analysis focused on what matters.
3. Options Analysis
Present 2-4 realistic alternatives, always including "do nothing" as a baseline. For each option: description, pros/cons, strategic fit, resource requirements. Avoid strawman options - all should be genuinely viable.
4. Financial Analysis
The quantitative heart of the business case. Include: investment required, projected revenues/savings, NPV, IRR, payback period, and sensitivity analysis showing how results change with different assumptions.
5. Risk Assessment
What could go wrong? Identify key risks, assess probability and impact, propose mitigation strategies. Acknowledging risks builds credibility; ignoring them undermines it.
6. Implementation Plan
How would we execute? Key milestones, timeline, resource requirements, governance structure. Shows the recommendation is actionable, not just theoretical.
7. Recommendation
The clear ask: "We recommend proceeding with Option B. The required investment is $15M with an expected NPV of $25M. Key next steps are..." Be decisive - hedging undermines the purpose.
Key Financial Metrics
| Metric | What it measures | When to use |
|---|---|---|
| NPV | Total value created in today's dollars | Primary decision metric |
| IRR | Annualized return percentage | Compare to cost of capital |
| Payback Period | Time to recover investment | Risk/liquidity concerns |
| ROI | Simple return percentage | Quick comparisons |
Example: New Distribution Center Business Case
Executive Summary:
"We recommend building a new distribution center in Dallas for $25M. This investment will reduce shipping costs by $6M annually and cut delivery times for 40% of customers. NPV of $18M with 3.2-year payback. Key risk is construction delays; mitigated through experienced contractor selection."
Options Considered:
- • A: Do nothing - Continue using 3PL, costs increasing 8% annually
- • B: Build Dallas DC - $25M investment, own operations (Recommended)
- • C: Lease existing facility - Lower upfront ($5M) but higher ongoing costs
Key Financials: NPV $18M | IRR 22% | Payback 3.2 years
Related Concepts
- Case Interview - The interview format that simulates business case analysis
- Profit Equation - Framework for the financial analysis section
- Due Diligence - The analysis process that often produces business cases
Frequently Asked Questions
What is a business case?
A business case is a documented analysis that justifies a business investment or decision. It presents the problem, evaluates options, projects financial outcomes, assesses risks, and makes a recommendation. It's how organizations decide whether to commit resources to a project.
How is a business case different from a case interview?
A business case is a real document used in business to justify decisions - it takes days or weeks to create. A case interview is a 20-45 minute hiring exercise where you solve a business problem verbally. Case interviews often simulate the thinking that would go into a written business case.
How long should a business case be?
The executive summary should be 1 page. The full document is typically 5-20 pages depending on complexity. Supporting analysis and data can go in appendices. Remember: executives won't read 50 pages. Be concise and put the recommendation upfront.
Practice Business Case Analysis
Build the analytical skills needed for business cases through realistic case simulations.
Start PracticingLast updated: January 15, 2026