Building the Business Case for Growth

WRITTEN BY

22-12-2022

Many organizations struggle to “get the green light” for growth plans, as there is often difficulty in constructing a solid business case for expansion. Therefore, it is essential for any business to understand the key components necessary to make a case for growth. By addressing the questions of “why, when, and how”, a compelling business case can be developed.

If you are looking to write the business case for steady, sustainable growth for your organization, you need a growth strategy with a detailed plan to increase sales and revenue.

This article explores the steps in building a robust business case for growth, and the best practices for creating the revenue growth model.

Following these steps ensures that your business case is robust and that your organization has the best chance for growth and success.

(When you are done, check out the "Business Case Templates" for tools and resources to develop a robust business case.)

1. Develop an effective business growth strategy for your organization

Growth is essential for any business but requires careful planning and execution. A business growth strategy should consider the current and future needs of the business, as well as potential risks and opportunities. It should also outline the actionable steps necessary to achieve the desired growth goals.

If you are looking to write the business case for steady, sustainable growth for your organization, you need a growth strategy with a detailed plan to increase sales and revenue.

To start, define your business goals, making sure their specific, measurable, attainable, relevant and timely. Then construct the strategies to support these goals.

Your growth strategy is the big-picture roadmap to get your business from where it is now to where it wants to be in the future.

When developing a business growth strategy, there are several important factors to consider, such as sales channels, customer segmentation, market research, competitive analysis, product or service development, and financial forecasting. In addition, the strategy should include clear objectives and measurable goals to ensure success.

With the right strategy, a business can unlock new growth opportunities and reach its full potential.

2. Create the revenue growth model

Once you’ve identified the goals for growth and the strategies to reach them, it’s time to create a realistic revenue growth model and timeline.

Once you have identified potential growth opportunities, the next step is developing the revenue growth model. A revenue growth model is a planning process that quantifies how to grow revenue over a given period based on marketing, sales, and resources.

This revenue growth model should include a detailed breakdown of the projected sales revenue by sales channels and customer segments for each stage of the growth strategy.

Having a realistic revenue growth model will help ensure that your business case is robust and compelling and supports your business case for growth.

3. Evaluating the impact of the growth on your resources and capabilities

Evaluating the effects of growth on your resources and capabilities is essential when building the business case for growth. This means taking an honest look at the current state of your organization and understanding the areas where you are strong and where you need to invest in growth.

Build into your revenue growth model the cost of these resources, plus all the marketing and sales expenses.

This requires assessing the resources and capabilities needed to deliver on the growth strategy. It also requires you to consider the potential risks associated with growth and how your resources and capabilities can help mitigate them. The key is to understand the current state of your organization and how the additional resources and capabilities required for growth will affect it.

This evaluation should include financial, human capital, and technology resources and capabilities, as well as an understanding of the competitive landscape, customer needs, and regulatory requirements.

This revenue growth model should include a detailed breakdown of expected expenses for each stage of the growth strategy. It should also include estimates for marketing, sales, and operational costs.

4. Assessing the risks

By taking the time to analyze the potential risks associated with the growth strategy. This will help you develop a realistic business case.

Researching, understanding and assessing the associated risks is key to developing a successful business case for growth.

When assessing potential risks, consider the possible adverse effects on the business and the potential financial costs involved. Consider the strategies to mitigate those risks, such as obtaining additional capital or developing a risk management plan.

5. Complete the financial analysis

Here you will need to complete the financial analysis using discounted cash flows using a risk-adjusted discount rate.

Discounted Cash Flow Analysis - Revenue Growth Model Projections

Discounted cash flow (DCF) is a valuation method used to estimate the value of the business case growth strategy based on its expected future cash flows.

DCF analysis attempts to figure out the value of an investment today based on the revenue growth model projections of how much money it will generate in the future. DCF analysis involves calculating the discounted cash flows for a growth strategy using a risk-adjusted discount rate.

The discounted cash flow should include the following:

Net Present Value (NPV)
Internal Rate of Return (IRR)
Discounted Payback Period
Profit to Investment Ratio

The discounted payback period gives the number of years it takes to break even from undertaking the initial growth strategy investment by discounting future cash flows and recognizing the time value of money.

The profit-to-investment ratio measures profitability by comparing the cash flows created by the growth strategy investment.

6. Present the business case in a convincing way to decision-makers

Once you have developed your business case for growth, it’s time to present it to decision-makers.

Your presentation should be clear, concise and convincing. Present the data and your plan in an organized, easy-to-follow manner. Outline the steps you recommend achieving the projected growth.

Explain the benefits of the growth strategy in terms of sales revenue growth, the channels and customer segments, market share, etc. Show how your plan will create value for the organization over the long term. Lastly, address any potential risks and provide a plan to mitigate them. Finally, provide decision-makers with the information they need to make an informed decision.

In conclusion, building the business case for growth is essential to any successful strategy. It helps ensure that the growth is sustainable, profitable and achievable.

Following these steps ensures that your business case is robust and that your organization has the best chance for growth and success.

If you want help putting together your own Business Case, Chase Consulting can help; reach out to our team to get started today.

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Business case templates

Creating a consistent and reliable approach to quantifying the growth in business cases is essential.

Business case templates provide a proven structure for developing, evaluating, and writing the recommendations to proceed with the innovation, project or investment. In addition, business case templates serve as a valuable resource to use across all your projects. Some organizations have different business case templates, each designed for various types and sized projects.

You can download our provenbusiness case templates here.

If You Need Business Case Templates, here is a Set of Proven Templates.

Our Business Case Templates are an in-depth resource that breaks down each stage of the business case process, so you can have a comprehensive overview of what needs to get done. The customizable business case templates will set you up for success.

The Workbook details the critical information you will need in the business case document and provides valuable tips and insights.

The Business Case Templates consists of all the ready-made templates to analyze business problems, opportunities, benefits, risk, costs, including investment appraisal, feasible technical solutions, timescale, impact on operations, and organizational capability to deliver the project outcomes in no time.