6.8 Building the business case for management
Key idea: a good business case shows the money, the risks and the non-money benefits on one page, with honest assumptions.
Management wants clear answers. How much? How fast does it pay back? What could go wrong? What else do we gain?
Present one recommended option plus the "do nothing" baseline. Show every assumption so a finance team can check it.
| Section | What to include |
|---|---|
| Baseline | 12 months of fuel bills, hot water demand, current problems |
| Proposal | Capacity, tank size, location, backup plan |
| Financials | Capex, annual saving, payback, ROI, NPV |
| Sensitivity | Results at ±20% fuel price and ±15% COP |
| Risks | Power cuts, water quality, space, maintenance skills |
| Benefits | CO₂ saved, no fuel storage, safer kitchens, ESG (environmental, social, governance) reporting |
| Ask | Budget, approval date, project timeline |
Worked example — sensitivity table for the Bengaluru hotel
Base: LPG cost ₹4.20 lakh/yr, heat pump cost ₹1.30 lakh/yr, capex ₹9.0 lakh.
| Case | LPG cost/yr | Heat pump cost/yr | Saving/yr | Payback |
|---|---|---|---|---|
| Base | ₹4.20 L | ₹1.30 L | ₹2.90 L | 3.1 yr |
| LPG price −20% | ₹3.38 L | ₹1.30 L | ₹2.08 L | 4.3 yr |
| LPG price +20% | ₹5.02 L | ₹1.30 L | ₹3.72 L | 2.4 yr |
| COP 3.0 instead of 3.5 | ₹4.20 L | ₹1.49 L | ₹2.71 L | 3.3 yr |
LPG ±20% applies to the fuel part (₹4.10 L) only; maintenance stays ₹0.10 L. At COP 3.0, electricity = 44,560 ÷ 3.0 × ₹9 ≈ ₹1.34 L, plus ₹0.15 L maintenance.
Remember
- Always compare against "do nothing".
- Show every assumption and its source.
- Include a sensitivity table; it builds trust.
- Add non-money benefits such as CO₂ and safety.
- Finish with a clear request and timeline.
Common mistake: presenting only the best case. One surprise later can sink trust in every future project.
a good business case shows the money, the risks and the non-money benefits on one page, with honest assumptions.
Rating
There are no comments for now.
to be the first to leave a comment.