The differences between a business case and a business plan

Business cases and business plans are similar in that both are arguments for an investment combined with a plan to deliver the investment. The scope and subject that they analyze is the main difference. For a business case, it's a project; for a business plan, it's a company.

Similarities

  • Both have "top lines." For a business case, the top line is the benefits from the project or initiative. For a business plan, the top line is expected revenue.
  • Measure ROI in cash. Both business cases and plans should ultimately be measured in cash flow. Use net present value and discounted cash flow for a business case. Use the same, often supplemented by internal rate of return (IRR), for a business plan.

Differences

  • Subject scope. For a business case it's a project or initiative. For a business plan, it's a whole company or business unit.
  • Model complexity. For a business case, you need a benefits model (who will use, what volume, and their willingness to pay) and cost model. Users are usually just internal and there are no competitors. A business plan requires a full business model and the revenue model will face the full uncertainties of dealing with outside customers and competition.

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