Preparing a Business Case
Cost Justification
This book examines how to prepare a business case:
- How do we prepare a Cash Flow Impact Statement?
- How do we quantify and present intangible benefits?
- What are Displaced Costs and what are Productivity Gains?
- How do we present Increased Revenue?
- How do we present Cash Flow Improvements?
- How should we present the results?
- What are the dangers of Net Present Value and Internal Rate of Return?
With these questions answered you can:
- Present convincing financial arguments for your product
- Talk the language of the financial evaluators of your proposal
- Sell the value of your offering to reduce the pressure on the cost
The book is a practical down to earth handbook for any salesperson who has to present a business case. It describes the best way to lay it out.
Generally the costs are easy to identify. The benefits, however, are more tricky. Financial benefits come in two flavours:
- Displaced Costs. Those invoices which will no longer arrive due to the change. Typically these are easy to identify. But often, they are not the real reason for buying, unless it is a raw commodity that you are selling.
- Productivity gains. These benefits are typically harder to quantify accurately. Sales will increase; staff turnover will drop with financial implications on recruitment, training, lost sales. They are the real reason for buying. It is a major task to persuade the prospect to allow these issues into the justification. This book explains how to do it.
The book also highlights the risks and dangers of preparing a business case:
- When is it risky to try to cost justify a purchase?
- Why you should avoid dealing with tax issues?
- What should you do if there is no financial case?
- How do you present Revenue Increase and Cost Reductions?
- How do you present improvements in cash flow?
- What are the legal issues and risks?