how to write justification in business plan

How to Write a Business Justification

by Mackenzie Maxwell

Published on 21 Nov 2018

Any time a business goes through major changes, a business justification can help the leaders set the appropriate course of action. You may need this document, which is also called a business case, if you are just starting a business, expanding into new territory or changing your company structure. Furthermore, you will often need these any time your business applies for funding from investors or lenders. To make this document as useful as possible, make sure to learn to write it correctly.

Call Out the Problem You Solve

The most successful businesses solve a problem for customers. It can be a global problem, like companies that create alternative energy or make allergen-free foods. However, solving local or relatively small problems can be just as convincing for this purpose. For example, a rural grocery store may realize that the community has no coffee shop. If such a store wanted to get a loan to install a cafe in the store, the leaders may say that they will solve this issue in the town.

Depending on what you will use your business case for and how obvious the issue is, the length of this section will vary. If you need this document for your own decision-making process and the need you solve is exceedingly obvious, you may just start with a paragraph on the need you fill. However, if you need plenty of funding or the issue is complicated, you should consider adding research and charts.

List the Alternatives

Once you have convinced the reader that there's a problem to solve, you can show that you have considered all the possible ways of solving it. In some business justifications, it's appropriate to show that you are open to the options on this list.

Consider a local restaurant with owners who want to expand into a franchise. They may list alternative locations throughout the surrounding cities. To help shareholders, lenders or themselves make the decision, the writer may also list advantages, problems, research and notes on each possible new site.

List the Positive Possible Outcomes

In the next section of the business case, identify as many advantages to your plan as you can. These positives should include any monetary gain or savings. However, you do not have to limit yourself to the numbers. Think about a business that wants to expand their marketing strategy. The first advantage may be increased brand awareness. The writer may then also include an estimate of increased revenue from new customers.

If you can find facts or conduct research to back up your claims, these can be helpful. However, you do not usually need to spend more than a paragraph on each positive outcome. Be as specific as you can in those three or four sentences.

Weigh the Risks

No business decision is completely without risk. As uncomfortable as it can be to consider the possible downsides of expanding or starting a company, it's important to give this portion of the case as much attention as the advantages. Like in the previous section, these points can be qualitative or quantitative.

Some of the risks may be unavoidable. For example, if you decide to expand into one town, you may have an opportunity cost for not investing in the alternatives. If you find a risk that is completely avoidable while you solve the problem, the justification has done part of its job. Think through ways to mitigate or eliminate this potential downside.

Assess Scope and Impact

Finally, you should outline how far you want to take this project for the time being and how it will affect day-to-day operations. Clearly explain the scope of the project or business. Although you may have big goals in your mind, keep the scope here relative to your audience.

For example, if you're only trying to gain funding to expand to one more location, limit the scope to this for the time being. You can always add more when you're ready to make your brand a global phenomenon. For this situation, the impact on your business may include the number of employees you will bring on. This may have additional impacts on your company. For example, if the expansion brings your total full-time employee number above 50, you may have to provide health insurance.

Be as specific as possible about each point and follow them to their logical conclusions. You may find that there is a different way to structure the project that has more favorable impacts. Remember that this means the business justification is working well.

How to Write a Business Justification

As an entrepreneur, small business owner, or an up-and-coming manager, there comes a time when you have to make a decision that requires funding, or has broader implications on your business. This is where a well-constructed business justification can be your most powerful tool. Not to be confused with a business plan, a business justification is a clear, concise, and evidence-based document that explains the rationale for an action. It's like a legal brief for business decisions, where you act as your own advocate.

Creating a convincing business justification entails several crucial steps, which we'll outline here. Mastering this process could mean the difference between green-lighting a project or seeing it fall by the wayside due to inadequate explanation. In this guide, you'll learn how to write a business justification that will not only back your decisions but also cement your reputation as an informed and strategic business thinker.

Step 1: Define Your Objective

Before you dive into compiling data or making a case, it's essential to clearly define the objective of your business justification. What are you proposing, and why? This initial step sets the stage for the entire document, providing a clear purpose and focus.

Clearly State Your Justification's Purpose

Begin by stating the decision that needs to be made. Whether you're proposing to implement a new software system, increase marketing spend, or hire additional staff, be specific. Avoid vague language that can lead to misinterpretation. For example, "This business justification is to fund the development of a new mobile app, targeting millennial consumers, to increase our e-commerce sales by 25% within the next fiscal year."

Step 2: Gather Relevant Data and Information

Armed with a clear objective, the next step is to collect the necessary data and information to support your justification. This can include market research, financial statements, and any pertinent internal metrics related to the project.

Identify the Key Data Points

You need to know the ins and outs of the project. Gather sales figures, cost projections, and any other relevant quantifiable data. If applicable, survey your customers or get feedback from your staff. The goal is to have data that paints a complete picture of the project's necessity and potential impact.

Research Industry Standards and Competitor Activity

Benchmark your findings against industry norms and competitor activities. Understanding how your proposal stacks up against what is currently considered standard practice or best in class can bolster your case.

Step 3: Analyze the Costs and Benefits

A critical aspect of your business justification is to analyze the financial implications of the decision you're advocating for. You should be able to confidently discuss not just the costs, but also the benefits and potential ROI.

Assess Financial Implications

Estimate the financial outlay required for your proposal. Be as accurate as possible, and if necessary, consult with peers, industry experts, or vendors for cost estimates.

Calculate the Potential Return on Investment

Once you've laid out the costs, the next step is projecting the expected return. This could be increased revenue, cost savings, or an improvement on key performance indicators. The more specific and evidence-based you can be, the stronger your case.

Step 4: Present the Business Case

Now that you have all your data in hand, it's time to present your business case. You should structure your argument in a clear and logical manner that anyone reading it can follow.

Organize Your Justification

Start with an executive summary that gives a snapshot of what's to come. Follow with a detailed explanation of your proposal, including the need, the solution you're proposing, and the potential outcomes.

Use Evidence to Strengthen Your Case

Every assertion you make should be backed by evidence. Refer to the data you've collected and any relevant case studies that support your position. Visual aids such as charts or graphs can be hugely beneficial in conveying complex information.

Step 5: Anticipate and Address Potential Concerns

In any decision-making process, there will be objections and concerns. You will need to anticipate these and have responses ready to mitigate doubts.

Identify Potential Objections

Think through your proposal from multiple perspectives. What might a financial director, a senior leader, or even a customer object to? By considering these viewpoints, you can craft a more balanced and comprehensive justification.

Provide Counterarguments

For each potential concern, provide a well-reasoned counterargument. This will demonstrate that you have thought through the risks and are prepared to address them.

Step 6: Summarize and Conclude

Your justification should conclude with a concise summary of your argument, reiterating the essential points that support your proposal.

Recap the Main Points

Briefly recap the main elements of your business case, including the need for the proposal, the potential benefits, and how it aligns with the company's strategic objectives.

Emphasize the Benefits and Potential Outcomes

Highlight the potential positive outcomes if your proposal is approved. This should reinforce the value of your project.

Writing a business justification is a skill that can have long-reaching benefits for you and your business. By following these steps, you can create a document that persuasively argues for a course of action, and in doing so, you demonstrate your ability to think critically and strategically. Remember, clear communication and evidence-based thinking are at the heart of a compelling business justification. Good luck in your decision-making endeavors!

how to write justification in business plan

Shaun Hinklein is the Head of SEO at Ramp. Prior to Ramp he built and executed SEO campaigns for Squarespace, Walmart, and Comic Con. Graduating from Rutgers University with a Journalism degree Shaun began his career at MTV News where he became responsible for maintaining Wordpress websites and gaining traffic to them. Learning SEO as a way to achieve that goal, Shaun built dozens of specialized websites for agencies, record labels, and nonprofits before starting his startup career at an incubator in Brooklyn. There he would accept the responsibility of leading SEO at Jet.com , which would later be acquired for $3.3B by Walmart. When not solving SEO puzzles or building growth campaigns Shaun is scoring music for independent games from his home office in Red Bank, NJ.

Not logged in

Business justification, page actions.

View source

Business justification (also: business case , business rationale ) prepared for the project is one of the foundations for its implementation. It allows to assess the desirability, reasonableness and purposefulness of future activities and to assess the probability of success of implementation in the short and long-term perspective. The business case of the project is also a document allowing the entities and institutions supervising the project ( stakeholders ) to take and justify decisions having an impact on the course of the project. This is one of the essential parts of the basic document initiating the project: Project Charter . To a minimum extent, business justification defines the expected results of the project and gives direction to the project team

1 The role of business justification
2 Example structure of business justification
3 Example business justification for a project
4 Benefits of business justification
5 Limitations of business justification
6 Other documents necessary in early project stage
7 References

The role of business justification

The role of a business justification in a project is to provide a comprehensive and persuasive argument for why the project should be undertaken and to demonstrate that it is a worthwhile investment for the organization . It helps to ensure that the project is aligned with the organization's overall goals and objectives , and that the proposed solution is the most efficient and effective way to address the problem or opportunity.

A business justification serves as a guide for the project team, outlining the scope, objectives, deliverables, and key stakeholders for the project. It also helps to identify potential risks and contingencies, and outlines a plan for mitigating them.

It also helps to secure the necessary resources, including funding and personnel, for the project. By providing a clear and compelling argument for the project, stakeholders such as upper management and investors are more likely to approve and allocate resources for the project.

In addition, a business justification helps to ensure that the project is well-planned and executed, by providing a clear and measurable set of objectives and benefits, as well as a detailed plan for implementation and governance.

The business justification serves as a roadmap for the project, outlining the steps necessary to achieve success and demonstrating the potential benefits to the organization.

Example structure of business justification

A business justification typically includes the following sections:

Executive Summary : A brief overview of the key points of the business case, including the problem or opportunity, proposed solution, projected costs and benefits, and recommended course of action .
Problem or Opportunity : A detailed description of the problem or opportunity that the project is meant to address, including the impact it has on the organization and the reasons why a solution is needed.
Proposed Solution : A description of the proposed solution, including the project scope , objectives, and deliverables.
Project Costs : A detailed breakdown of the projected costs of the project, including expenses for materials, labor, and any other necessary resources.
Project Benefits : A detailed analysis of the projected benefits of the project , including financial and operational benefits, and how they align with the organization's overall goals and objectives.
Risk and Contingency : A description of the potential risks and contingencies associated with the project and the plan for mitigating them
Implementation and Governance : A description of the plan for implementing the project, including timelines, milestones, and key stakeholders.
Conclusion : A summary of the key points of the business case, including the problem or opportunity, proposed solution, projected costs and benefits, and recommended course of action.
Appendices : Additional information and supporting documents, such as financial projections, market research, and regulatory analysis.

It should be noted that the structure of the business justification can vary depending on the organization, project, and audience, but the above-mentioned sections are the common elements that most business justification should have.

Example business justification for a project

Here's an example of a business justification for a project to implement a new customer relationship management (CRM) system :

Executive Summary : The current customer relationship management system is outdated and not able to keep up with the demands of the business. A new CRM system is needed to improve customer satisfaction , increase sales, and streamline internal processes. The proposed solution is to implement a new CRM system at a cost of $500,000, with projected benefits of $1 million in increased sales and cost savings of $250,000 per year. The recommended course of action is to proceed with the implementation of the new CRM system.
Problem or Opportunity : The current CRM system is outdated and has limited capabilities , resulting in poor customer satisfaction and lost sales opportunities. In order to stay competitive and meet the demands of the business, a new CRM system is needed.
Proposed Solution : The proposed solution is to implement a new CRM system that includes features such as automation of sales and marketing processes, improved data analysis and reporting, and enhanced customer tracking and communication capabilities. The project scope includes the purchase and implementation of the new CRM system, as well as training for all employees on its use.
Project Costs : The projected costs for the project include the purchase of the new CRM system at $400,000, implementation and customization costs at $50,000, and employee training at $50,000. The total projected cost of the project is $500,000.
Project Benefits : The new CRM system is expected to generate $1 million in increased sales through improved lead generation and tracking capabilities. Additionally, the automation of internal processes is expected to result in cost savings of $250,000 per year.
Risk and Contingency : There is a risk that the new CRM system may not be fully adopted by employees, resulting in limited benefits. To mitigate this risk, a plan for training and support will be put in place. Additionally, the project will include a pilot phase to test the system before fully implementing it.
Implementation and Governance : The project will be overseen by a steering committee , including representatives from sales, marketing, and IT departments. The project will be broken down into phases, including requirements gathering, selection of vendor, customization and testing, deployment, and post-implementation support and monitoring.
Conclusion : A new CRM system is needed to improve customer satisfaction, increase sales, and streamline internal processes. The proposed solution is to implement a new CRM system at a cost of $500,000, with projected benefits of $1 million in increased sales and cost savings of $250,000 per year. The recommended course of action is to proceed with the implementation of the new CRM system.
Financial projections for the new CRM system
Vendor comparison and selection report
Project timeline and milestones

This is an example of a business justification, but it should be noted that the contents, format, and details of the justification should be tailored to the specific project and organization.

Benefits of business justification

There are several benefits of creating a business justification for a project, including:

Alignment with organizational goals and objectives : By clearly outlining the problem or opportunity the project addresses and the projected benefits, a business justification helps to ensure that the project is aligned with the organization's overall goals and objectives.
Securing resources : A well-written business justification can help to secure the necessary resources, such as funding and personnel, for the project by providing a clear and compelling argument for the project.
Identifying potential risks and contingencies : A business justification helps to identify potential risks and contingencies associated with the project and outlines a plan for mitigating them.
Improving project planning and execution : By providing a clear and measurable set of objectives and benefits, as well as a detailed plan for implementation and governance, a business justification helps to ensure that the project is well-planned and executed.
Demonstrating the value of the project : A business justification demonstrates the value of the project to the organization by outlining the projected costs and benefits and showing the potential return on investment (ROI) for the organization.
Communicating with stakeholders : A business justification serves as a communication tool between the project team and stakeholders, providing them with a clear understanding of the project's goals, objectives, and expected outcomes.
Evaluating project's performance : A business justification serves as a benchmark for evaluating the performance of the project and determining whether it met its objectives and delivered the expected outcomes.
Improving decision making : A business justification provides a clear and comprehensive analysis of the problem or opportunity, proposed solution, projected costs and benefits, and risks and contingencies, which helps to improve decision making.

Limitations of business justification

There are several limitations of creating a business justification for a project, including:

Uncertainty : Business justifications rely on assumptions and predictions about the future. These assumptions and predictions may turn out to be inaccurate due to changes in the market, economy, or other external factors, which can affect the project's outcome.
Limited perspective : Business justifications are typically created by the project team, which can lead to a limited perspective and potential biases. This can result in an incomplete or inaccurate assessment of the problem or opportunity, proposed solution, projected costs and benefits, and risks and contingencies.
Lack of flexibility : Once a project is approved and resources are committed, it can be difficult to change the scope, objectives, or deliverables of the project. This can lead to a lack of flexibility in addressing unforeseen issues or taking advantage of new opportunities.
Time-consuming : Business justification process is time-consuming and requires a significant investment of resources, including the time and expertise of the project team and other stakeholders.
Limited focus on implementation : Business justification process focuses more on the upfront planning, and may not have enough focus on the implementation and execution of the project . This can lead to a lack of attention to the details that are required to make the project a success.
Limited consideration of social and environmental factors : Business justification may not consider the broader social and environmental impact of a project. This can lead to negative consequences for the

User page tools

What links here
Related changes
Printable version
Permanent link

Other projects

In other languages.

This page was last edited on 17 November 2023, at 17:43.
Content is available under CC BY-SA Attribution-ShareAlike 4.0 International unless otherwise noted.
Privacy policy
About CEOpedia | Management online
Disclaimers

Business Justification: What It Is and How to Write One

A business justification is a document that explains the reasons for undertaking a project or activity. It is used to persuade stakeholders to approve the project or activity and to provide them with the information they need to make an informed decision.

A business justification should be clear, sleep-environment.org/ and persuasive. It should identify the problem or opportunity that the project is addressing, as well as the benefits that the project will deliver. It should also assess the costs and risks associated with the project and explain how they will be mitigated.

Table of Contents

How to write a business justification

To write a business justification, you should follow these steps:

Identify the problem or opportunity. What is the problem or opportunity that the project is addressing? Why is it important to address this problem or opportunity?
Define the goals and objectives of the project. What are the specific goals and objectives that the project aims to achieve?
Identify the benefits of the project. What benefits will the project deliver to the business? How will these benefits be measured?
Assess the costs and risks of the project. What are the estimated costs of the project? What are the potential risks associated with the project and how will they be mitigated?
Develop a business case. The business case should summarize the key points of the business justification, including the problem or opportunity, the goals and objectives of the project, the benefits of the project, and the costs and risks of the project.

Tips for writing a business justification

Here are a few tips for writing a business justification:

Be clear and concise. The business justification should be easy to read and understand. Avoid using jargon and technical language.
Be persuasive. The business justification should convince the reader that the project is worth investing in. Highlight the benefits of the project and how it will help the business to achieve its goals.
Be realistic. The business justification should be based on realistic assumptions about the costs, benefits, and risks of the project.
Be flexible. The business justification should be flexible enough to be updated as needed. This is especially important for large or complex projects.

A business justification is an important document that can help you to secure the resources you need to undertake a project or activity. By following the tips above, you can write a business justification that is clear, concise, persuasive, and realistic.

IT Project Business Justification Guide with Examples

November 28, 2023

Sourabh Hajela
Executive Editor - CIO Strategies

Unlock the potential of your IT projects with this comprehensive business justification guide. Learn to align projects with business goals, manage risks, and measure delivered value. The business justification guide includes real-world examples and a template to create persuasive business cases.

This package contains a complete guide to information technology project business justification - with detailed guidance on feasibility analysis, economic justification, and special considerations - a template to create a business case and detailed examples of this framework used to justify major IT initiatives. Excellent Read!

The IT Project Business Justification Guide with Examples provides an in-depth, comprehensive understanding of the process and crucial elements in creating a solid business justification for IT programs and projects. It offers a context-problem-solution approach to help IT professionals articulate the business value of proposed IT initiatives.

Today's fast-paced digital landscape demands organizations to innovate and adapt constantly. As IT projects often require significant investment, it is essential to justify these initiatives to stakeholders thoroughly. The challenge lies in creating a compelling business justification that aligns IT initiatives with organizational goals, measures the delivered value, and effectively manages project risks.

Often, IT professionals struggle to provide independent, risk-adjusted oversight for IT projects. Misalignment between project, program, and executive management's expectations can lead to failure in delivering the right functionality on time and within budget. Furthermore, accurately assessing and evaluating IT programs and projects and measuring their delivered business value can be challenging. Without a solid business justification, the chances of an IT project's approval and subsequent success can be slim.

The IT Project Business Justification Guide with Examples provides detailed guidance on the crucial aspects of building a business justification for IT programs and projects. It includes a template to help create a persuasive business case and comprehensive examples of this framework in action.

The guide instructs IT professionals on ensuring independent, risk-adjusted oversight for IT programs and projects. It provides insights on aligning expectations among various management levels and tips on effectively evaluating IT programs and projects. Furthermore, it details the risk assessment and management process in IT projects, which is crucial for risk mitigation and successful project delivery.

One of the key highlights of this guide is its in-depth discussion on creating a business justification for IT programs and projects. It systematically justifies major IT initiatives, including feasibility analysis, economic justification, and special considerations.

Lastly, the business justification guide assists in assessing the business value delivered by IT programs and projects, ensuring that the project outcomes align with the organization's strategic goals.

This package contains instructions and templates to create a business justification for IT Programs and Projects, assess performance along the way, and provide independent, risk-adjusted governance to ensure successful delivery of the correct functionality on time for the correct cost. It addresses the following:

How to ensure independent, risk-adjusted oversight for IT Programs and Projects?
How to align expectations among project, program, and executive management?
How to assess and evaluate IT Programs and Projects?
How to assess and manage risk in IT Programs and Projects?
How to create a business justification for IT Programs and Projects?
How to assess the business value delivered by IT Programs and Projects?

An excellent resource for the CIO to create and manage business cases for IT Programs and Projects.

This business justification guide is an invaluable resource for CIOs and IT professionals. It enables them to create robust business cases for their IT programs and projects, manage risks effectively, and ultimately deliver successful IT initiatives.

The IT Project Business Justification Guide with Examples provides several insights that can help Chief Information Officers (CIOs) to solve real-world problems they encounter in their roles. Here's how:

Independent Oversight : The guide provides practical methods to ensure independent, risk-adjusted oversight of IT projects. This can help CIOs manage project risks effectively, ensuring better control over project outcomes.
Aligning Expectations : The guide emphasizes the importance of aligning expectations across various management levels. By implementing these recommendations, CIOs can ensure all stakeholders have a shared understanding of the project objectives, scope, timelines, and expected outcomes, leading to smoother project execution.
Evaluating IT Projects : With guidance on project evaluation, CIOs can measure project success more accurately and objectively. It helps identify potential issues early, improving IT initiatives' overall success rate.
Risk Management : The guide provides detailed instructions on assessing and managing risks in IT projects. CIOs can use these insights to establish effective risk management processes to predict, mitigate, and manage risks, reducing project failures and cost overruns.
Creating Business Justifications : The guide offers a comprehensive approach to creating business justifications for IT projects, a critical aspect of the approval process. The feasibility analysis and economic justification techniques can assist CIOs in demonstrating the value and potential ROI of proposed IT initiatives, thereby improving the chances of securing approval from decision-makers.
Measuring Business Value : The guide provides practical techniques to assess the business value delivered by IT projects. This can assist CIOs in demonstrating the tangible and intangible benefits of IT initiatives, such as operational efficiency, cost savings, or improved customer experience, which are crucial in justifying the IT investments to the board and stakeholders.

By using the learnings from this guide, CIOs can make more informed decisions, improve project outcomes, and enhance the perceived value of their IT initiatives within the organization. These insights also equip them to effectively communicate the value of IT projects, strengthening their strategic role within the organization.

Don’t Miss These Related References:

The Project Manager's Guide to Building Compelling Business Cases
IT Investment Business Case Toolkit
Creating a Detailed Business Case for an IT Investment
Information Technology (IT) Business Case Example

Signup for Thought Leader

Get the latest IT management thought leadership delivered to your mailbox.

Business Case Guides Collection , Business Case Samples and Examples Collection

Join The Largest Global Network of CIOs!

Project Management

Business Justification in Project Management: Definition, Example, Methods

Home Blog Project Management Business Justification in Project Management: Definition, Example, Methods

Project selection is a crucial aspect of business growth, and it is one decision that decides how successfully you sail through the competitive market. Every company gets multiple projects, but not every project proves beneficial for the business. If the company starts working on a non-beneficial project, it will not yield any productive results for the business. Moreover, it will lead to resource wastage, which they could otherwise use for another project to get the desired outcomes. So, they hire experts who study different aspects and decide which projects are worth taking up. The entire process of analyzing different projects and deciding which ones should get the go-ahead is called business justification. In this article, I will discuss everything you need to know about this process and how it supports business growth.

What is business Justification in Project Management?

Business justification in project management is a process of evaluating justified reasons and significant benefits of a particular project before initiating it. The entire business justification process is the systematic assessment of how well the project aligns with the organizational goals. Highly qualified experts who have completed the PMP Certification training online or other reliable project management certifications carry out this process. The primary objective is to ensure that valuable resources are only allocated to the most valuable projects. Another benefit of the business justification is that it helps project stakeholders make informed decisions and is satisfied that every resource is being utilized efficiently. Thus, it is fair to say that this process forms a crucial foundation for project approvals and provides a rationale for resource investment.

Why is it important?

It is crucial to evaluate projects before giving them the go-ahead and assigning resources for them. You need valid reasons to prove that a particular project aligns with the overall business goals and the company will benefit by working on it. Some of the benefits that prove the significance are:

It serves as a strategic compass. The assessment you do during this process helps you prioritize initiatives that contribute the most toward long-term business success.
Another key aspect is the financial consideration. You can evaluate the return on investment (ROI) and allow your stakeholders to make informed decisions.
You can also understand the potential risks involved and implement risk mitigation strategies before any unpleasant event occurs.
There are countless benefits that make the justification process significant and highly fruitful for any organization.

Key Components of Business Justification

Business justification is an elaborate process encompassing multiple components that provide the reasons for undertaking a project. Even the best courses for Project Management emphasize learning these components to get the best results. Let me list the components for you.

Firstly, financial considerations are crucial. It includes a thorough analysis of the expected return on investment (ROI) compared to the project’s costs.
Another component is strategic alignment. It includes focusing on how well the project supports and contributes to the strategic business goals and objectives.
Risk assessment is also a key component of business justification in project management. It involves the identification and evaluation of potential risks.
Market demand also forms a critical aspect. It requires an assessment of whether the project addresses current market needs and presents opportunities for growth.

Top business justification methods

I have mentioned that business justification is crucial, and only qualified experts should conduct this entire process. Now, there are multiple Methods of business justification that help in this process and bring fruitful results. I have listed the top business justification methods for your reference.

1. Net Present Value (NPV)

It is a reliable method to evaluate the profitability of an investment by comparing the present value of expected cash inflows and outflows. If the value of your NPV is positive, the investment is favorable.

2. Cost-Benefit Analysis

It is the most widely used method for the justification of a business plan, involving a comparison of project cost and expected benefits. Through this method, one can quantify the tangible and intangible costs and perks, supporting fair and fruitful decision-making. The results are favorable if your benefits outweigh the project cost.

3. Return on Investment (ROI)

Calculating the financial metrics is another component, and ROI helps you with a fair assessment. You can calculate the ratio of the net gain from a project to the initial investment you would have to make. The percentage you get indicates the project’s profitability. If you get a positive ROI, it suggests that the project is favorable for the organization.

4. Market Analysis

Market analysis is one of the most trusted methods of business justification. By simply understanding the market demand and opportunities, the concerned teams can decide if the project is worth it. It tells if the project aligns with the market demand and helps improve the market positioning of the company. You should take it a step ahead if you see a higher market demand and popular trends associated with the project.

5. Payback Period

In this method, the experts check the time it will take to recoup the costs. The payback period is the timespan within which the investment is expected to generate cash flows to recover the initial capital invested. The decision-making is simple; the shorter your payback period, the quicker you should approve that investment.

These are the popular methods for business justification. The experts often use a combination of these methods to get a fair value and make a fruitful choice.

How do I write a business justification?

The project selection or justification process is an elaborate task. Any expert working on it requires a thorough understanding of the domain, which they gain through certifications like online PRINCE2 Foundation and Practitioner courses . Let me share the list of aspects you should cover while writing a business justification document for fair decision-making.

1. Quick Summary & Introduction

Start your document with a summary that provides a clear overview of the business justification. It will include the project purpose, expected outcomes, and the reason for a project proposal.

In the introduction part, you will provide a context to the reader. It basically specifies the opportunity the project under question will address or aim to address.

2. Project Objectives

Explain the project objectives, writing what the project aims to achieve. Experts working on the project selection process use this section to compare and ensure that the project objectives align with the organizational goals.

3. Market Assessment Report

Another significant aspect of writing the justification document is market analysis. You should attach a market analysis report demonstrating the project requirement. Research the current market trends, check customer demands, and get a justification for the opportunity in the business plan. This report is crucial in finding the right reasons to take up any project.

4. Financial Justification

Give a detailed report of cost-benefit analysis that explains the financial aspects of a project. It should include project costs, ROI, and the anticipated return.

5. Risk Assessment & Strategic Alignment

Identify the potential risks and provide an efficient risk-mitigation strategy to address those challenges.

Explain how the project complies with the strategic goals of the organization. Make sure you articulate how it will push the business toward long-term success.

6. Legal or Regulatory requirements

In this section of your document, write the legal requirements, if there are any related to your project. When you check the justification in the business plan sample, you will see there is a huge emphasis on the legal compliance part.

7. Milestones to Completion

Set a realistic timeline for the entire project and highlight the milestones. Make sure you write deliverables in front of each milestone for better understanding.

8. Resource Requirements

A project cannot move a step forward without meeting the resource requirement. So, in the justification document, you should outline all the required resources, be they technology, human resources, or physical assets.

At the end of the document, brief every point and reinforce the significance of that particular project in achieving the desired goals.

These are all the aspects you should cover in the justification document. Understand that obtaining the approvals depends on how well you have crafted this document. So, review and revise it multiple times to ensure clarity and coherence.

Steps capture how business justification is determined

I have explained all the aspects you should include in your business justification document. Now, the question that often comes is what hierarchy to follow. Here are the steps that you can follow to make the right decisions.

Step 1 : You should start by defining the project objectives and specific goals. Make sure it aligns with the overall business goals.
Step 2 : Conduct a fair market analysis and learn about the latest trends to determine whether the project aligns with company goals.
Step 3: In this step, you should determine how the project will contribute to achieving or aligning with the long-term organization’s vision.
Step 4: Evaluate the alternatives and dig deeper to learn the pros and cons of each option. It will help justify the approach you chose.
Step 5: Check the financial details to calculate the expected ROI and see if it will help recoup the initial investment. The primary purpose of every project is to get monetary gains, so you should be aware of the finances before approving a project.
Step 6 : There are risks involved in every project. So, in this step, you should do a risk assessment analysis. Once you know the potential risks, you will write an effective risk mitigation strategy.
Step 7 : Write the legal compliance or regulations involved in the project. It is crucial as many projects get rejected due to a mismatch in the legal requirements.
Step 8 : Lastly, write the conclusion of your justification document. It is just the final word about all the analysis you have done.

In every business justification example, you will find the experts following this same step-by-step process.

Tools and Resources for Business Justification

As business justification is of utmost significance, there is no scope for making errors. That is also why various companies look for certified professionals or conduct KnowledgeHut’s Project Management training sessions to make their employees skilled enough for the job. In this process, you will find multiple tools and resources that might prove helpful. Let me list a few for you.

Project Management Software: Business justification is a crucial part of project management. So, you would certainly require platforms like Microsoft Project, Asana, or Jira that let you plan, track, and manage project timelines, milestones, and resources.
Financial Modeling Software: Project selection decisions require a lot of financial analysis. You may use tools like Tableau, Power BI, and more, which are reliable financial modeling software. These tools multiply the accuracy of results and provide data on which you can rely for decision-making.
Collaboration Tools: These tools are essential to facilitate communication and collaboration between the project stakeholders. Effective communication is helpful in making well-informed decisions, and the tools that help you in the process are Slack, Microsoft Teams, Trello, and the list is never-ending.
Project Justification Templates: Having a pre-designed template is like checking the example of justification in the business plan. You can find the templates in tools like Google Docs, which typically include all the sections of a justification document I have listed above.

Apart from these tools, there are certification programs and training that prepare you for fair justification and project selection.

The success of a business depends a lot on the kind of projects it takes up. From all the options a company obtains, it is crucial to research and pick the project that aligns with the vision and strategic goals. So, business justification plays an integral part in the process of choosing a project. Companies hire experts who dig deeper and research every possible aspect of the project to ensure it will be a win-win situation for the business. They research the financial details, identify potential risks, check market trends, and use all this information to propose which project they think should get approval and why. If their justification is fair, the project goes into the execution stage! Understand that the primary purpose is to inch closer to the desired goals and ensure optimum use of every resource.

Kevin D.Davis

Kevin D. Davis is a seasoned and results-driven Program/Project Management Professional with a Master's Certificate in Advanced Project Management. With expertise in leading multi-million dollar projects, strategic planning, and sales operations, Kevin excels in maximizing solutions and building business cases. He possesses a deep understanding of methodologies such as PMBOK, Lean Six Sigma, and TQM to achieve business/technology alignment. With over 100 instructional training sessions and extensive experience as a PMP Exam Prep Instructor at KnowledgeHut, Kevin has a proven track record in project management training and consulting. His expertise has helped in driving successful project outcomes and fostering organizational growth.

Avail your free 1:1 mentorship session.

Something went wrong

Upcoming Project Management Batches & Dates

Name	Date	Fee	Know more

Free! 5-Day Challenge - Find & Validate Your Ecommerce Idea!

Skip to primary navigation
Skip to main content

A magazine for young entrepreneurs

The best advice in entrepreneurship

Subscribe for exclusive access, how to write a business plan (tips, templates, examples).

Written by Jesse Sumrak | May 14, 2023

Comments -->

Get real-time frameworks, tools, and inspiration to start and build your business. Subscribe here

Business plans might seem like an old-school stiff-collared practice, but they deserve a place in the startup realm, too. It’s probably not going to be the frame-worthy document you hang in the office—yet, it may one day be deserving of the privilege.

Whether you’re looking to win the heart of an angel investor or convince a bank to lend you money, you’ll need a business plan. And not just any ol’ notes and scribble on the back of a pizza box or napkin—you’ll need a professional, standardized report.

Bah. Sounds like homework, right?

Yes. Yes, it does.

However, just like bookkeeping, loan applications, and 404 redirects, business plans are an essential step in cementing your business foundation.

Don’t worry. We’ll show you how to write a business plan without boring you to tears. We’ve jam-packed this article with all the business plan examples, templates, and tips you need to take your non-existent proposal from concept to completion.

Table of Contents

What Is a Business Plan?

Tips to Make Your Small Business Plan Ironclad

How to Write a Business Plan in 6 Steps

Startup Business Plan Template

Business Plan Examples

Work on Making Your Business Plan

How to Write a Business Plan FAQs

What is a business plan why do you desperately need one.

A business plan is a roadmap that outlines:

Who your business is, what it does, and who it serves
Where your business is now
Where you want it to go
How you’re going to make it happen
What might stop you from taking your business from Point A to Point B
How you’ll overcome the predicted obstacles

While it’s not required when starting a business, having a business plan is helpful for a few reasons:

Secure a Bank Loan: Before approving you for a business loan, banks will want to see that your business is legitimate and can repay the loan. They want to know how you’re going to use the loan and how you’ll make monthly payments on your debt. Lenders want to see a sound business strategy that doesn’t end in loan default.
Win Over Investors: Like lenders, investors want to know they’re going to make a return on their investment. They need to see your business plan to have the confidence to hand you money.
Stay Focused: It’s easy to get lost chasing the next big thing. Your business plan keeps you on track and focused on the big picture. Your business plan can prevent you from wasting time and resources on something that isn’t aligned with your business goals.

Beyond the reasoning, let’s look at what the data says:

Simply writing a business plan can boost your average annual growth by 30%
Entrepreneurs who create a formal business plan are 16% more likely to succeed than those who don’t
A study looking at 65 fast-growth companies found that 71% had small business plans
The process and output of creating a business plan have shown to improve business performance

Convinced yet? If those numbers and reasons don’t have you scrambling for pen and paper, who knows what will.

Don’t Skip: Business Startup Costs Checklist

Before we get into the nitty-gritty steps of how to write a business plan, let’s look at some high-level tips to get you started in the right direction:

Be Professional and Legit

You might be tempted to get cutesy or revolutionary with your business plan—resist the urge. While you should let your brand and creativity shine with everything you produce, business plans fall more into the realm of professional documents.

Think of your business plan the same way as your terms and conditions, employee contracts, or financial statements. You want your plan to be as uniform as possible so investors, lenders, partners, and prospective employees can find the information they need to make important decisions.

If you want to create a fun summary business plan for internal consumption, then, by all means, go right ahead. However, for the purpose of writing this external-facing document, keep it legit.

Know Your Audience

Your official business plan document is for lenders, investors, partners, and big-time prospective employees. Keep these names and faces in your mind as you draft your plan.

Think about what they might be interested in seeing, what questions they’ll ask, and what might convince (or scare) them. Cut the jargon and tailor your language so these individuals can understand.

Remember, these are busy people. They’re likely looking at hundreds of applicants and startup investments every month. Keep your business plan succinct and to the point. Include the most pertinent information and omit the sections that won’t impact their decision-making.

Invest Time Researching

You might not have answers to all the sections you should include in your business plan. Don’t skip over these!

Your audience will want:

Detailed information about your customers
Numbers and solid math to back up your financial claims and estimates
Deep insights about your competitors and potential threats
Data to support market opportunities and strategy

Your answers can’t be hypothetical or opinionated. You need research to back up your claims. If you don’t have that data yet, then invest time and money in collecting it. That information isn’t just critical for your business plan—it’s essential for owning, operating, and growing your company.

Stay Realistic

Your business may be ambitious, but reign in the enthusiasm just a teeny-tiny bit. The last thing you want to do is have an angel investor call BS and say “I’m out” before even giving you a chance.

The folks looking at your business and evaluating your plan have been around the block—they know a thing or two about fact and fiction. Your plan should be a blueprint for success. It should be the step-by-step roadmap for how you’re going from Point A to Point B.

Button to visit the free training for starting a side hustle

How to Write a Business Plan—6 Essential Elements

Not every business plan looks the same, but most share a few common elements. Here’s what they typically include:

Executive Summary
Business Overview
Products and Services
Market Analysis
Competitive Analysis
Financial Strategy

Below, we’ll break down each of these sections in more detail.

1. Executive Summary

While your executive summary is the first page of your business plan, it’s the section you’ll write last. That’s because it summarizes your entire business plan into a succinct one-pager.

Begin with an executive summary that introduces the reader to your business and gives them an overview of what’s inside the business plan.

Your executive summary highlights key points of your plan. Consider this your elevator pitch. You want to put all your juiciest strengths and opportunities strategically in this section.

2. Business Overview

In this section, you can dive deeper into the elements of your business, including answering:

What’s your business structure? Sole proprietorship, LLC, corporation, etc.
Where is it located?
Who owns the business? Does it have employees?
What problem does it solve, and how?
What’s your mission statement? Your mission statement briefly describes why you are in business. To write a proper mission statement, brainstorm your business’s core values and who you serve.

Don’t overlook your mission statement. This powerful sentence or paragraph could be the inspiration that drives an investor to take an interest in your business. Here are a few examples of powerful mission statements that just might give you the goosebumps:

Patagonia: Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.
Tesla: To accelerate the world’s transition to sustainable energy.
InvisionApp : Question Assumptions. Think Deeply. Iterate as a Lifestyle. Details, Details. Design is Everywhere. Integrity.
TED : Spread ideas.
Warby Parker : To offer designer eyewear at a revolutionary price while leading the way for socially conscious businesses.

3. Products and Services

As the owner, you know your business and the industry inside and out. However, whoever’s reading your document might not. You’re going to need to break down your products and services in minute detail.

For example, if you own a SaaS business, you’re going to need to explain how this business model works and what you’re selling.

You’ll need to include:

What services you sell: Describe the services you provide and how these will help your target audience.
What products you sell: Describe your products (and types if applicable) and how they will solve a need for your target and provide value.
How much you charge: If you’re selling services, will you charge hourly, per project, retainer, or a mixture of all of these? If you’re selling products, what are the price ranges?

4. Market Analysis

Your market analysis essentially explains how your products and services address customer concerns and pain points. This section will include research and data on the state and direction of your industry and target market.

This research should reveal lucrative opportunities and how your business is uniquely positioned to seize the advantage. You’ll also want to touch on your marketing strategy and how it will (or does) work for your audience.

Include a detailed analysis of your target customers. This describes the people you serve and sell your product to. Be careful not to go too broad here—you don’t want to fall into the common entrepreneurial trap of trying to sell to everyone and thereby not differentiating yourself enough to survive the competition.

The market analysis section will include your unique value proposition. Your unique value proposition (UVP) is the thing that makes you stand out from your competitors. This is your key to success.

If you don’t have a UVP, you don’t have a way to take on competitors who are already in this space. Here’s an example of an ecommerce internet business plan outlining their competitive edge:

FireStarters’ competitive advantage is offering product lines that make a statement but won’t leave you broke. The major brands are expensive and not distinctive enough to satisfy the changing taste of our target customers. FireStarters offers products that are just ahead of the curve and so affordable that our customers will return to the website often to check out what’s new.

5. Competitive Analysis

Your competitive analysis examines the strengths and weaknesses of competing businesses in your market or industry. This will include direct and indirect competitors. It can also include threats and opportunities, like economic concerns or legal restraints.

The best way to sum up this section is with a classic SWOT analysis. This will explain your company’s position in relation to your competitors.

6. Financial Strategy

Your financial strategy will sum up your revenue, expenses, profit (or loss), and financial plan for the future. It’ll explain how you make money, where your cash flow goes, and how you’ll become profitable or stay profitable.

This is one of the most important sections for lenders and investors. Have you ever watched Shark Tank? They always ask about the company’s financial situation. How has it performed in the past? What’s the ongoing outlook moving forward? How does the business plan to make it happen?

Answer all of these questions in your financial strategy so that your audience doesn’t have to ask. Go ahead and include forecasts and graphs in your plan, too:

Balance sheet: This includes your assets, liabilities, and equity.
Profit & Loss (P&L) statement: This details your income and expenses over a given period.
Cash flow statement: Similar to the P&L, this one will show all cash flowing into and out of the business each month.

It takes cash to change the world—lenders and investors get it. If you’re short on funding, explain how much money you’ll need and how you’ll use the capital. Where are you looking for financing? Are you looking to take out a business loan, or would you rather trade equity for capital instead?

Read More: 16 Financial Concepts Every Entrepreneur Needs to Know

Startup Business Plan Template (Copy/Paste Outline)

Ready to write your own business plan? Copy/paste the startup business plan template below and fill in the blanks.

Executive Summary Remember, do this last. Summarize who you are and your business plan in one page.

Business Overview Describe your business. What’s it do? Who owns it? How’s it structured? What’s the mission statement?

Products and Services Detail the products and services you offer. How do they work? What do you charge?

Market Analysis Write about the state of the market and opportunities. Use date. Describe your customers. Include your UVP.

Competitive Analysis Outline the competitors in your market and industry. Include threats and opportunities. Add a SWOT analysis of your business.

Financial Strategy Sum up your revenue, expenses, profit (or loss), and financial plan for the future. If you’re applying for a loan, include how you’ll use the funding to progress the business.

What’s the Best Business Plan to Succeed as a Consultant?

5 Frame-Worthy Business Plan Examples

Want to explore other templates and examples? We got you covered. Check out these 5 business plan examples you can use as inspiration when writing your plan:

SBA Wooden Grain Toy Company
SBA We Can Do It Consulting
OrcaSmart Business Plan Sample
Plum Business Plan Template
PandaDoc Free Business Plan Templates

Get to Work on Making Your Business Plan

If you find you’re getting stuck on perfecting your document, opt for a simple one-page business plan —and then get to work. You can always polish up your official plan later as you learn more about your business and the industry.

Remember, business plans are not a requirement for starting a business—they’re only truly essential if a bank or investor is asking for it.

Ask others to review your business plan. Get feedback from other startups and successful business owners. They’ll likely be able to see holes in your planning or undetected opportunities—just make sure these individuals aren’t your competitors (or potential competitors).

Your business plan isn’t a one-and-done report—it’s a living, breathing document. You’ll make changes to it as you grow and evolve. When the market or your customers change, your plan will need to change to adapt.

That means when you’re finished with this exercise, it’s not time to print your plan out and stuff it in a file cabinet somewhere. No, it should sit on your desk as a day-to-day reference. Use it (and update it) as you make decisions about your product, customers, and financial plan.

Review your business plan frequently, update it routinely, and follow the path you’ve developed to the future you’re building.

Keep Learning: New Product Development Process in 8 Easy Steps

What financial information should be included in a business plan?

Be as detailed as you can without assuming too much. For example, include your expected revenue, expenses, profit, and growth for the future.

What are some common mistakes to avoid when writing a business plan?

The most common mistake is turning your business plan into a textbook. A business plan is an internal guide and an external pitching tool. Cut the fat and only include the most relevant information to start and run your business.

Who should review my business plan before I submit it?

Co-founders, investors, or a board of advisors. Otherwise, reach out to a trusted mentor, your local chamber of commerce, or someone you know that runs a business.

Ready to Write Your Business Plan?

Don’t let creating a business plan hold you back from starting your business. Writing documents might not be your thing—that doesn’t mean your business is a bad idea.

Let us help you get started.

Join our free training to learn how to start an online side hustle in 30 days or less. We’ll provide you with a proven roadmap for how to find, validate, and pursue a profitable business idea (even if you have zero entrepreneurial experience).

Stuck on the ideas part? No problem. When you attend the masterclass, we’ll send you a free ebook with 100 of the hottest side hustle trends right now. It’s chock full of brilliant business ideas to get you up and running in the right direction.

About Jesse Sumrak

Jesse Sumrak is a writing zealot focused on creating killer content. He’s spent almost a decade writing about startup, marketing, and entrepreneurship topics, having built and sold his own post-apocalyptic fitness bootstrapped business. A writer by day and a peak bagger by night (and early early morning), you can usually find Jesse preparing for the apocalypse on a precipitous peak somewhere in the Rocky Mountains of Colorado.

Customer Engagement: The Secret to Long-Term Success

Giveaway Ideas: 4 Tried and Tested Approaches from a 7-Figure Ecommerce Expert

How to List Products on Amazon: Everything You Need to Know

Is Selling On Amazon Worth it? Get Your Questions Answered

Amazon FBA Fees: How to Calculate What FBA Will Cost You

The Complete Guide to Getting Clients for Your Consulting Business

What’s the Most Profitable Business to Start in 2024?

9 Best Businesses You Can Start with No Money

8 Businesses That Make Money Right Away (In 1-3 Months or Less)

How Much To Unapologetically Charge For Public Speaking

Write the Perfect Consulting Proposal: Tools, Examples, and a Template

How to Create an Online Course That Sells in 2024

I Used this Product Launch Checklist to Start 5 Ecom Brands

How to Get Sponsored: From 0 to $50,000 in 4 Weeks

How Shay Mitchell Is Disrupting a $17B Industry

FREE TRAINING FROM LEGIT FOUNDERS

Actionable Strategies for Starting & Growing Any Business.

Don't Miss Out! Register Free For The 5-Day Challenge.

5 Days. 7-Figure Founders LIVE.
Walk Away With A Winning Idea.

Book your demo

Please complete the form below and we will contact you to arrange a convenient time to show you how our software can help you.

Top business justification methods

This article discusses the best ways to help justify to your customer why they should be investing in your solution.

What is business justification and why is it important?

Business justification is presented in a business case and allows companies to assess the desirability, reasonableness and purposefulness of a future project or activity.

It is important to present business justification as it is important to give clear details based on facts for the reasons to go ahead with a project prior to the approval of the business case. A project should never go ahead before it has been justified to benefit the business. To ensure the best results of your project, it is also useful to conduct this justification process at different intervals during the project.

Top business justification methods:

In your business case, it is necessary to include all the basic and essential information, but how do you communicate and justify this in an effective way and make the idea stand out?

Use the right medium: After you have everything you need included in the business case, you need to present it in an interesting way. You may want to mix up the delivery method of your business case depending on who your audience is and what they will be most receptive to. Sometimes, a text-heavy document may not be appropriate for your audience or the stage that they are at in the sales cycle, so, you may want to try a slideshow with visuals such as graphs and animated infographics. You could even create a video to help convey your justification. Or, you could send a combination of all of these outputs to your customer!

Lead with the need: From the very beginning of trying to justify your project to stakeholders, immediately lead with the business need you are addressing. This will grab their attention and help them to understand your intentions straight away, without any confusion. If the need isn’t apparent, convincing, or clear from the beginning it may be difficult for you to get their support.

Create a story: You may feel that sticking to the facts and figures is the best way to justify and persuade your stakeholders, however, try including a human / emotive element too. This will help justify the need for the project for your business by helping to make the case more memorable. You could do this by including testimonials from actual customers or information about how the project will actually help employees.

Our business case software can help you to achieve all off the above in an easy-to-use and easy-to-understand way, contact us today to find out more.

Join our newsletter!

Almost finished....

We need to confirm your email address. To complete the subscription process, please click the link in the email we just sent you.

Features & benefits

Who's it for

For Pre-Sales
For Customer Success
For Marketing
What is value?
What is ROI?
Shark vs Excel™
Customer Stories
Feature guides
Latest updates
Financial terms
Trade terms

Proposal Template AI

Free proposal templates in word, powerpoint, pdf and more

Writing the Project Justification section in a Proposal Template

The project justification section in a proposal template is a crucial piece of information that outlines the reasons why a project is necessary and why it should be undertaken. This section helps the proposal reader understand the significance of the project and its potential impact. In this article, we will discuss how to write an effective project justification section, common FAQs, and advice for end users.

How to Write Project Justification

1. clearly define the problem.

Begin by clearly defining the problem or need that the project aims to address. Include relevant data, statistics, or evidence to support the existence and significance of the problem.

2. Explain the Project’s Objectives

Describe the specific objectives of the project and how they align with addressing the identified problem. Clearly articulate what the project aims to achieve and the desired outcomes.

3. Highlight the Benefits

Articulate the potential benefits or impacts of the project. This could include social, economic, environmental, or other relevant benefits. Provide a compelling argument for why the project is necessary.

4. Justify the Resources

Explain why the resources being requested for the project are justified. This could include financial resources, manpower, time, or any other necessary resources.

5. Address the Risks

Acknowledge any potential risks or challenges associated with the project and provide a plan for mitigating these risks. This demonstrates a thoughtful and comprehensive approach to the project.

6. Align with Organizational Goals

If applicable, demonstrate how the project aligns with the goals and objectives of the organization or funding body.

1. What type of proposals use project justification sections?

Project justification sections are commonly found in grant proposals, research proposals , business project proposals , and other types of project-based proposals.

2. What should the tone of the project justification section be?

The tone of the project justification section should be factual and persuasive. It should present a compelling argument for why the project is necessary and valuable.

3. How long should the project justification section be?

The length of the project justification section may vary depending on the specific requirements of the proposal template or the funding body. However, it is important to be concise while still providing sufficient detail to support the project’s case.

Advice for End Users

Use clear and straightforward language to present your justification.
Back up your claims with data, evidence, and examples.
Tailor the project justification to the specific requirements of the proposal template or funding body.
Be persuasive and compelling in your argument for why the project should be undertaken.

In conclusion, the project justification section in a proposal template plays a critical role in making a compelling case for the necessity and significance of a project. By clearly defining the problem, outlining the objectives, highlighting the benefits, justifying resources, addressing risks, and aligning with organizational goals, a well-written project justification section can greatly enhance the chances of a proposal’s success.

Remember to always tailor the project justification to the specific requirements of the proposal template and to be concise yet comprehensive in your presentation of the project’s case. With careful attention to detail and a persuasive argument, your project justification can significantly strengthen your proposal.

Simple Project Proposal Template: A Comprehensive…
Project Proposal Template: A Comprehensive Guide +…
Software Project Proposal Template: A Comprehensive…
Inion Technology Project Proposal Template: A…
Internship Project Proposal Template: A…
Community Project Proposal Template: A Comprehensive…
School Project Proposal Template: A Comprehensive…
Final Year Project Proposal Template: A…

Contact sales

Start free trial

How to Write a Business Case (Template Included)

What is a business case, business case template, how to write a business case, key elements of a business case, how projectmanager helps with your business case, watch our business case training video.

A business case is a project management document that explains how the benefits of a project overweigh its costs and why it should be executed. Business cases are prepared during the project initiation phase and their purpose is to include all the project’s objectives, costs and benefits to convince stakeholders of its value.

A business case is an important project document to prove to your client, customer or stakeholder that the project proposal you’re pitching is a sound investment. Below, we illustrate the steps to writing one that will sway them.

The need for a business case is that it collects the financial appraisal, proposal, strategy and marketing plan in one document and offers a full look at how the project will benefit the organization. Once your business case is approved by the project stakeholders, you can begin the project planning phase.

Our business case template for Word is the perfect tool to start writing a business case. It has 9 key business case areas you can customize as needed. Download the template for free and follow the steps below to create a great business case for all your projects.

Projects fail without having a solid business case to rest on, as this project document is the base for the project charter and project plan. But if a project business case is not anchored to reality, and doesn’t address a need that aligns with the larger business objectives of the organization, then it is irrelevant.

The research you’ll need to create a strong business case is the why, what, how and who of your project. This must be clearly communicated. The elements of your business case will address the why but in greater detail. Think of the business case as a document that is created during the project initiation phase but will be used as a reference throughout the project life cycle.

Whether you’re starting a new project or mid-way through one, take time to write up a business case to justify the project expenditure by identifying the business benefits your project will deliver and that your stakeholders are most interested in reaping from the work. The following four steps will show you how to write a business case.

Step 1: Identify the Business Problem

Projects aren’t created for projects’ sake. They should always be aligned with business goals . Usually, they’re initiated to solve a specific business problem or create a business opportunity.

You should “Lead with the need.” Your first job is to figure out what that problem or opportunity is, describe it, find out where it comes from and then address the time frame needed to deal with it.

This can be a simple statement but is best articulated with some research into the economic climate and the competitive landscape to justify the timing of the project.

Step 2: Identify the Alternative Solutions

How do you know whether the project you’re undertaking is the best possible solution to the problem defined above? Naturally, prioritizing projects is hard, and the path to success is not paved with unfounded assumptions.

One way to narrow down the focus to make the right solution clear is to follow these six steps (after the relevant research, of course):

Note the alternative solutions.
For each solution, quantify its benefits.
Also, forecast the costs involved in each solution.
Then figure out its feasibility .
Discern the risks and issues associated with each solution.
Finally, document all this in your business case.

Get your free

Use this free Business Case Template for Word to manage your projects better.

Step 3: Recommend a Preferred Solution

You’ll next need to rank the solutions, but before doing that it’s best to set up criteria, maybe have a scoring mechanism such as a decision matrix to help you prioritize the solutions to best choose the right one.

Some methodologies you can apply include:

Depending on the solution’s cost and benefit , give it a score of 1-10.
Base your score on what’s important to you.
Add more complexity to your ranking to cover all bases.

Regardless of your approach, once you’ve added up your numbers, the best solution to your problem will become evident. Again, you’ll want to have this process also documented in your business case.

Step 4: Describe the Implementation Approach

So, you’ve identified your business problem or opportunity and how to reach it, now you have to convince your stakeholders that you’re right and have the best way to implement a process to achieve your goals. That’s why documentation is so important; it offers a practical path to solve the core problem you identified.

Now, it’s not just an exercise to appease senior leadership. Who knows what you might uncover in the research you put into exploring the underlying problem and determining alternative solutions? You might save the organization millions with an alternate solution than the one initially proposed. When you put in the work on a strong business case, you’re able to get your sponsors or organizational leadership on board with you and have a clear vision as to how to ensure the delivery of the business benefits they expect.

One of the key steps to starting a business case is to have a business case checklist. The following is a detailed outline to follow when developing your business case. You can choose which of these elements are the most relevant to your project stakeholders and add them to our business case template. Then once your business case is approved, start managing your projects with a robust project management software such as ProjectManager.

1. Executive Summary

The executive summary is a short version of each section of your business case. It’s used to give stakeholders a quick overview of your project.

2. Project Definition

This section is meant to provide general information about your projects, such as the business objectives that will be achieved and the project plan outline.

3. Vision, Goals and Objectives

First, you have to figure out what you’re trying to do and what is the problem you want to solve. You’ll need to define your project vision, goals and objectives. This will help you shape your project scope and identify project deliverables.

4. Project Scope

The project scope determines all the tasks and deliverables that will be executed in your project to reach your business objectives.

5. Background Information

Here you can provide a context for your project, explaining the problem that it’s meant to solve, and how it aligns with your organization’s vision and strategic plan.

6. Success Criteria and Stakeholder Requirements

Depending on what kind of project you’re working on, the quality requirements will differ, but they are critical to the project’s success. Collect all of them, figure out what determines if you’ve successfully met them and report on the results .

7. Project Plan

It’s time to create the project plan. Figure out the tasks you’ll have to take to get the project done. You can use a work breakdown structure template to make sure you are through. Once you have all the tasks collected, estimate how long it will take to complete each one.

Project management software makes creating a project plan significantly easier. ProjectManager can upload your work breakdown structure template and all your tasks are populated in our tool. You can organize them according to your production cycle with our kanban board view, or use our Gantt chart view to create a project schedule.

kanban card moving into next column on the board

8. Project Budget

Your budget is an estimate of everything in your project plan and what it will cost to complete the project over the scheduled time allotted.

9. Project Schedule

Make a timeline for the project by estimating how long it will take to get each task completed. For a more impactful project schedule , use a tool to make a Gantt chart, and print it out. This will provide that extra flourish of data visualization and skill that Excel sheets lack.

10. Project Governance

Project governance refers to all the project management rules and procedures that apply to your project. For example, it defines the roles and responsibilities of the project team members and the framework for decision-making.

11. Communication Plan

Have milestones for check-ins and status updates, as well as determine how stakeholders will stay aware of the progress over the project life cycle.

12. Progress Reports

Have a plan in place to monitor and track your progress during the project to compare planned to actual progress. There are project tracking tools that can help you monitor progress and performance.

Again, using a project management tool improves your ability to see what’s happening in your project. ProjectManager has tracking tools like dashboards and status reports that give you a high-level view and more detail, respectively. Unlike light-weight apps that make you set up a dashboard, ours is embedded in the tool. Better still, our cloud-based software gives you real-time data for more insightful decision-making. Also, get reports on more than just status updates, but timesheets, workload, portfolio status and much more, all with just one click. Then filter the reports and share them with stakeholders to keep them updated.

ProjectManager’s dashboard view, which shows six key metrics on a project

13. Financial Appraisal

This is a very important section of your business case because this is where you explain how the financial benefits outweigh the project costs . Compare the financial costs and benefits of your project. You can do this by doing a sensitivity analysis and a cost-benefit analysis.

14. Market Assessment

Research your market, competitors and industry, to find opportunities and threats

15. Competitor Analysis

Identify direct and indirect competitors and do an assessment of their products, strengths, competitive advantages and their business strategy.

16. SWOT Analysis

A SWOT analysis helps you identify your organization’s strengths, weaknesses, opportunities and threats. The strengths and weaknesses are internal, while the opportunities and threats are external.

17. Marketing Strategy

Describe your product, distribution channels, pricing, target customers among other aspects of your marketing plan or strategy.

18. Risk Assessment

There are many risk categories that can impact your project. The first step to mitigating them is to identify and analyze the risks associated with your project activities.

ProjectManager , an award-winning project management software, can collect and assemble all the various data you’ll be collecting, and then easily share it both with your team and project sponsors.

Once you have a spreadsheet with all your tasks listed, you can import it into our software. Then it’s instantly populated into a Gantt chart . Simply set the duration for each of the tasks, add any dependencies, and your project is now spread across a timeline. You can set milestones, but there is so much more you can do.

You have a project plan now, and from the online Gantt chart, you can assign team members to tasks. Then they can comment directly on the tasks they’re working on, adding as many documents and images as needed, fostering a collaborative environment. You can track their progress and change task durations as needed by dragging and dropping the start and end dates.

But that’s only a taste of what ProjectManager offers. We have kanban boards that visualize your workflow and a real-time dashboard that tracks six project metrics for the most accurate view of your project possible.

Try ProjectManager and see for yourself with this 30-day free trial .

If you want more business case advice, take a moment to watch Jennifer Bridges, PMP, in this short training video. She explains the steps you have to take in order to write a good business case.

Here’s a screenshot for your reference.

how writing a business case for your project is good business strategy

Transcription:

Today we’re talking about how to write a business case. Well, over the past few years, we’ve seen the market, or maybe organizations, companies or even projects, move away from doing business cases. But, these days, companies, organizations, and those same projects are scrutinizing the investments and they’re really seeking a rate of return.

So now, think of the business case as your opportunity to package your project, your idea, your opportunity, and show what it means and what the benefits are and how other people can benefit.

We want to take a look today to see what’s in the business case and how to write one. I want to be clear that when you look for information on a business case, it’s not a briefcase.

Someone called the other day and they were confused because they were looking for something, and they kept pulling up briefcases. That’s not what we’re talking about today. What we’re talking about are business cases, and they include information about your strategies, about your goals. It is your business proposal. It has your business outline, your business strategy, and even your marketing plan.

Why Do You Need a Business Case?

And so, why is that so important today? Again, companies are seeking not only their project managers but their team members to have a better understanding of business and more of an idea business acumen. So this business case provides the justification for the proposed business change or plan. It outlines the allocation of capital that you may be seeking and the resources required to implement it. Then, it can be an action plan . It may just serve as a unified vision. And then it also provides the decision-makers with different options.

So let’s look more at the steps required to put these business cases together. There are four main steps. One, you want to research your market. Really look at what’s out there, where are the needs, where are the gaps that you can serve? Look at your competition. How are they approaching this, and how can you maybe provide some other alternatives?

You want to compare and finalize different approaches that you can use to go to market. Then you compile that data and you present strategies, your goals and other options to be considered.

And then you literally document it.

So what does the document look like? Well, there are templates out there today. The components vary, but these are the common ones. And then these are what I consider essential. So there’s the executive summary. This is just a summary of your company, what your management team may look like, a summary of your product and service and your market.

The business description gives a little bit more history about your company and the mission statement and really what your company is about and how this product or service fits in.

Then, you outline the details of the product or service that you’re looking to either expand or roll out or implement. You may even include in their patents may be that you have pending or other trademarks.

Then, you want to identify and lay out your marketing strategy. Like, how are you gonna take this to your customers? Are you going to have a brick-and-mortar store? Are you gonna do this online? And, what are your plans to take it to market?

You also want to include detailed information about your competitor analysis. How are they doing things? And, how are you planning on, I guess, beating your competition?

You also want to look at and identify your SWOT. And the SWOT is your strength. What are the strengths that you have in going to market? And where are the weaknesses? Maybe some of your gaps. And further, where are your opportunities and maybe threats that you need to plan for? Then the overview of the operation includes operational information like your production, even human resources, information about the day-to-day operations of your company.

And then, your financial plan includes your profit statement, your profit and loss, any of your financials, any collateral that you may have, and any kind of investments that you may be seeking.

So these are the components of your business case. This is why it’s so important. And if you need a tool that can help you manage and track this process, then sign up for our software now at ProjectManager .

Click here to browse ProjectManager's free templates

Deliver your projects on time and on budget

Start planning your projects.

How Do You Write A Business Justification?

Writing a business justification or argument is one of the most important tasks an employee in your organization can do, especially if they are trying to get a significant increase in pay or a higher position.

As a manager, you will be doing this for many things; sometimes it’s for raising your own salary, sometimes it’s for giving someone else a raise, and occasionally it’s just because you want something like a new computer or office supplies.

It doesn’t matter what the reason is, however, writing a business justification or argument is always the same thing: you are arguing why your option is best.

You will probably be given limited time to write yours, so you need to make sure that yours is strong and clearly stated.

Create the topic

how do you write a business justification

Writing a business justification or argument typically starts with creating a new topic. Yours can be to find a new job, increase your pay, get additional benefits, start or improve a career, or all of the above!

Your potential reader will know what they want to read next once you’ve established that initial topic. Make sure to use appropriate vocabulary and emphasize the importance of the topic as you develop it.

Keep it natural and simple — no need to dive into complex jargon unless you have proofread your content several times.

And remember, even if this is an internal memo to yourself, your audience may not agree! Keep things civil and professional; sometimes people have very different opinions.

General tips for writing effective arguments

The word “argument” implies two opposing points of view so make sure your message has solid supporting evidence.

Avoid using anecdotal stories or experiences unless they are backed up by data. Use statistics and examples instead to prove your point.

Using too many negatives can weaken your argument. If necessary, include the opposite side of the equation but focus more on why your proposal makes sense rather than why it won’t work.

Don’t assume anything about your opponents – try to think like them and consider their angles as well. Being aware of the other person’s position will help clarify the best approach in negating theirs.

Take time to review your draft before submitting.

Develop your topic

Writing a business justification is very different from writing an introduction or a paragraph that does not have a bullet point. When writing a business justification, you need to make sure your argument is logical and clear.

You do not simply state your goal, followed by why it is important and then check the box saying “necessary” because that sounds fake. A good business justification must be logically persuasive – it must use logic to prove its case.

So how do you write a business justification? By developing your topic first!

The more prepared you are, the better! Before starting to draft, you should know what arguments you will use to support your goal. This gives you some basic framework for organizing your thoughts.

Once you have this frame, you can start forming ideas and concepts about your topic. Start with something simple like “ why we should launch our product today�” and work backwards towards creating a longer explanation.

This way you will connect each idea to the next and form a coherent narrative flow. Make sure to include examples and information to back up these reasons.

After all, no one wants to read through pages of jargon and assumptions! So, be careful to include enough details to convince others of your points.

Brainstorm a list of topics

Writing a business justification is one of the most important tasks an employee in your organization can do. If you’re ever asked to produce one, you need to be familiar with it!

Writing a business justification is like writing any other type of essay. A good business justification uses arguments and examples to prove its point. It may also include questions that explore potential outcomes of making or not making the recommendation.

The difference is that a business justification makes a claim about something (or someone) within your department or company. This could be recommending an internal process be changed, proposing new people be hired, or asking for a pay increase.

Narrow down your topic

Writing a business justification or argument typically starts with defining your topic, which is how you start writing your paragraph. Yours will likely be related to either an asking question or providing information to someone.

Your audience should know what you are talking about before you talk about it. Make sure your introduction sets up the topic clearly!

Avoid using jargon in your introductions unless you really mean it and believe in it strongly. This way your audience knows what you are talking about and can get the rest of the info from other sources if they want it.

If there’s something you're particularly passionate about, include that in your intro. It'll help boost reader engagement and interest.

Write your initial draft

Even if you have a solid business idea that has been working for you, writing a business justification is still an exercise in creativity and restructuring of ideas.

This article will help you take all of those good parts of your current business model and rebrand them as what your new business should be!

Your old business can become the foundation of your new one. Only then should you start thinking about what angle you want to bring into the new company.

What are we talking about? We’re talking about taking what you currently do well and developing it into a more advanced version of itself!

That’s what entrepreneurs do. They develop their current businesses into something bigger and better.

It’s why companies go through several transitions before finding their perfect fit.

Business justifications are a way to validate your need for change by comparing yourself to others doing similar things.

There are many ways to write a business justification, so pick one that works best for you and keep revising it until you feel it sounds believable.

Disclaimer: This article may contain links to sites where he/she receives compensation or commissions. These links will not affect our content, judgment, or recommendations. Clicking on these links will only serve to provide you further information regarding topics set forth here.

Edit your writing

Even though you may have spent time developing your career, including through additional education or training, there is always something new to learn. With technology moving at such a lightning speed, there are constantly updated tools and techniques professionals use to produce their work.

By adding some editing to your repertoire, you will ensure your business justifications are strong and effective.

Editorialists spend lots of time proofreading other people’s work so that they can find any mistakes and fix them. By doing the same for yourself, you will save yourself a lot of wasted effort later !

There are several ways to edit your own writing. You can do it as you put together your presentation, in advance, or you can do it while creating it. Either way, make sure you aren’t trying to cover up poor quality material with fancy decorations!

The first step towards great editorializing is to recognize when you have made an error. When you stumble upon one , take a moment to think about what you could have done better and then implement those changes into next time.

Create your website

Running a business means doing things! Starting your own business includes creating or updating your online presence to include a website, social media pages , and advertisements.

Having a website is a pretty important part of running a business these days. Websites are how most people find out about you and what you offer before they do business with you.

It’s also a way to keep in touch with customers who may want to return or purchase more products or services from you.

By having this web presence, you will be giving them a chance to read reviews, see pictures of what you produce, and learn some information about you as an entrepreneur.

It creates an opportunity for conversations that can help grow your business. If someone wants to buy something, they can go onto your site and look around until they find it.

Running a business doesn’t always mean being hands-on, but having this web presence makes it possible to stay in control without taking over everything. It helps maintain separation between you and your audience.

Promote your blog

Writing a business justification or argument is also known as writing an explanation. It’s usually to justify why something is necessary for success. For instance, if my company needs money to stay in business, then explaining how to earn money through blogging is a great way to advertise.

A good business justification makes the reader feel confident in the importance of what you are proposing.

About The Author

Featured Articles

Why Evergreen Content Should Be The Lifeblood Of Your Website

3 Reasons Why YOUR Business Can Always Benefit From Consistent SEO Practice

6 Tips For Developing a Proper Sales Funnel on Your Shopify Site

The Two Main Ways of Creating SEO Content

3 Incredible Ways to Identify Blog Growth using Google Analytics

How To Treat Your Winning SEO Articles

5 Ways to Get the Most ROI Out of Your SEO Content

What is SEO and How Can I Master it Quickly?

Get a free personalized marketing plan for your business.

Business Essentials
Leadership & Management
Credential of Leadership, Impact, and Management in Business (CLIMB)
Entrepreneurship & Innovation
Digital Transformation
Finance & Accounting
Business in Society
For Organizations
Support Portal
Media Coverage
Founding Donors
Leadership Team

Harvard Business School →
HBS Online →
Business Insights →

Business Insights

Harvard Business School Online's Business Insights Blog provides the career insights you need to achieve your goals and gain confidence in your business skills.

Career Development
Communication
Decision-Making
Earning Your MBA
Negotiation
News & Events
Productivity
Staff Spotlight
Student Profiles
Work-Life Balance
AI Essentials for Business
Alternative Investments
Business Analytics
Business Strategy
Business and Climate Change
Creating Brand Value
Design Thinking and Innovation
Digital Marketing Strategy
Disruptive Strategy
Economics for Managers
Entrepreneurship Essentials
Financial Accounting
Global Business
Launching Tech Ventures
Leadership Principles
Leadership, Ethics, and Corporate Accountability
Leading Change and Organizational Renewal
Leading with Finance
Management Essentials
Negotiation Mastery
Organizational Leadership
Power and Influence for Positive Impact
Strategy Execution
Sustainable Business Strategy
Sustainable Investing
Winning with Digital Platforms

How to Calculate ROI to Justify a Project

Business professional calculating return on investment

12 May 2020

Understanding how to calculate the potential return on investment (ROI) of a project is an essential financial skill for all professionals to develop.

If you’re an employee, knowing how to calculate ROI can help you make the case for a project you’re interested in pursuing and have taken the lead on proposing. If you’re a manager, understanding ROI can give you greater insight into your team's performance . If you’re an executive, working knowledge of ROI can make it easier for you to identify which projects should be greenlit and which should be passed over. Once ROI is proven, it may be possible to replicate success by applying lessons learned from the first project to other segments of the business.

If you’re unfamiliar with accounting and finance , the prospect of determining the ROI of a project may seem beyond your abilities. However, it’s not an overly complicated process. By understanding the basics of financial valuation, which can enable you to put a monetary value on companies, projects, or anything that produces cash flows, anyone can learn to calculate the ROI of a project.

Access your resource today.

What Is Return on Investment?

Return on investment (ROI) is a metric used to denote how much profit has been generated from an investment that’s been made. In the case of a business, return on investment comes in two primary forms, depending on when it’s calculated: anticipated ROI and actual ROI.

Anticipated vs. Actual ROI

Anticipated ROI , or expected ROI, is calculated before a project kicks off, and is often used to determine if that project makes sense to pursue. Anticipated ROI uses estimated costs, revenues, and other assumptions to determine how much profit a project is likely to generate.

Often, this figure will be run under a number of different scenarios to determine the range of possible outcomes. These numbers are then used to understand risk and, ultimately, decide whether an initiative should move forward.

Actual ROI is the true return on investment generated from a project. This number is typically calculated after a project has concluded, and uses final costs and revenues to determine how much profit a project produced compared to what was estimated.

Positive vs. Negative ROI

When a project yields a positive return on investment , it can be considered profitable, because it yielded more in revenue than it cost to pursue. If, on the other hand, the project yields a negative return on investment , it means the project cost more to pursue than it generated in revenue. If the project breaks even, then it means the total revenue generated by the project matched the expenses.

Return on Investment Formula

Return on investment is typically calculated by taking the actual or estimated income from a project and subtracting the actual or estimated costs. That number is the total profit that a project has generated, or is expected to generate. That number is then divided by the costs.

The formula for ROI is typically written as:

ROI = (Net Profit / Cost of Investment) x 100

In project management, the formula is written similarly, but with slightly different terms:

ROI = [(Financial Value - Project Cost) / Project Cost] x 100

Check out our video on return on investment below, and subscribe to our YouTube channel for more explainer content!

Calculating the ROI of a Project: An Example

Imagine that you have the opportunity to purchase 1,000 bars of chocolate for $2 apiece. You would then sell the chocolate to a grocery store for $3 per piece. In addition to the cost of purchasing the chocolate, you need to pay $100 in transportation costs.

To decide whether this would be profitable, you would first tally your total expenses and your total expected revenues.

Expected Revenues = 1,000 x $3 = $3,000

Total Expenses = (1,000 x $2) + $100 = $2,100

You would then subtract the expenses from your expected revenue to determine the net profit.

Net Profit = $3,000 - $2,100 = $900

To calculate the expected return on investment, you would divide the net profit by the cost of the investment, and multiply that number by 100.

ROI = ($900 / $2,100) x 100 = 42.9%

By running this calculation, you can see the project will yield a positive return on investment, so long as factors remain as predicted. Therefore, it’s a sound financial decision. If the endeavor yielded a negative ROI, or an ROI that was so low it didn’t justify the amount of work involved, you would know to avoid it moving forward.

It’s important to note that this example calculates an anticipated ROI for your project. If any of the factors affecting expenses or revenue were to change during implementation, your actual ROI could be different.

For example, imagine that you have already purchased your chocolate bars for the agreed-upon $2 apiece and paid $100 to transport them. If the most that the store will pay you is $2.25 per chocolate bar, then your actual revenues drop substantially compared to your projected revenues. The result is a reduced net profit and a reduced actual ROI.

Actual Revenues = 1,000 x $2.25 = $2,250

Net Profit = $2,250 - $2,100 = $150

ROI = ($150 / $2,100) x 100 = 7.14%

Circumstances are rarely as straightforward as this example. There are typically additional costs that should be accounted for, such as overhead and taxes. In addition, there’s always the possibility that an anticipated ROI will not be met due to unforeseen circumstances, but the same general principles hold true.

Financial Terms Cheat Sheet | Download the Free Resource

How to Use Finance to Pitch Your Project

Have you ever pitched a project to senior management, only to have the idea shot down under the guise of “not making financial sense?" It happens more often than you might think. By learning how to calculate ROI for projects you’re interested in pursuing, you can self-evaluate them before they're raised up to decision-makers within your organization and defend them as they’re being considered.

Similarly, by understanding how to calculate ROI after a project you’ve spearhead is done, you can better speak to the contributions that you and your team have made toward shared company goals.

High-performing businesses are successful because they make smart decisions about when and where they allocate available resources. Calculating the ROI of a project before it moves forward can help ensure that you’re making the best possible use of the resources you have available.

To learn more ways that you can use financial concepts to improve your efficacy and advance your career, explore our online finance and accounting courses and download our free flowchart to determine which is right for you. Do you want to build your financial fluency? Download our free Financial Terms Cheat Sheet .

About the Author

Newsletters
Best Industries
Business Plans
Home-Based Business
The UPS Store
Customer Service
Black in Business
Your Next Move
Female Founders
Best Workplaces
Company Culture
Public Speaking
HR/Benefits
Productivity
All the Hats
Digital Transformation
Artificial Intelligence
Bringing Innovation to Market
Cloud Computing
Social Media
Data Detectives
Exit Interview
Bootstrapping
Crowdfunding
Venture Capital
Business Models
Personal Finance
Founder-Friendly Investors
Upcoming Events
Inc. 5000 Vision Conference
Become a Sponsor
Cox Business
Verizon Business
Branded Content
Apply Inc. 5000 US

Inc. Premium

How to Write the Perfect Business Plan: A Comprehensive Guide

Thinking of starting a business here's the best step-by-step template for writing the perfect business plan when creating your startup..

Maybe you think you don't need a step-by-step guide to writing a great business plan . Maybe you think you don't need a template for writing a business plan. After all, some entrepreneurs succeed without writing a business plan. With great timing, solid business skills, entrepreneurial drive, and a little luck , some founders build thriving businesses without creating even an informal business plan .

But the odds are greater that those entrepreneurs will fail.

Does a business plan make startup success inevitable? Absolutely not. But great planning often means the difference between success and failure. Where your entrepreneurial dreams are concerned, you should do everything possible to set the stage for success.

And that's why a great business plan is one that helps you succeed .

The following is a comprehensive guide to creating a great business plan. We'll start with an overview of key concepts. Then we'll look at each section of a typical business plan:

Executive Summary

Overview and objectives, products and services, market opportunities, sales and marketing.

Competitive Analysis

Management Team

Financial analysis.

So first let's gain a little perspective on why you need a business plan.

Key Concepts

Many business plans are fantasies. That's because many aspiring entrepreneurs see a business plan as simply a tool--filled with strategies and projections and hyperbole--that will convince lenders or investors the business makes sense.

That's a huge mistake.

First and foremost, your business plan should convince you that your idea makes sense--because your time, your money, and your effort are on the line.

So a solid business plan should be a blueprint for a successful business . It should flesh out strategic plans, develop marketing and sales plans, create the foundation for smooth operations, and maybe--just maybe--persuade a lender or investor to jump on board.

For many entrepreneurs, developing a business plan is the first step in the process of deciding whether to actually start a business. Determining if an idea fails on paper can help a prospective founder avoid wasting time and money on a business with no realistic hope of success.

So, at a minimum, your plan should:

Be as objective and logical as possible. What may have seemed like a good idea for a business can, after some thought and analysis, prove not viable because of heavy competition, insufficient funding, or a nonexistent market. (Sometimes even the best ideas are simply ahead of their time.)
Serve as a guide to the business's operations for the first months and sometimes years, creating a blueprint for company leaders to follow.
Communicate the company's purpose and vision, describe management responsibilities, detail personnel requirements, provide an overview of marketing plans, and evaluate current and future competition in the marketplace.
Create the foundation of a financing proposal for investors and lenders to use to evaluate the company.

A good business plan delves into each of the above categories, but it should also accomplish other objectives. Most of all, a good business plan is convincing . It proves a case. It provides concrete, factual evidence showing your idea for a business is in fact sound and reasonable and has every chance of success.

Who must your business plan convince?

First and foremost, your business plan should convince you that your idea for a business is not just a dream but can be a viable reality. Entrepreneurs are by nature confident, positive, can-do people. After you objectively evaluate your capital needs, products or services, competition, marketing plans, and potential to make a profit, you'll have a much better grasp on your chances for success.

And if you're not convinced, fine: Take a step back and refine your ideas and your plans.

Who can your business plan convince?

1. Potential sources of financing. If you need seed money from a bank or friends and relatives, your business plan can help you make a great case. Financial statements can show where you have been. Financial projections describe where you plan to go.

Your business plan shows how you will get there. Lending naturally involves risk, and a great business plan can help lenders understand and quantity that risk, increasing your chances for approval.

2. Potential partners and investors. Where friends and family are concerned, sharing your business plan may not be necessary (although it certainly could help).

Other investors--including angel investors or venture capitalists--generally require a business plan in order to evaluate your business.

3. Skilled employees . When you need to attract talent, you need something to show prospective employees since you're still in the startup phase. Early on, your business is more of an idea than a reality, so your business plan can help prospective employees understand your goals--and, more important, their place in helping you achieve those goals.

4. Potential joint ventures. Joint ventures are like partnerships between two companies. A joint venture is a formal agreement to share the work--and share the revenue and profit. As a new company, you will likely be an unknown quantity in your market. Setting up a joint venture with an established partner could make all the difference in getting your business off the ground.

But above all, your business plan should convince you that it makes sense to move forward.

As you map out your plan, you may discover issues or challenges you had not anticipated.

Maybe the market isn't as large as you thought. Maybe, after evaluating the competition, you realize your plan to be the low-cost provider isn't feasible since the profit margins will be too low to cover your costs.

Or you might realize the fundamental idea for your business is sound, but how you implement that idea should change. Maybe establishing a storefront for your operation isn't as cost-effective as taking your products directly to customers--not only will your operating costs be lower, but you can charge a premium since you provide additional customer convenience.

Think of it this way. Successful businesses do not remain static. They learn from mistakes, and adapt and react to changes: changes in the economy, the marketplace, their customers, their products and services, etc. Successful businesses identify opportunities and challenges and react accordingly.

Creating a business plan lets you spot opportunities and challenges without risk. Use your plan to dip your toe in the business water. It's the perfect way to review and revise your ideas and concepts before you ever spend a penny.

Many people see writing a business plan as a "necessary evil" required to attract financing or investors. Instead, see your plan as a no-cost way to explore the viability of your potential business and avoid costly mistakes.

Now let's look at the first section of your business plan: The Executive Summary.

The Executive Summary is a brief outline of the company's purpose and goals. While it can be tough to fit on one or two pages, a good Summary includes:

A brief description of products and services
A summary of objectives
A solid description of the market
A high-level justification for viability (including a quick look at your competition and your competitive advantage)
A snapshot of growth potential
An overview of funding requirements

I know that seems like a lot, and that's why it's so important you get it right. The Executive Summary is often the make-or-break section of your business plan.

A great business solves customer problems. If your Summary cannot clearly describe, in one or two pages, how your business will solve a particular problem and make a profit, then it's very possible the opportunity does not exist--or your plan to take advantage of a genuine opportunity is not well developed.

So think of it as a snapshot of your business plan. Don't try to "hype" your business--focus on helping a busy reader get a great feel for what you plan to do, how you plan to do it, and how you will succeed.

Since a business plan should above all help you start and grow your business, your Executive Summary should first and foremost help you do the following.

1. Refine and tighten your concept.

Think of it as a written elevator pitch (with more detail, of course). Your Summary describes the highlights of your plan, includes only the most critical points, and leaves out less important issues and factors.

As you develop your Summary, you will naturally focus on the issues that contribute most to potential success. If your concept is too fuzzy, too broad, or too complicated, go back and start again. Most great businesses can be described in several sentences, not several pages.

2. Determine your priorities.

Your business plan walks the reader through your plan. What ranks high in terms of importance? Product development? Research? Acquiring the right location? Creating strategic partnerships?

Your Summary can serve as a guide to writing the rest of your plan.

3. Make the rest of the process easy.

Once your Summary is complete, you can use it as an outline for the rest of your plan. Simply flesh out the highlights with more detail.

Then work to accomplish your secondary objective by focusing on your readers. Even though you may be creating a business plan solely for your own purposes, at some point you may decide to seek financing or to bring on other investors, so make sure your Summary meets their needs as well. Work hard to set the stage for the rest of the plan. Let your excitement for your idea and your business shine through.

In short, make readers want to turn the page and keep reading. Just make sure your sizzle meets your steak by providing clear, factual descriptions.

How? The following is how an Executive Summary for a bicycle rental store might read.

Introduction

Blue Mountain Cycle Rentals will offer road and mountain bike rentals in a strategic location directly adjacent to an entrance to the George Washington National Forest. Our primary strategy is to develop Blue Mountain Cycle Rentals as the most convenient and cost-effective rental alternative for the thousands of visitors who flock to the area each year.

Once underway, we will expand our scope and take advantage of high-margin new equipment sales and leverage our existing labor force to sell and service those products. Within three years we intend to create the area's premier destination for cycling enthusiasts.

Company and Management

Blue Mountain Cycle Rentals will be located at 321 Mountain Drive, a location providing extremely high visibility as well as direct entry and exit from a primary national park access road. The owner of the company, Marty Cycle, has over 20 years experience in the bicycle business, having served as a product manager for Acme Cycles as well as the general manager of Epic Cycling.

Because of his extensive industry contacts, initial equipment inventory will be purchased at significant discounts from OEM suppliers as well by sourcing excess inventory from shops around the country.

Because of the somewhat seasonal nature of the business, part-time employees will be hired to handle spikes in demand. Those employees will be attracted through competitive wages as well as discounts products and services.

460,000 people visited the George Washington National Forest during the last 12 months. While the outdoor tourism industry as a whole is flat, the park expects its number of visitors to grow over the next few years.

The economic outlook indicates fewer VA, WV, NC, and MD cycling enthusiasts will travel outside the region
The park has added a camping and lodging facilities that should attract an increased number of visitors
The park has opened up additional areas for trail exploration and construction, ensuring a greater number of single-track options and therefore a greater number of visitors

The market potential inherent in those visitors is substantial. According to third-party research data, approximately 30 percent of all cyclists would rather rent than transport their own bicycles, especially those who are visiting the area for reasons other than cycling.

Competitive Advantages

The cycling shops located in Harrisonburg, VA, are direct and established competitors. Our two primary competitive advantages will be location and lower costs.

Our location is also a key disadvantage where non-park rentals are concerned. We will overcome that issue by establishing a satellite location in Harrisonburg for enthusiasts who wish to rent bicycles to use in town or on other local trails.

We will also use online tools to better engage customers, allowing them to reserve and pay online as well as create individual profiles regarding sizes, preferences, and special needs.

Financial Projections

Blue Mountain Cycle Rentals expects to earn a modest profit by year two based on projected sales. Our projections are based on the following key assumptions:

Initial growth will be moderate as we establish awareness in the market
Initial equipment purchases will stay in service for an average of three to four years; after two years we will begin investing in "new" equipment to replace damaged or obsolete equipment
Marketing costs will not exceed 14 percent of sales
Residual profits will be reinvested in expanding the product and service line

We project first-year revenue of $720,000 and a 10 percent growth rate for the next two years. Direct cost of sales is projected to average 60 percent of gross sales, including 50 percent for the purchase of equipment and 10 percent for the purchase of ancillary items. Net income is projected to reach $105,000 in year three as sales increase and operations become more efficient.

And so on ...

Keep in mind this is just a made-up example of how your Summary might read. Also keep in mind this example focused on the rental business, so a description of products was not included. (They'll show up later.) If your business will manufacture or sell products, or provide a variety of services, then be sure to include a Products and Services section in your Summary. (In this case the products and services are obvious, so including a specific section would be redundant.)

Bottom line: Provide some sizzle in your Executive Summary, but make sure you show a reasonable look at the steak, too.

Providing an overview of your business can be tricky, especially when you're still in the planning stages. If you already own an existing business, summarizing your current operation should be relatively easy; it can be a lot harder to explain what you plan to become .

So start by taking a step back.

Think about what products and services you will provide, how you will provide those items, what you need to have in order to provide those items, exactly who will provide those items, and most important, whom you will provide those items to.

Consider our bicycle rental business example. It's serves retail customers. It has an online component, but the core of the business is based on face-to-face transactions for bike rentals and support.

So you'll need a physical location, bikes, racks and tools and supporting equipment, and other brick-and-mortar related items. You'll need employees with a very particular set of skills to serve those customers, and you'll need an operating plan to guide your everyday activities.

Sound like a lot? It boils down to:

What you will provide
What you need to run your business
Who will service your customers, and
Who your customers are.

In our example, defining the above is fairly simple. You know what you will provide to meet your customer's needs. You will of course need a certain quantity of bikes to service demand, but you will not need a number of different types of bikes. You need a retail location, furnished to meet the demands of your business. You need semi-skilled employees capable of sizing, customizing, and repairing bikes.

And you know your customers: cycling enthusiasts.

In other businesses and industries, answering the above questions can be more difficult. If you open a restaurant, what you plan to serve will in some ways determine your labor needs, the location you choose, the equipment you need to purchase. And, most important, it will help define your customer. Changing any one element may change other elements; if you cannot afford to purchase expensive kitchen equipment, you may need to adapt your menu accordingly. If you hope to attract an upscale clientele, you may need to invest more in purchasing a prime location and creating an appealing ambience.

So where do you start? Focus on the basics first:

Identify your industry. Retail, wholesale, service, manufacturing, etc. Clearly define your type of business.
Identify your customer. You cannot market and sell to customers until you know who they are.
Explain the problem you solve. Successful businesses create customer value by solving problems. In our rental example, one problem is cycling enthusiasts who don't--or can't--travel with bikes. Another problem is casual cyclists who can't--or choose not to--spend significant sums on their own bikes. The rental shop will solve that problem by offering a lower-cost and convenient alternative.
Show how you will solve that problem. Our rental shop will offer better prices and enhanced services like remote deliveries, off-hours equipment returns, and online reservations.

If you are still stuck, try answering these questions. Some may pertain to you; others may not.

Who is my average customer? Who am I targeting? (Unless you plan to open a grocery store, you should be unlikely to answer, "Everyone!")
What pain point do I solve for my customers?
How will I overcome that paint point?
Where will I fail to solve a customer problem, and what can I do to overcome that issue? (In our rental example, one problem is a potential lack of convenience; we will overcome that issue by offering online reservations, on-resort deliveries, and drive-up equipment returns.)
Where will I locate my business?
What products, services, and equipment do I need to run my business?
What skills do my employees need, and how many do I need?
How will I beat my competition?
How can I differentiate myself from my competition in the eyes of my customers? (You can have a great plan to beat your competition, but you also must win the perception battle among your customers. If customers don't feel you are different, then you aren't truly different. Perception is critical.)

Once you work through this list you will probably end up with a lot more detail than is necessary for your business plan. That is not a problem: Start summarizing the main points. For example, your Business Overview and Objectives section could start something like this:

History and Vision

Blue Mountain Cycle Rentals is a new retail venture that will be located at 321 Mountain Drive, directly adjacent to an extremely popular cycling destination. Our initial goal is to become the premier provider for bicycle rentals. We will then leverage our customer base and position in the market to offer new equipment sales as well as comprehensive maintenance and service, custom equipment fittings, and expert trail advice.

Achieve the largest market share bicycle rentals in the area
Generate a net income of $235,000 at the end of the second year of operation
Minimize rental inventory replacement costs by maintaining a 7 percent attrition rate on existing equipment (industry average is 12 percent)

Keys to Success

Provide high-quality equipment, sourcing that equipment as inexpensively as possible through existing relationships with equipment manufacturers and other cycling shops
Use signage to attract visitors traveling to the national forest, highlighting our cost and service advantage
Create additional customer convenience factors to overcome a perceived lack of convenience for customers planning to ride roads and trails some distance away from our shop
Develop customer incentive and loyalty programs to leverage customer relationships and create positive word of mouth

You could certainly include more detail in each section; this is simply a quick guide. And if you plan to develop a product or service, you should thoroughly describe the development process as well as the end result.

The key is to describe what you will do for your customers--if you can't, you won't have any customers.

In the Products and Services section of your business plan, you will clearly describe--yep--the products and services your business will provide.

Keep in mind that highly detailed or technical descriptions are not necessary and definitely not recommended. Use simple terms and avoid industry buzzwords.

On the other hand, describing how the company's products and services will differ from the competition is critical. So is describing why your products and services are needed if no market currently exists. (For example, before there was Federal Express, overnight delivery was a niche business served by small companies. FedEx had to define the opportunity for a new, large-scale service and justify why customers needed--and would actually use --that service.)

Patents, copyrights, and trademarks you own or have applied for should also be listed in this section.

Depending on the nature of your business, your Products and Services section could be very long or relatively short. If your business is product-focused, you will want to spend more time describing those products.

If you plan to sell a commodity item and the key to your success lies in, say, competitive pricing, you probably don't need to provide significant product detail. Or if you plan to sell a commodity readily available in a variety of outlets, the key to your business may not be the commodity itself but your ability to market in a more cost-effective way than your competition.

But if you're creating a new product (or service), make sure you thoroughly explain the nature of the product, its uses, and its value, etc.--otherwise your readers will not have enough information to evaluate your business.

Key questions to answer:

Are products or services in development or existing (and on the market)?
What is the timeline for bringing new products and services to market?
What makes your products or services different? Are there competitive advantages compared with offerings from other competitors? Are there competitive disadvantages you will need to overcome? (And if so, how?)
Is price an issue? Will your operating costs be low enough to allow a reasonable profit margin?
How will you acquire your products? Are you the manufacturer? Do you assemble products using components provided by others? Do you purchase products from suppliers or wholesalers? If your business takes off, is a steady supply of products available?

In the cycling rental business example we've been using, products and services could be a relatively simple section to complete or it could be fairly involved. It depends on the nature of the products the company plans to rent to customers.

If Blue Mountain Cycling Rentals plans to market itself as a provider of high-end bikes, describing those bikes--and the sources for those bikes--is important, since "high-end cycling rentals" is intended to be a market differentiation. If the company plans to be the low-cost provider, then describing specific brands of equipment is probably not necessary.

Also, keep in mind that if a supplier runs out of capacity--or goes out of business altogether--you may not have a sufficient supply to meet your demand. Plan to set up multiple vendor or supplier relationships, and describe those relationships fully.

Remember, the primary goal of your business plan is to convince you that the business is viable--and to create a road map for you to follow.

The Products and Services section for our cycling rental business could start something like this:

Product Description

Blue Mountain Cycle Rentals will provide a comprehensive line of bicycles and cycling equipment for all ages and levels of ability. Since the typical customer seeks medium-quality equipment and excellent services at competitive prices, we will focus on providing brands like Trek bikes, Shimano footwear, and Giro helmets. These manufacturers have a widespread reputation as mid- to high-level quality, unlike equipment typically found in the rental market.

The following is a breakdown of anticipated rental price points, per day and per week:

Bicycle $30/$120
Helmet $6/$30
Customers can extend the rental term online without visiting the store.
A grace period of two hours will be applied to all rentals; customers who return equipment within that two-hour period will not be charged an additional fee.

Competition

Blue Mountain Cycle Rentals will have clear advantages over its primary competitors, the bike shops located in Harrisonburg, VA:

Newer equipment inventory with higher perceived quality
Price points 15 percent below the competition
Online renewals offering greater convenience
A liberal return grace period that will reinforce our reputation as a customer-friendly rental experience

Future Products

Expansion will allow us to move product offerings into new equipment sales. We will also explore maintenance and fitting services, leveraging our existing maintenance staff to provide value-added services at a premium price.

When you draft your Products and Services section, think of your reader as a person who knows little to nothing about your business. Be clear and to the point.

Think of it this way: The Products and Services section answers the "what" question for your business. Make sure you fully understand the "what" factor; you may run the business, but your products and services are its lifeblood.

Market research is critical to business success. A good business plan analyzes and evaluates customer demographics, purchasing habits, buying cycles, and willingness to adopt new products and services.

The process starts with understanding your market and the opportunities inherent in that market. And that means you'll need to do a little research. Before you start a business you must be sure there is a viable market for what you plan to offer.

That process requires asking, and more importantly answering, a number of questions. The more thoroughly you answer the following questions, the better you will understand your market.

Start by evaluating the market at a relatively high level, answering some high-level questions about your market and your industry:

What is the size of the market? Is it growing, stable, or in decline?
Is the overall industry growing, stable, or in decline?
What segment of the market do I plan to target? What demographics and behaviors make up the market I plan to target?
Is demand for my specific products and services rising or falling?
Can I differentiate myself from the competition in a way customers will find meaningful? If so, can I differentiate myself in a cost-effective manner?
What do customers expect to pay for my products and services? Are they considered to be a commodity or to be custom and individualized?

Fortunately, you've already done some of the legwork. You've already defined and mapped out your products and services. The Market Opportunities section provides a sense-check of that analysis, which is particularly important since choosing the right products and services is such a critical factor in business success.

But your analysis should go further: Great products are great, but there still must be a market for those products. (Ferraris are awesome, but you're unlikely to sell many where I live.)

So let's dig deeper and quantify your market. Your goal is to thoroughly understand the characteristics and purchasing ability of potential customers in your market. A little Googling can yield a tremendous amount of data.

For the market you hope to serve, determine:

Your potential customers. In general terms, potential customers are the people in the market segment you plan to target. Say you sell jet skis; anyone under the age of 16 and over the age of 60 or so is unlikely to be a customer. Plus, again in general terms, women make up a relatively small percentage of jet ski purchasers. Determining the total population for the market is not particularly helpful if your product or service does not serve a need for the entire population. Most products and services do not.
Total households. In some cases determining the number of total households is important depending on your business. For example, if you sell heating and air conditioning systems, knowing the number of households is more important than simply knowing the total population in your area. While people purchase HVAC systems, "households" consume those systems.
Median income. Spending ability is important. Does your market area have sufficient spending power to purchase enough of your products and services to enable you to make a profit? Some areas are more affluent than others. Don't assume every city or locality is the same in terms of spending power. A service that is viable in New York City may not be viable in your town.
Income by demographics. You can also determine income levels by age group, by ethnic group, and by gender. (Again, potential spending power is an important number to quantify.) Senior citizens could very well have a lower income level than males or females age 45 to 55 in the prime of their careers. Or say you plan to sell services to local businesses; in that case, try to determine the amount they currently spend on similar services.

The key is to understand the market in general terms and then to dig deeper to understand whether there are specific segments within that market--the segments you plan to target--that can become customers and support the growth of your business.

Also keep in mind that if you plan to sell products online the global marketplace is incredibly crowded and competitive. Any business can sell a product online and ship that product around the world. Don't simply assume that just because "the bicycle industry is a $62 billion business" (a number I just made up) that you can capture a meaningful percentage of that market.

On the other hand, if you live in an area with 50,000 people and there's only one bicycle shop, you may be able to enter that market and attract a major portion of bicycle customers in your area.

Always remember it's much easier to serve a market you can define and quantify.

After you complete your research you may feel a little overwhelmed. While data is good, and more data is great, sifting through and making sense of too much data can be daunting.

For the purposes of your business plan, narrow your focus and focus on answering these main questions:

What is your market? Include geographic descriptions, target demographics, and company profiles (if you're B2B). In short: Who are your customers?
What segment of your market will you focus on? What niche will you attempt to carve out? What percentage of that market do you hope to penetrate and acquire?
What is the size of your intended market? What is the population and spending habits and levels?
Why do customers need and why will they be willing to purchase your products and services?
How will you price your products and services? Will you be the low cost provider or provide value-added services at higher prices?
Is your market likely to grow? How much? Why?
How can you increase your market share over time?

The Market Opportunities section for our cycling rental business could start something like this:

Market Summary

Consumer spending on cycling equipment reached $9,250,000 in the states of VA, WV, MD, and NC last year. While we expect sales to rise, for the purposes of performing a conservative analysis we have projected a zero growth rate for the next three years.

In those states 2,500,000 people visited a national forest last year. Our target market includes customers visiting the Shenandoah National Forest; last year 120,000 people visited the area during spring, summer, and fall months.

Over time, however, we do expect equipment rentals and sales to increase as the popularity of cycling continues to rise. In particular we forecast a spike in demand in 2015 since the national road racing championships will be held in Richmond, VA.

Market Trends

Participation and population trends favor our venture:

Recreational sports in general and both family-oriented and "extreme" sports continue to gain in exposure and popularity.
Western VA and eastern WV have experienced population growth rates nearly double that of the country as a whole.
Industry trends show cycling has risen at a more rapid rate than most other recreational activities.

Market Growth

According to the latest studies, recreation spending in our target market has grown by 14 percent per year for the past three years.

In addition, we anticipate greater than industry-norm growth rates for cycling in the area due to the increase in popularity of cycling events like the Alpine Loop Gran Fondo.

Market Needs

Out target market has one basic need: The availability to source bicycle rentals at a competitive price. Our only other competition are the bike shops in Harrisonburg, VA, and our location will give us a competitive advantage over those and other companies who try to serve our market.

You may want to add other categories to this section based on your particular industry.

For example, you might decide to provide information about Market Segments. In our case, the cycling rental business does not require much segmentation. Rentals are typically not broken down into segments like "inexpensive," "midrange," and "high-end." For the most part rental bikes are more of a commodity. (Although you'll notice in our Products and Services section, we decided to provide "high-end" rentals.)

But say you decide to open a clothing store. You could focus on high fashion, or children's clothes, or outdoor wear, or casual--you could segment the market in a number of ways. If that's the case, provide detail on segmentation that supports your plan.

The key is to define your market--and then show how you will serve your market.

Providing great products and services is wonderful, but customers must actually know those products and services exist. That's why marketing plans and strategies are critical to business success. (Duh, right?)

But keep in mind marketing is not just advertising. Marketing--whether advertising, public relations, promotional literature, etc.--is an investment in the growth of your business.

Like any other investment you would make, money spent on marketing must generate a return. (Otherwise why make the investment?) While that return could simply be greater cash flow, good marketing plans result in higher sales and profits.

So don't simply plan to spend money on a variety of advertising efforts. Do your homework and create a smart marketing program .

Here are some of the basic steps involved in creating your marketing plan:

Focus on your target market. Who are your customers? Who will you target? Who makes the decisions? Determine how you can best reach potential customers.
Evaluate your competition. Your marketing plan must set you apart from your competition, and you can't stand out unless you know your competition. (It's hard to stand out from a crowd if you don't know where the crowd stands.) Know your competitors by gathering information about their products, service, quality, pricing, and advertising campaigns. In marketing terms, what does your competition do that works well? What are their weaknesses? How can you create a marketing plan that highlights the advantages you offer to customers?
Consider your brand. How customers perceive your business makes a dramatic impact on sales. Your marketing program should consistently reinforce and extend your brand. Before you start to market your business, think about how you want your marketing to reflect on your business and your products and services. Marketing is the face of your to potential customers--make sure you put your best face forward.
Focus on benefits. What problems do you solve? What benefits do you deliver? Customers don't think in terms of products--they think in terms of benefits and solutions. Your marketing plan should clearly identify benefits customers will receive. Focus on what customers get instead of on what you provide. (Take Dominos; theoretically they're in the pizza business, but really they're a delivery business.)
Focus on differentiation. Your products and services have to stand out from the competition in some way. How will you compete in terms of price, product, or service?

Then focus on providing detail and backup for your marketing plan.

What is your budget for sales and marketing efforts?
How will you determine if your initial marketing efforts are successful? In what ways will you adapt if your initial efforts do not succeed?
Will you need sales representatives (inside or external) to promote your products?
Can you set up public relations activities to help market your business?

The Sales and Marketing section for our cycling rental business could start something like this:

Target Market

The target market for Blue Mountain Cycling Rentals is western VA, eastern WV, southwestern MD, and northern NC. While customers in the counties surrounding the George Washington National Forest make up 35 percent of our potential customer base, much of our market travels from outside that geographic area.

Marketing Strategy

Our marketing strategy will focus on three basic initiatives:

Road signage. Access to the forest is restricted to a few primary entrances, and visitors reach those entrances after traveling on one of several main roadways. Since customers currently rent bicycles in the local town of Harrisonburg, road signage will communicate our value proposition to all potential customers.
Web initiatives. Our website will attract potential visitors to the resort. We will partner with local businesses that serve our target market to provide discounts and incentives.
Promotional events. We will hold regular events with professional cyclists, like demonstrations and autograph signings, to bring more customers to the store as well as to extend the athletes' "brand" to our brand.

Pricing Strategy

We will not be the low-cost provider for our target market. Our goal is to provide mid- to high-end equipment. However, we will create web-based loyalty programs to incent customers to set up online profiles and reserve and renew equipment rentals online, and provide discounts for those who do. Over time we will be able to market specifically to those customers.

Just as in the Market Opportunity section, you may want to include a few more categories. For example, if your business involves a commission-compensated sales force, describe your Sales Programs and incentives. If you distribute products to other companies or suppliers and those distribution efforts will impact your overall marketing plans, lay out your Distribution Strategy.

The key is to show you understand your market and you understand how you will reach your market. Marketing and promotions must result in customers--your goal is to thoroughly describe how you will acquire and keep your customers.

Also keep in mind you may want to include examples of marketing materials you have already prepared, like website descriptions, print ads, web-based advertising programs, etc. While you don't need to include samples, taking the time to create actual marketing materials might help you better understand and communicate your marketing plans and objectives.

Make sure your Sales and Marketing section answers the "How will I reach my customers?" question.

Competitive Advantage

The Competitive Analysis section of your business plan is devoted to analyzing your competition--both your current competition and potential competitors who might enter your market.

Every business has competition. Understanding the strengths and weaknesses of your competition--or potential competition--is critical to making sure your business survives and grows. While you don't need to hire a private detective, you do need to thoroughly assess your competition on a regular basis even if you plan to run only a small business.

In fact, small businesses can be especially vulnerable to competition, especially when new companies enter a marketplace.

Competitive analysis can be incredibly complicated and time-consuming, but it doesn't have to be. Here is a simple process you can follow to identify, analyze, and determine the strengths and weaknesses of your competition.

Profile Current Competitors

First, develop a basic profile of each of your current competition. For example, if you plan to open an office supply store, you may have three competing stores in your market.

Online retailers will also provide competition, but thoroughly analyzing those companies will be less valuable unless you also decide you want to sell office supplies online. (Although it's also possible that they--or, say, Amazon--are your real competition. Only you can determine that.)

To make the process easier, stick to analyzing companies you will directly compete with. If you plan to set up an accounting firm, you will compete with other accounting firms in your area. If you plan to open a clothing store, you will compete with other clothing retailers in your area.

Again, if you run a clothing store, you also compete with online retailers, but there is relatively little you can do about that type of competition other than to work hard to distinguish yourself in other ways: great service, friendly salespeople, convenient hours, truly understanding your customers, etc.

Once you identify your main competitors, answer these questions about each one. And be objective. It's easy to identify weaknesses in your competition, but less easy (and a lot less fun) to recognize how they may be able to outperform you:

What are their strengths? Price, service, convenience, and extensive inventory are all areas where you may be vulnerable.
What are their weaknesses? Weaknesses are opportunities you should plan to take advantage of.
What are their basic objectives? Do they seek to gain market share? Do they attempt to capture premium clients? See your industry through their eyes. What are they trying to achieve?
What marketing strategies do they use? Look at their advertising, public relations, etc.
How can you take market share away from their business?
How will they respond when you enter the market?

While these questions may seem like a lot of work to answer, in reality the process should be fairly easy. You should already have a feel for the competition's strengths and weaknesses--if you know your market and your industry.

To gather information, you can also:

Check out their websites and marketing materials. Most of the information you need about products, services, prices, and company objectives should be readily available. If that information is not available, you may have identified a weakness.
Visit their locations. Take a look around. Check out sales materials and promotional literature. Have friends stop in or call to ask for information.
Evaluate their marketing and advertising campaigns. How a company advertises creates a great opportunity to uncover the objectives and strategies of that business. Advertising should help you quickly determine how a company positions itself, who it markets to, and what strategies it employs to reach potential customers.
Browse. Search the Internet for news, public relations, and other mentions of your competition. Search blogs and Twitter feeds as well as review and recommendation sites. While most of the information you find will be anecdotal and based on the opinion of just a few people, you may at least get a sense of how some consumers perceive your competition. Plus you may also get advance warning about expansion plans, new markets they intend to enter, or changes in management.

Keep in mind competitive analysis does more than help you understand your competition. Competitive analysis can also help you identify changes you should make to your business strategies. Learn from competitor strengths, take advantage of competitor's weaknesses, and apply the same analysis to your own business plan.

You might be surprised by what you can learn about your business by evaluating other businesses.

Identify Potential Competitors

It can be tough to predict when and where new competitors may pop up. For starters, regularly search for news on your industry, your products, your services, and your target market.

But there are other ways to predict when competition may follow you into a market. Other people may see the same opportunity you see. Think about your business and your industry, and if the following conditions exist, you may face competition does the road:

The industry enjoys relatively high profit margins
Entering the market is relatively easy and inexpensive
The market is growing--the more rapidly it is growing the greater the risk of competition
Supply and demand is off--supply is low and demand is high
Very little competition exists, so there is plenty of "room" for others to enter the market

In general terms, if serving your market seems easy you can safely assume competitors will enter your market. A good business plan anticipates and accounts for new competitors.

Now distill what you've learned by answering these questions in your business plan:

Who are my current competitors? What is their market share? How successful are they?
What market do current competitors target? Do they focus on a specific customer type, on serving the mass market, or on a particular niche?
Are competing businesses growing or scaling back their operations? Why? What does that mean for your business?
How will your company be different from the competition? What competitor weaknesses can you exploit? What competitor strengths will you need to overcome to be successful?
What will you do if competitors drop out of the marketplace? What will you do to take advantage of the opportunity?
What will you do if new competitors enter the marketplace? How will you react to and overcome new challenges?

The Competitive Analysis section for our cycling rental business could start something like this:

Primary Competitors

Our nearest and only competition is the bike shops in Harrisonburg, VA. Our next closest competitor is located over 100 miles away.

The in-town bike shops will be strong competitors. They are established businesses with excellent reputations. On the other hand, they offer inferior-quality equipment and their location is significantly less convenient.

Secondary Competitors

We do not plan to sell bicycles for at least the first two years of operation. However, sellers of new equipment do indirectly compete with our business since a customer who buys equipment no longer needs to rent equipment.

Later, when we add new equipment sales to our operation, we will face competition from online retailers. We will compete with new equipment retailers through personalized service and targeted marketing to our existing customer base, especially through online initiatives.

Opportunities

By offering mid- to high-end quality equipment, we provide customers the opportunity to "try out" bikes they may wish to purchase at a later date, providing additional incentive (besides cost savings) to use our service.
Offering drive-up, express rental return services will be seen as a much more attractive option compared with the hassle of renting bikes in Harrisonburg and transporting them to intended take-off points for rides.
Online initiatives like online renewals and online reservations enhances customer convenience and positions us as a cutting-edge supplier in a market largely populated, especially in the cycling segment, by customers who tend to be early technology adapters.
Renting bikes and cycling equipment may be perceived by some of our target market as a commodity transaction. If we do not differentiate ourselves in terms of quality, convenience, and service, we could face additional competition from other entrants to the market.
One of the bike shops in Harrisonburg is a subsidiary of a larger corporation with significant financial assets. If we, as hoped, carve out a significant market share, the corporation may use those assets to increase service, improve equipment quality, or cut prices.

While your business plan is primarily intended to convince you that your business makes sense, keep in mind most investors look closely at your competitive analysis. A common mistake made by entrepreneurs is assuming they will simply "do it better" than any competition.

Experienced businesspeople know you will face stiff competition: showing you understand your competition, understand your strengths and weaknesses relative to that competition, and that you understand you will have to adapt and change based on that competition is critical.

And, even if you do not ever plan to seek financing or bring in investors, you absolutely must know your competition.

The Competitive Analysis section helps you answer the "Against whom?" question.

The next step in creating your business plan is to develop an Operations Plan that will serve your customers, keep your operating costs in line, and ensure profitability . Your ops plan should detail strategies for managing, staffing, manufacturing, fulfillment, inventory--all the stuff involved in operating your business on a day-to-day basis.

Fortunately, most entrepreneurs have a better handle on their operations plan than on any other aspect of their business. After all, while it may not seem natural to analyze your market or your competition, most budding entrepreneurs tend to spend a lot of time thinking about how they will run their businesses.

Your goal is to answer the following key questions:

What facilities, equipment, and supplies do you need?
What is your organizational structure? Who is responsible for which aspects of the business?
Is research and development required, either during start up or as an ongoing operation? If so, how will you accomplish this task?
What are your initial staffing needs? When and how will you add staff?
How will you establish business relationships with vendors and suppliers? How will those relationships impact your day-to-day operations?
How will your operations change as the company grows? What steps will you take to cut costs if the company initially does not perform up to expectations?

Operations plans should be highly specific to your industry, your market sector, and your customers. Instead of providing an example like I've done with other sections, use the following to determine the key areas your plan should address:

Location and Facility Management

In terms of location, describe:

Zoning requirements
The type of building you need
The space you need
Power and utility requirements
Access: Customers, suppliers, shipping, etc.
Specialized construction or renovations
Interior and exterior remodeling and preparation

Daily Operations

Production methods
Service methods
Inventory control
Sales and customer service
Receiving and Delivery
Maintenance, cleaning, and re-stocking
Licenses and permits
Environmental or health regulations
Patents, trademarks, and copyrights

Personnel Requirements

Typical staffing
Breakdown of skills required
Recruiting and retention
Policies and procedures
Pay structures
Anticipated inventory levels
Turnover rate
Seasonal fluctuations in demand
Major suppliers
Back-up suppliers and contingency plans
Credit and payment policies

Sound like a lot? It can be, but not all of the above needs to be in your business plan.

You should think through and create a detailed plan for each category, but you won't need to share the results with the people who read your business plan

Working through each issue and developing concrete operations plans helps you in two major ways:

If you don't plan to seek financing or outside capital, you can still take advantage of creating a comprehensive plan that addresses all of your operational needs.
If you do seek financing or outside capital, you may not include all the detail in your business plan--but you will have answers to any operations questions at your fingertips.

Think of Operations as the "implementation" section of your business plan. What do you need to do? How will you get it done? Then create an overview of that plan to make sure your milestones and timeline make sense.

That way the operations section answers the "How?" question.

Many investors and lenders feel the quality and experience of the management team is one of the most important factors used to evaluate the potential of a new business.

But putting work into the Management Team section will not only benefit people who may read your plan. It will also help you evaluate the skills, experiences, and resources your management team will need . Addressing your company's needs during implementation will make a major impact on your chances for success.

Who are the key leaders? (If actual people have not been identified, describe the type of people needed.) What are their experiences, educational backgrounds, and skills?
Do your key leaders have industry experience? If not, what experience do they bring to the business that is applicable?
What duties will each position perform? (Creating an organization chart might be helpful.) What authority is granted to and what responsibilities are expected in each position?
What salary levels will be required to attract qualified candidates for each position? What is the salary structure for the company, by position?

The Management Team section for our cycling rental business could start something like this:

Jim Rouleur, Owner and Manager

Joe has over 20 years experience in the cycling business. He served for 10 years as a product manager for Acme Bikes. After that he was the operations manager of Single Track Cycles, a full-service bike shop located in Bend, Oregon. He has an undergraduate degree in marketing from Duke University and an MBA from Virginia Commonwealth University. (A complete resume for Mr. Rouleur can be found in the Appendix.)

Mary Gearset, Assistant Manager

Mary was the 2009 U.S. Mountain Biking National Champion. She worked in product development for High Tec frames, creating custom frames and frame modifications for professional cyclists. She also has extensive customer service and sales experience, having worked for four years as the online manager of Pro Parts Unlimited, an online retailer of high-end cycling equipment and accessories.

In some instances you may also wish to describe your staffing plans.

For example, if you manufacture a product or provide a service and will hire a key skilled employee, describe that employee's credentials. Otherwise, include staffing plans in the Operations section.

One key note: Don't be tempted to add a "name" to your management team in hopes of attracting investors. Celebrity management team members may attract the attention of your readers, but experienced lenders and investors will immediately ask what role that person will actually play in the running of the business--and in most cases those individuals won't play any meaningful role.

If you don't have a lot of experience--but are willing to work hard to overcome that lack of experience--don't be tempted to include people in your plan who will not actually work in the business.

If you can't survive without help, that's okay. In fact, that's expected; no one does anything worthwhile on their own. Just make plans to get help from the right people.

Finally, when you create your Management section, focus on credentials but pay extra attention to what each person actually will do . Experience and reputation are great, but action is everything.

That way your Management section will answer the "Who is in charge?" question.

Numbers tell the story. Bottom line results indicate the success or failure of any business.

Financial projections and estimates help entrepreneurs, lenders, and investors or lenders objectively evaluate a company's potential for success. If a business seeks outside funding, providing comprehensive financial reports and analysis is critical.

But most important, financial projections tell you whether your business has a chance of being viable--and if not let you know you have more work to do.

Most business plans include at least five basic reports or projections:

Balance Sheet: Describes the company cash position including assets, liabilities, shareholders, and earnings retained to fund future operations or to serve as funding for expansion and growth. It indicates the financial health of a business.
Income Statement: Also called a Profit and Loss statement, this report lists projected revenue and expenses. It shows whether a company will be profitable during a given time period.
Cash Flow Statement: A projection of cash receipts and expense payments. It shows how and when cash will flow through the business; without cash, payments (including salaries) cannot be made.
Operating Budget: A detailed breakdown of income and expenses; provides a guide for how the company will operate from a "dollars" point of view.
Break-Even Analysis: A projection of the revenue required to cover all fixed and variable expenses. Shows when, under specific conditions, a business can expect to become profitable.

It's easy to find examples of all of the above. Even the most basic accounting software packages include templates and samples. You can also find templates in Excel and Google Docs. (A quick search like "google docs profit and loss statement" yields plenty of examples.)

Or you can work with an accountant to create the necessary financial projections and documents. Certainly feel free to do so, but first play around with the reports yourself. While you don't need to be an accountant to run a business, you do need to understand your numbers, and the best way to understand your numbers is usually to actually work with your numbers.

But ultimately the tools you use to develop your numbers are not as important as whether those numbers are as accurate as possible--and whether those numbers help you decide whether to take the next step and put your business plan into action.

Then Financial Analysis can help you answer the most important business question: "Can we make a profit?"

Some business plans include less essential but potentially important information in an Appendix section. You may decide to include, as backup or additional information:

Resumes of key leaders
Additional descriptions of products and services
Legal agreements
Organizational charts
Examples of marketing and advertising collateral
Photographs of potential facilities, products, etc.
Backup for market research or competitive analysis
Additional financial documents or projections

Keep in mind creating an Appendix is usually only necessary if you're seeking financing or hoping to bring in partners or investors. Initially the people reading your business plan don't wish to plow through reams and reams of charts, numbers, and backup information. If one does want to dig deeper, fine--he or she can check out the documents in the Appendix.

That way your business plan can share your story clearly and concisely.

Otherwise, since you created your business plan, you should already have the backup.

Tying It All Together

While you may use your business plan to attract investors, partners, suppliers, etc., never forget that the goal of your business plan is to convince you that your idea makes sense.

Because ultimately it's your time, your money, and your effort on the line.

The Daily Digest for Entrepreneurs and Business Leaders

How to Make a Justification Step by Step?

The Steps to make a justification In a correct way are: describe the problem, establish the reasons for it, create a base of support to demonstrate your need and finally discuss the budget.

The justification of a project must explain why a particular solution needs to be implemented to the problem described in the paper. The best justifications are those where the benefits identified are greater than the cost of preparing the project.

The justification for a project should be explained as a description of what will happen if the project is carried out and what will happen if the project is not carried out.

Justifications are often included in budget proposals, research papers, theses, or are used to appeal some changes in policy or legislation.

A good justification narrative should include a statement of what is proposed, or what the project will focus on.

This statement should include why the project is believed to be carried out, the budget constraints, or the policy to be implemented.

It should not be something specific necessarily, but a persuasive and strong statement must be made. In addition, the reasoning behind such statements should also be provided.

Sufficient support should also be provided in the form of statistics, studies and expert opinions.

These elements help support justification. It should always be remembered that the main purpose of justification is to answer the question of why this particular project is being carried out.

You may be interested 15 Examples of Project Justification .

Steps to prepare a justification

Aspects of justification.

It should be borne in mind that the justification must state the reasons why the investigation is being carried out. It should also include three important aspects:

- Theoretical aspect

The reasons or theoretical reasons that support the project must be presented. Therefore, we must indicate the contributions that will have this work on the area under investigation.

It should answer the questions: Do you want to reaffirm a theoretical model or change it, will the research results be a theoretical complement to the fundamentals of it?

For example, if one wants to do research on deforestation of eucalyptus in the forest, an emphasis should be placed on the new knowledge of environmental impact that will be obtained.

- The practical aspect

It should be presented how applicable the project is, its projection in society and who will benefit. You must answer the questions: Will this research have concrete results?, Will this project solve problems in any particular area?

If research is being done on gender equality in a workplace, it should be indicated that it will be beneficial to the company and employees; As well as indicate that the sample taken will be of a certain number of variables for the study to be carried out.

- The methodological aspect

The justification should indicate the possible contributions to other projects and the design that will be used.

You must answer these questions: Will the results allow the validity of your application to be solved? Can the results be used in other research?

For example, it can be said that the study on the cultivation of tomatoes in a region may be helpful in the future when agricultural research in that area is desired.

Steps to take to write justification

1- describe the problem.

The project should not be done for fun, but should serve to solve a specific or particular problems. Therefore, the problem should be clearly described at the beginning of the document and in this way the solution to the problem can be presented.

If you want to implement a new human resources system in a company, the problem would be something like:"The human resources team currently occupies 80% of its time in non-productive administrative tasks, reducing the effectiveness of the functions in a dramatic way"

Another example might be the following:"Due to the lack of management skills and management of farmers in this region, individuals are falling into poverty and migration. The lands that could be productive are being abandoned because of the lack of management of the workers"

2- Establish the reasons

After giving the statement, a reasoning must be given. For example, if a vending machine has been ordered in the workplace, details should be given as to why it is important that it be implemented.

It could be argued that access to snacks could improve the overall productivity of people. It is important to frame the argument with the audience in mind.

In the case of the vending machine, it is not enough to mention the increase in productivity in people.

Therefore, it should not only be said that employees would enjoy this machine, it should be included how it would help the company as well.

In this case it could be argued that productive employees generate more workflow, for example.

In the case of farmers leaving the field, it may be argued that it is important to establish management training in the field as more farmers doing their work translate into better income and crops for the region.

3- Create a base of support

You should always create support for justification, so that the reader knows that what is being mentioned is true.

This support base can come in the form of statistics, previous studies, or even expert opinions on the subject.

As long as more bases are supported to support the argument, the justification will be stronger.

Taking the case of the vending machine should include studies that show how hunger can decrease productivity.

If possible, case studies should be found of companies that have provided benefits such as snacks, cafeterias or vending machines and experienced positive results.

In the case of farmers, statistics can be taken of the number of existing crops, projections of potential gains from larger harvests, etc.

4- Discuss the budget

Regardless of the project class, the budget will always be an important part of the discussion.

Relevant information on the budget should be included, including the resources that will be needed to support the proposal and the impact it will have.

It should include possible income, expenses that could be saved, how much the research will cost, etc.

Good relevant information about the budget should be included to reinforce the justification.

For the vending machine proposal, it could include the cost of the machine versus the revenue that could be generated from the purchases and the revenues from the increased profits of the projected productivity.

In the case of farmers, a link could be made between investment in training courses and the number of crops that could be cultivated.

How to write a narrative justification. Retrieved from educationseattlepi.com.
How to justify the research (2010). Recovered from slideshare.com.
How to write a project justification in a proposal (2010). Recovered from fundsforngos.org.
The justification of the research work. Recovered from asesoriatesis1960.blogspot.com.
Technical writing how to write project justification documents (2011). Retrieved from ezinearticles.com.

Project Justification

Project justification is a crucial step in project management that involves evaluating the feasibility and viability of a project before committing resources and efforts to it. It ensures that projects align with organizational goals and have a high probability of delivering the intended benefits.

Importance of Project Justification:

2. Resource Allocation: Project justification allows organizations to allocate resources effectively by assessing the potential benefits and costs of different projects. It helps in making informed decisions about resource allocation, ensuring that resources are directed towards projects with the highest potential returns.

Methods of Project Justification:

1. Cost-Benefit Analysis: Cost-benefit analysis involves quantifying and comparing the costs of a project against the expected benefits. It assesses both tangible and intangible benefits and helps determine if the benefits outweigh the costs.

Example: An organization plans to invest in a marketing campaign to promote a new product. The ROI is calculated by estimating the expected revenue generated from the campaign and comparing it to the campaign’s costs (advertising expenses, production costs). If the ROI is higher than the organization’s predetermined threshold or the industry average, the project is justified.

These methods of project justification provide organizations with structured approaches to assess the feasibility, viability, and potential benefits of projects. By applying these methods and considering various factors, organizations can make informed decisions about project selection and ensure that projects align with strategic objectives while delivering value to the organization.

Please Share This Share this content

Devendra kumar, you might also like, week 4 – networking services, week 2 – managing files with python, leave a reply cancel reply.

Business Plan Offering Example: Everything You Need to Know

A small business plan offering example revolves around the goods or services you plan to offer to the public or other businesses. 3 min read updated on January 01, 2024

A small business plan offering example revolves around the goods or services you plan to offer to the public or other businesses. It's important to understand what your company is offering in order to engage in the proper marketing efforts.

It's also important to understand how that offering will compare to the competition in your marketplace. Of course, the end goal is to influence a customer to purchase from you over the competition.

Some businesses offer multiple goods and/or services. For example, a car dealership might sell cars, but it can also offer services to repair and maintain cars. The term "product mix" refers to the entire line of products and services offered by such a business.

Product Depth

The product lines of companies have varying depths. Varying depth refers to the number of products or services a company plans to offer in each product line.

The depth of a product line also refers to the customer segments, or the various kinds of customers, that the product line will satisfy. For example, a car dealership might sell luxury, sport, economy, and utility vehicles in an effort to cater to a wide variety of customers. This may also help the dealership quash other competitors in the marketplace.

Product Width

Along with product depth, businesses may also want to consider "product width." Product width refers to the number of product lines being offered.

Product width can help a company increase its sales and marketing efforts. This may make its profits less susceptible to market fluctuations in the demand for each type of product.

For example, if a company sells hot chocolate and ice cream, it will withstand the market fluctuations that come with an increase in hot chocolate sales in the winter and a plummet in the summer.

Products or Services Section

In the Products or Services Section of your business plan , you'll describe the products or services you're offering and explain the concept for your business (including manufacturing, purchasing, packaging, and distribution). This is also the time to annotate suppliers and fees. You should also indicate how your offerings will fit into the current marketplace and size up against the competition.

This section provides a clear understanding of your motivations, what you plan to sell, how you will compete, and how you can find a niche that no one else is filling.

The Products or Services section must emphasize the value you will be providing to your clients or customers.

How to Write the Products or Services Section

This is the opportunity to provide an in-depth look at every element pertaining to the products and/or services you're selling. The Products or Services section can be broken down into the following parts:

A description of your products and/or services
A comparison to other products and/or services currently on the market
A list of all your price points
An explanation of how your product and/or service orders will be filled
An overview of specialized equipment, software, supplies, or technology required to produce your products and/or services
An outline of planned future offerings

In every part, you must maintain a focus on the benefits of your products and/or services to the public.

Explain your offerings in layman's terms so that even someone who's unfamiliar with those products or services may become excited about them. Always keep the reader in mind. Be aware of any elements you might take for granted because you know the industry inside out but that might not be common knowledge to your investors or lenders.

Avoid technical knowledge, acronyms, and buzzwords. Never make assumptions about the knowledge level of your readers. To make sure you've hit the mark, ask someone who's not in the industry to proofread this section. See if they can paraphrase the section for you in their own words and state the benefits of your products and/or services.

Other Considerations for the Products or Services Section

You may also want to include any pertinent accreditations or intellectual property in this section. Was your product tested or certified? Did you copyright, patent, or trademark your product? Each of these elements can add credibility and substance to your business plan.

Photos or brochures will also provide a visual representation of your offerings. Although these are typically found in the business plan's appendix, you could refer to them in this section as well.

If you need help with a business plan offering example, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.

Hire the top business lawyers and save up to 60% on legal fees

Content Approved by UpCounsel

What Is Service Product?
Service Business Plan
Is a Service a Product? Everything You Need to Know
Parts of Business Plan and Definition
What Are Product and Services Examples?
Business Plan Outline: Everything You Need To Know
What Is a Product or Service Description?
How to Make a Business Plan Format
Creating a Business Plan
Business Description Outline

PRO Courses Guides New Tech Help Pro Expert Videos About wikiHow Pro Upgrade Sign In
EDIT Edit this Article
EXPLORE Tech Help Pro About Us Random Article Quizzes Request a New Article Community Dashboard This Or That Game Happiness Hub Popular Categories Arts and Entertainment Artwork Books Movies Computers and Electronics Computers Phone Skills Technology Hacks Health Men's Health Mental Health Women's Health Relationships Dating Love Relationship Issues Hobbies and Crafts Crafts Drawing Games Education & Communication Communication Skills Personal Development Studying Personal Care and Style Fashion Hair Care Personal Hygiene Youth Personal Care School Stuff Dating All Categories Arts and Entertainment Finance and Business Home and Garden Relationship Quizzes Cars & Other Vehicles Food and Entertaining Personal Care and Style Sports and Fitness Computers and Electronics Health Pets and Animals Travel Education & Communication Hobbies and Crafts Philosophy and Religion Work World Family Life Holidays and Traditions Relationships Youth
Browse Articles
Learn Something New
Quizzes Hot
Happiness Hub
This Or That Game
Train Your Brain
Explore More
Support wikiHow
About wikiHow
Log in / Sign up
Finance and Business
Business Personnel
Recruitment

How to Write a Job Justification

Last Updated: August 26, 2023

This article was co-authored by Michael R. Lewis . Michael R. Lewis is a retired corporate executive, entrepreneur, and investment advisor in Texas. He has over 40 years of experience in business and finance, including as a Vice President for Blue Cross Blue Shield of Texas. He has a BBA in Industrial Management from the University of Texas at Austin. This article has been viewed 375,284 times.

A job justification, sometimes called a position justification or job proposal, is commonly used in academia and in public sector jobs. This documentation helps flesh out why a newly created or previous position is important to a given organization. You may write a job justification to get your boss to hire a new employee; however, you may also write a justification to encourage your boss to promote you to a new job.

Job Justification Template

Making Decisions

Think about the function of the job. Do you need someone to proofread articles for a magazine you're writing? That person could be called an editor or a copywriter.
How much responsibility will this person have? If they will be answering to a higher up editor in the department, maybe the position title could be Junior Copywriter.

Make sure you can justify why this position is necessary. You may, for instance, feel that establishing this job will help the company cut costs. Let's return to the Junior Copywriter position. If your company hires a great deal of freelance writers, and pays them by the hour, they may have to edit their own work. If your company had a copywriter, whose salary was slightly less than a freelance writer, writers would not work as long. But don't stop there: there are other justifications besides cost. This may include a lower cycle time so that articles appear in print faster, higher quality by ensuring proper grammar and content, etc.
Figure out a fair salary. Whether you're outlining a job for yourself or someone else, you want to make sure the salary you propose is reasonable. Spend some time researching the average salaries for similar positions. Keep in mind starter salaries are low, so you can aim to propose a salary or pay rate on the lower side of average.
Review your company's budget. You want to know how this position will be paid for. If the positions eliminates some costs, estimate how much money will be saved. You can put that money into a budget for the new position. You can also find areas where your company has excess money, which they may occasionally put towards new job openings. See if you can use some of this money to fund a new position.

Writing Your Letter

Pick a letterhead. If you're writing a justification for yourself, you should use the same letterhead you use for your resume. This will keep things consistent when submitting your materials. If you're writing a justification for a position within your own company, use the letterheads typically used for office memos and other business related writing.
At the top righthand corner of your letter, write your name, your address, the date, the address of the business, and the name of the letter's recipient.
Make sure you choose a proper salutation. If you're addressing a group of people, you can address all of them by their appropriate name and title and then add a colon. For example, "Dear Dr. Shepherd and Dr. Fox:"

Step 2 Begin by stating the benefit to the company.

You can start by identifying an inefficiency or problem in the company that may need a solution. The consequences of the problem should be spelled out in detail, whether these are higher costs, poor quality product, etc. If there's a role you know needs filling, for example, you can point that out right away. You can also use some research here to backup your claims.
Let's look at another example. Say your company has a lot of data entry to do for an upcoming event. Those working in customer service have been doing data entry in their spare time, but given their other responsibilities there have been a lot of errors and the process is moving slowly. Point out that the data entry would get done quicker and more accurately with a specific individual responsible for the job. Also, keep cost in mind. Your boss is probably interested in cost effective changes. Note the customer service reps have been putting in a lot of overtime hours, and the cost of a temporary new employee would be much less than paying so much in overtime.
In the above example, you can do research on concentration. You may find some studies that say people work more efficiently and accurately when they concentrate on one task at a time.

Step 3 Describe the potential job in great detail.

List what tasks the job requires, and what kind of skill set is necessary. You should also outline if the job is fulltime or part time and how it pays. You may want to include a brief profile of the type of person you're looking to hire.
For example, "I propose we hire a part time data entry specialist to help with this workload. We need someone who's well-organized, pays close attention to detail, and has preferably had some data entry experience. This job would be great for a college student with a somewhat flexible schedule. We could pay this new employee an hourly rate, somewhere in the range of $10 to $13 an hour."

Step 4 Outline why you are the right person for the job, if you're proposing a job for yourself.

List your experience. Talk about what your background is, briefly overviewing your education and career experience. This is similar to a cover letter. Only include experience relevant for the job you're proposing. If you're proposing to do market research for a non-profit, definitely talk about your marketing internship for a local refugee center in college. However, it's probably unnecessary to disclose that you waited tables over the summer, unless the skills learned apply to the proposed job.
You should also list any specific awards or achievements. This can be particularly helpful for an academic job. For example, if you're proposing you teach a new art history class at a university, you might want to mention any articles you've had published, grants you've received, or other honors you've obtained.

Ideally, some of the costs should come from the money saved. If a chunk of overtime pay is no longer being given to customer service representatives, some of that money could go towards paying a new employee. A part-time employee at an hourly rate will cost much less overall than multiple full-time salaried employees receiving overtime pay. Make sure you clearly quantify just how much money they would be saving with this change.
Try to focus more on how much money your company will save, in addition to non-financial benefits. Using the above example, you could write something like, "Not only will this change save our company an estimated $2,123 a month, I believe it will boost morale. Without the stress of data entry, customer service reps will have more downtime. This will allow them to be more upbeat with customers. Less stress and higher job satisfaction leads to a better performance."

Reiterate the points you made previously. In a few sentences, wrap up the main benefits of the position and talk about how it's necessary for the company.
Talk about how you'll be in touch. Say you'll call later in the week to follow up, for example, or request a business meeting with your boss to further discuss the position.

Revising Your Letter

Give yourself some time. You're more likely to catch typos if you set your work aside for a few days. If you don't have a few days, try setting it aside for an hour and then rereading.
Print out your letter. Changing the format from which you're reading can help you better check typos. If you don't have a printer, consider changing the font type or color. You can also try reading your letter from the last paragraph to the first.
Force yourself to reach each word by placing the tip of a pencil against the screen or page. Reading your letter out loud can also help you focus on each word.

Step 3 Have a friend look over your letter.

Expert Q&A

Anticipate objections. In some circumstances, the job justification process is fairly routine, and position requests are rarely denied. In others, there may be political or economic pressures that create push back. Finding out up front what objections may be raised can help you prepare an intelligent, thoughtful response that ensures that the needs of the organization are met. Thanks Helpful 0 Not Helpful 0

↑ https://owl.english.purdue.edu/owl/resource/653/01/
↑ https://money.usnews.com/money/blogs/outside-voices-careers/2011/07/01/how-to-create-a-one-page-job-proposal
↑ http://www.quickanddirtytips.com/education/grammar/10-tips-to-banish-typos

About This Article

To write a job justification, start by picking a job title, which will succinctly define the scope of the position. Choose a professional letterhead, and begin your justification by writing a few sentences on how the position will benefit the company. Then, describe the position in detail, including the responsibilities, ideal candidate, required skills, and expected pay. If you're proposing a job for yourself, include a final paragraph about why you're the ideal candidate for the job and a call to action for hiring someone to fill this need. For tips from our business reviewer on revising your letter for clarity, scroll down! Did this summary help you? Yes No

Send fan mail to authors

Reader Success Stories

Janet Wright

Jun 6, 2016

Did this article help you?

Jan 1, 2017

Feb 14, 2017

Featured Articles

Watch Articles

Terms of Use
Privacy Policy
Do Not Sell or Share My Info
Not Selling Info

wikiHow Tech Help Pro:

Level up your tech skills and stay ahead of the curve

Alumni Engagement with Career Services
Graduate Students
Undergraduate Students
Online Students
First Generation
International Students
Create a Resume / Cover Letter
Expand Your Network
Explore Your Interests / Self Assessment
Negotiate an Offer
Prepare for an Interview
Prepare for Graduate School
Search for a Job / Internship
CareerBound
Business Analytics
General Management
Human Resources Management
Integrated Business & Engineering
Supply Chain Management
Undergraduate Outcomes
Graduate Outcomes
Labor Market Insights
Our Mission, Vision and Values
Undergraduate Advising Team
Graduate Advising Team
Employer Recruitment Team

How to Write a Job Proposal (and Land the Role You Want)

Share This: Share How to Write a Job Proposal (and Land the Role You Want) on Facebook Share How to Write a Job Proposal (and Land the Role You Want) on LinkedIn Share How to Write a Job Proposal (and Land the Role You Want) on X

A job proposal is a detailed document, typically three to six pages, that outlines why you’re a good fit for a role. It’s different than a cover letter in that it’s typically not a part of a formal application process.

A job proposal is something you write and share with the hiring manager, or another contact you’ve made at the organization, either to get your foot in the door or to secure a job after a round of interviews.
You can also use this technique if you already work at a company and want to transition laterally, be promoted, or propose an entirely new role.
Your proposal should include: Why you want the role and why you have the skills and experience to add value. It should also signal how deeply you have thought about the organization, its needs, and how to address them.
It’s typically best to send it to a direct contact at the organization, either along with your thank-you notes after an interview, or to a recruiter or employee you’ve connected with via LinkedIn.

We've detected unusual activity from your computer network

To continue, please click the box below to let us know you're not a robot.

Why did this happen?

Please make sure your browser supports JavaScript and cookies and that you are not blocking them from loading. For more information you can review our Terms of Service and Cookie Policy .

For inquiries related to this message please contact our support team and provide the reference ID below.

19 Facts About Tim Walz, Harris’s Pick for Vice President

Mr. Walz, the governor of Minnesota, worked as a high school social studies teacher and football coach, served in the Army National Guard and chooses Diet Mountain Dew over alcohol.

Share full article

Gov. Tim Walz of Minnesota, in a gray T-shirt and baseball cap, speaks at a Kamala Harris event in St. Paul, Minn., last month.

By Simon J. Levien and Maggie Astor

Published Aug. 6, 2024 Updated Aug. 9, 2024

Until recently, Gov. Tim Walz of Minnesota was a virtual unknown outside of the Midwest, even among Democrats. But his stock rose fast in the days after President Biden withdrew from the race, clearing a path for Ms. Harris to replace him and pick Mr. Walz as her No. 2.

Here’s a closer look at the Democrats’ new choice for vice president.

1. He is a (very recent) social media darling . Mr. Walz has enjoyed a groundswell of support online from users commenting on his Midwestern “dad vibes” and appealing ordinariness.

2. He started the whole “weird” thing. It was Mr. Walz who labeled former President Donald J. Trump and his running mate, Senator JD Vance of Ohio, “weird” on cable television just a couple of weeks ago. The description soon became a Democratic talking point.

3. He named a highway after Prince and signed the bill in purple ink. “I think we can lay to rest that this is the coolest bill signing we’ll ever do,” he said as he put his name on legislation declaring a stretch of Highway 5 the “Prince Rogers Nelson Memorial Highway” after the musician who had lived in Minnesota.

4. He reminds you of your high school history teacher for a reason. Mr. Walz taught high school social studies and geography — first in Alliance, Neb., and then in Mankato, Minn. — before entering politics.

5. He taught in China in 1989 and speaks some Mandarin. He went to China for a year after graduating from college and taught English there through a program affiliated with Harvard University.

We are having trouble retrieving the article content.

Please enable JavaScript in your browser settings.

Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.

Thank you for your patience while we verify access.

Already a subscriber? Log in .

Want all of The Times? Subscribe .

Politics latest: New poll makes grim reading for Farage - as PM tells COBRA meeting to 'maintain high alert'

Sir Keir Starmer stressed the need to "maintain high alert" for more disorder as he chaired another emergency COBRA meeting. Meanwhile, new polling suggests support for Nigel Farage has plummeted since the unrest began last week.

Thursday 8 August 2024 20:55, UK

PM stresses need to 'maintain high alert' for further unrest
But says swift sentencing of rioters should be 'important lesson'
Labour councillor arrested on suspicion of encouraging murder
Farage accused of helping spread conspiracy theories
London mayor 'astonished' by Tory leadership hopeful's comments
Listen: How well has the PM handled riots?
Mhari Aurora: Starmer can't be sure he's out of woods just yet
Darren McCaffrey: Farage may struggle to have his cake and eat it
Explained: Robert Jenrick and the Allahu Akbar row | What does 'two-tier policing' mean - and does it exist?
UK riots latest: Follow updates on arrests and sentences

Our political correspondent Darren McCaffrey has spotted some interesting polling about Nigel Farage.

According to YouGov, the Reform leader's favourability ratings have fallen since the start of the riots in the UK.

He is viewed unfavourably by every voter group in the UK except Reform backers.

This includes Leave voters - his score with them going from +7 to -4.

The proportion of 2024 Tory voters that have a negative view of him has risen from 52% to 61% - and 47% of the public believe he holds some responsibility for the rioting.

Farage under fire from multiple sides

Darren said: "I think he's trying to strike this balance between trying to lean into some of the causes potentially behind at least the protests, if not the violence, but at the same time trying to condemn them.

"The question is, can he have his cake and eat it? Can he effectively walk that fine balance?"

Mr Farage questioned the initial police response to the stabbing in Southport, accusing them of withholding information.

The Reform leader has since condemned the violence on the streets - but made allegations of " two-tier policing ", claims which have been denied and criticised by the prime minister and Met Police chief.

Mel Stride, the Tory leadership hopeful, was heavily critical of Mr Farage this morning when speaking to Sky News - and it could be that more Tories come out to attack him.

With yet another COBRA meeting in the bag for the prime minister, the Politics Hub is signing off for the evening.

For continued coverage of the response to the riots, including the latest arrests and court hearings, check out our dedicated blog below:

As things stand, the Politics Hub won't be running tomorrow, so any political news, reaction, and analysis relating to the unrest will be in the above blog - do follow along for the latest updates.

Thanks for joining us today, and have a good evening.

Sir Keir Starmer has told his ministers and police chiefs they need to "maintain high alert" despite last night's anticipated wave of far-right unrest failing to materialise.

Sky News understands that was the PM's main message from tonight's COBRA meeting - his third of the week.

Sir Keir thanked the police and wider criminal justice system, saying the high levels of policing in key areas last night helped deter rioters - as did the swift sentencing of those convicted so far.

The prime minister has condemned a "deeply concerning" rise in antisemitic incidents in the UK this year.

Charity CST, which is dedicated to protecting Jewish communities, reported almost 2,000 cases in the first half of 2024 - a record high.

There were at least 200 every month - something which had only happened five times prior to October 2023.

That marks the point that Hamas launched its brutal attack on Israel, which was followed by the now 10-month bombardment of Gaza.

Sir Keir Starmer thanked the CST for its work and said: "Jewish people, and all those from faith communities, deserve to feel safe on our streets.

"We will work together to eradicate discrimination of any kind."

While last night didn't see the unrest many had feared, tonight's COBRA meeting comes ahead of what ministers fear could be days of further protests and disorder.

Sir Keir Starmer has vowed he will not "let up" so far as responding to threats from those bent on violence, and has held talks with police chiefs again this evening to discuss what could happen.

Our crime correspondent Martin Brunt has reported there are fears the new football season kicking off this weekend could spell trouble.

It comes after policing minister Dame Diana Johnson told Sky News earlier that intelligence points to more potential protests.

Read more from our political reporter Alix Culbertson 👇

We've been reporting in the Politics Hub today on the arrest of a Labour councillor over comments he made at one of the counter-protests that took place around the country last night.

First came footage from the event, which appeared to show a man calling for "fascist" rioters to have their throats "cut".

Nigel Farage was among those who shared it, and called on police to arrest the man responsible.

He was named online as Dartford Labour councillor Ricky Jones, and the party moved quickly to suspend him.

We then heard from the Met Police, who said they were urgently investigating the video - and later came an arrest on suspicion of encouraging murder.

For the full story and where we've got to as of tonight, our political reporter Faye Brown has you covered 👇

Sir Keir Starmer was in the West Midlands earlier before returning to London for tonight's COBRA meeting.

The PM visited a mosque in Solihull, and has just put out a post on X thanking local leaders he met there - and the police - for "keeping our communities safe".

Our team have spotted cabinet ministers leaving the COBRA meeting in the last few minutes, so hopefully we'll get an update on what was discussed from Downing Street before too long.

We'll bring it to you if and when we do.

By Faye Brown , political reporter

Metropolitan Police chief Sir Mark Rowley has knocked back claims of "two-tier policing" as "complete nonsense".

He said such claims - pedalled online by Nigel Farage and Elon Musk - put officers dealing with the ongoing riots at risk.

The phrase is used to describe the impression that some protests and demonstrations are dealt with more harshly than others.

What are the origins of 'two-tier' policing?

The term has been used to suggest police are more heavy-handed with people on the right of the political spectrum than the left.

Even before the current rioting in the UK, the idea was propagated by the likes of English Defence League founder Tommy Robinson, actor-turned political activist Laurence Fox, and former ex-minister Robert Jenrick.

Reform UK leader Nigel Farage summed up the sentiment when he claimed that "ever since the soft policing of the Black Lives Matter protests, the impression of two-tier policing has become widespread".

'Difference between riot and protest'

However, critics of those who have used the term say there is a clear difference between legal protests and the riots, which has seen mosques and hotels housing asylum seekers attacked, police officers hospitalised, and shops smashed and looted.

One of the strongest rebukes came from Dame Priti Patel, who was home secretary during the Black Lives Matter demonstrations in 2020.

She told Times Radio: "What we saw during the pandemic, we saw protest. We believe in free speech. We saw protests being policed.

"What we're seeing right now is thuggery and disorder and criminality. There is a complete distinction between the two."

What is the law on protests in the UK?

Protest is legal in the UK and the right to freedom of expression is also protected under the European Convention of Human Rights.

However, this only applies to peaceful protest and does not extend to any violence inflicted or damage caused during a protest.

As pointed out by Chris Hobbs, a former Special Branch officer writing for the Police Oracle website , arrests have been made at pro-Palestinian protests when there has been suspected criminal offences, as has been the case during climate protests and BLM demonstrations.

Prime Minister Sir Keir Starmer is banking on the rapid sentencing of convicted rioters putting people off committing more disorder.

There have been more arrests today - not just over the violence we've seen over the past week, but also inaccurate information about the Southport attack shared online.

False claims about the suspect helped ignite the riots.

People have been sentenced today, too - some to several years in jail.

For the latest on the response of the police and the courts, head to our dedicated live blog:

The unrest of the past week has seen members of the far right target Muslim communities and mosques.

It's reignited calls for the government to adopt an official definition of Islamophobia, with the hope it could help educate sections of the public and clamp down on violence and abuse.

Rishi Sunak's government refused to adopt one, suggesting it could negatively impact freedom of speech, and instead referred to cases of "anti-Muslim hatred".

And it appears the new government won't be quick to adopt one either.

Asked directly on Sky News if it would consider one, communities minister Alex Norris danced around the question.

'Still people out there who want to cause disorder'

"Our focus is on the next few days," he said, adding there'll be "plenty of other things we can look at" when the risk of more unrest has passed.

Mr Norris said while there are "still people out there who want to cause violent disorder", the government's focus is on ensuring police "have the powers they need" and that "swift justice" can be delivered.

We've spotted cabinet ministers and police chiefs arriving for tonight's COBRA meeting in Whitehall.

Met boss Sir Mark Rowley and Justice Secretary Shabana Mahmood are among those we've seen.

The meeting, chaired by Prime Minister Sir Keir Starmer, will discuss what happened last night and what may still be to come - the government has suggested more protests could be in the offing this week.

We'll bring you updates from the meeting whenever we can.

Be the first to get Breaking News

Install the Sky News app for free

IMAGES

Business Justification Sample For New Hire
how to write a letter of justification
how to write a letter of justification
Business Justification Template
Business Justification Template For Software
SAMPLE BUDGET JUSTIFICATION

COMMENTS

How to Write a Business Justification
A business justification is produced by an internal team of specialized analysts who determine what's needed to enact the proposal. They are tasked with getting permissions, finding supporters, researching relevant publications and finding an audience for the proposal to ensure its success.
How to Write a Business Justification
As an entrepreneur, small business owner, or an up-and-coming manager, there comes a time when you have to make a decision that requires funding, or has broader implications on your business. This is where a well-constructed business justification can be your most powerful tool. Not to be confused with a business plan, a business justification is a clear, concise, and evidence-based document ...
Business justification
A business justification serves as a guide for the project team, outlining the scope, objectives, deliverables, and key stakeholders for the project. It also helps to identify potential risks and contingencies, and outlines a plan for mitigating them. It also helps to secure the necessary resources, including funding and personnel, for the project.
Business Justification: What It Is and How to Write One
A business justification is an important document that can help you to secure the resources you need to undertake a project or activity. By following the tips above, you can write a business justification that is clear, concise, persuasive, and realistic.
IT Project Business Justification Guide with Examples
This package contains a complete guide to information technology project business justification - with detailed guidance on feasibility analysis, economic justification, and special considerations - a template to create a business case and detailed examples of this framework used to justify major IT initiatives. Excellent Read!
How to Write a Justification Section in a Proposal Template
How to Write a Justification Section in a Proposal Template The justification section in a proposal template is a crucial component that explains the reasoning behind the proposed plan or solution. It provides a clear and persuasive argument for why the proposed project or initiative is necessary and how it aligns with the goals of the organization. Whether you are writing a business proposal ...
Business Justification in Project Management: Definition ...
What is business Justification in Project Management? Business justification in project management is a process of evaluating justified reasons and significant benefits of a particular project before initiating it. The entire business justification process is the systematic assessment of how well the project aligns with the organizational goals.
PDF Sample Project Justification
The justification statement should include 2 to 3 paragraphs that convey the relevance of the over-arching topic in which the proposed research study is grounded. The purpose of this project is to examine the personal perceptions and safety concerns of workers in assumed low-risk. organizations.
How to Write a Business Plan (Tips, Templates, Examples)
Want to learn how to write a business plan? We've jam-packed this article with the examples, templates, and tips you need.
Top business justification methods
Top business justification methods: In your business case, it is necessary to include all the basic and essential information, but how do you communicate and justify this in an effective way and make the idea stand out?
Writing the Project Justification section in a Proposal Template
In conclusion, the project justification section in a proposal template plays a critical role in making a compelling case for the necessity and significance of a project. By clearly defining the problem, outlining the objectives, highlighting the benefits, justifying resources, addressing risks, and aligning with organizational goals, a well ...
How to Write a Business Case (Template Included)
Writing a business case can seem like unnecessary paperwork in today's business culture, but it could save you time and money. Learn how.
Business Justification: Why everyone should understand ...
A useful introduction to the basics of building a business case will center on the four main ways that projects are justified (Compliance, Cost, Profit, and Performance), together with one key ...
Business Justification and the Project Lifecycle
Business justification demonstrates the reasons for undertaking a project. It answers the question "Why is this project needed?" Business justification drives all decision making related to a ...
How Do You Write A Business Justification?
Writing a business justification is one of the most important tasks an employee in your organization can do. If you're ever asked to produce one, you need to be familiar with it! Writing a business justification is like writing any other type of essay. A good business justification uses arguments and examples to prove its point.
How to Calculate ROI to Justify a Project
Understanding how to calculate the ROI for a project will help you make better business decisions and allocate resources where they offer the best returns.
Business Justification Techniques in Scrum
This justification process commences prior to the initiation of a project and is consistently validated throughout the lifecycle. Business justification is determined by means of the following three steps: Present and Evaluate a Business Case - A project is generally evaluated and approved by the Product Owner.
How to Write the Perfect Business Plan: A Comprehensive Guide
Thinking of starting a business? Here's the best step-by-step template for writing the perfect business plan when creating your startup.
How to Make a Justification Step by Step?
How to Make a Justification Step by Step? The Steps to make a justification In a correct way are: describe the problem, establish the reasons for it, create a base of support to demonstrate your need and finally discuss the budget.
Justifying a Project Through Analysis
Project justification is a three-step project analysis process that aims to describe the problem, analyze your organization's ability to recognize and solve it, and present a feasible solution. Justifying a project means the following: Propose a solution to the problem related to the business environment. Determine alternatives or options to ...
Project Justification
Developing a business case involves creating a comprehensive document that outlines the justification for a project. It includes an analysis of the project's objectives, benefits, costs, risks, and alternatives.
Business Plan Offering Example
A small business plan offering example revolves around the goods or services you plan to offer to the public or other businesses.
How to Write a Job Justification: 12 Steps (with Pictures)
A job justification, sometimes called a position justification or job proposal, is commonly used in academia and in public sector jobs. This documentation helps flesh out why a newly created or previous position is important to a given organization. You may write a job justification to get your boss to hire a new employee; however, you may also write a justification to encourage your boss to ...
How to write an effective business plan
Wondering how to write a business plan, including common mistakes to watch for? Check out our guide for all the details.
How to Write a Job Proposal (and Land the Role You Want)
A job proposal is a detailed document, typically three to six pages, that outlines why you're a good fit for a role. It's different than a cover letter in that it's typically not a part of a formal application process.
Violent, racist attacks have gripped several British cities. What
Rioters carry out violent, racist attacks across several British cities. What happened, and what comes next?
UK Says Musk's 'Civil War Is Inevitable' Post Is Unjustified
UK Prime Minister Keir Starmer's administration hit out at the suggestion by the billionaire Elon Musk that Britain is heading for civil war after a week of riots sparked by the murder of three ...
19 Facts About Tim Walz, Harris's Pick for Vice President
19 Facts About Tim Walz, Harris's Pick for Vice President. Mr. Walz, the governor of Minnesota, worked as a high school social studies teacher and football coach, served in the Army National ...
Politics latest: New poll makes grim reading for Farage
Politics latest: New poll makes grim reading for Farage - as PM tells COBRA meeting to 'maintain high alert' Sir Keir Starmer stressed the need to "maintain high alert" for more disorder as he ...

How to Write a Business Justification

Call Out the Problem You Solve

List the Alternatives

List the Positive Possible Outcomes

Weigh the Risks

Assess Scope and Impact

How to Write a Business Justification

Step 1: Define Your Objective

Clearly State Your Justification's Purpose

Step 2: Gather Relevant Data and Information

Identify the Key Data Points

Research Industry Standards and Competitor Activity

Step 3: Analyze the Costs and Benefits

Assess Financial Implications

Calculate the Potential Return on Investment

Step 4: Present the Business Case

Organize Your Justification

Use Evidence to Strengthen Your Case

Step 5: Anticipate and Address Potential Concerns

Identify Potential Objections

Provide Counterarguments

Step 6: Summarize and Conclude

Recap the Main Points

Emphasize the Benefits and Potential Outcomes

Not logged in

The role of business justification

Example structure of business justification

Example business justification for a project

Benefits of business justification

Limitations of business justification

Other documents necessary in early project stage

Table of Contents

User page tools

Other projects

Business Justification: What It Is and How to Write One

How to write a business justification

Tips for writing a business justification

IT Project Business Justification Guide with Examples

Don’t Miss These Related References:

Signup for Thought Leader

Join The Largest Global Network of CIOs!

Business Justification in Project Management: Definition, Example, Methods

What is business Justification in Project Management?

Why is it important?

Key Components of Business Justification

Top business justification methods

1. Net Present Value (NPV)

2. Cost-Benefit Analysis

3. Return on Investment (ROI)

4. Market Analysis

5. Payback Period

How do I write a business justification?

Steps capture how business justification is determined

Tools and Resources for Business Justification

Kevin D.Davis

Upcoming Project Management Batches & Dates

Free! 5-Day Challenge - Find & Validate Your Ecommerce Idea!

The best advice in entrepreneurship

Tips to Make Your Small Business Plan Ironclad

How to Write a Business Plan FAQs

Be Professional and Legit

Know Your Audience

Invest Time Researching

Stay Realistic

How to Write a Business Plan—6 Essential Elements

1. Executive Summary

2. Business Overview

3. Products and Services

4. Market Analysis

5. Competitive Analysis

6. Financial Strategy

Startup Business Plan Template (Copy/Paste Outline)

5 Frame-Worthy Business Plan Examples

Get to Work on Making Your Business Plan

What financial information should be included in a business plan?

What are some common mistakes to avoid when writing a business plan?

Who should review my business plan before I submit it?

Ready to Write Your Business Plan?

About Jesse Sumrak

Related Posts