Develop Your Business Case

Overview

The AmbITion approach asks you to develop a business case for your digital development.

A business case is equally appropriate to not-for-profit organisations as it is for revenue businesses. In many cases an arts organisation may have a mix of funding and revenue generation.

A business case clearly states what it is that you are wanting to do, and why it will achieve your aims.

Although developing your business case is likely to result in a finished document (which may be part of a grant application or a request for funds to your board or trustees) the process should be a dynamic one, and you should continually test the fundamentals of your “business case”, at key stages in a project to see that it is still relevant, and that it is still achieving your aims.

The AmbITion approach asks you to take all the work you have done already, in auditing your organisation and diagnosing your needs, and begin to develop a business case for your digital development.

To accompany this section take a look at the guide we've created to creating your business case document: Business Case Outline.

What is a Business Case?

A business case should state clearly what you are wanting to do, why you are doing it, and what benefits it will achieve. It is the last of these, the “benefits” which is at the heart of a business case.

But the business case document might also include much more than that.

It could include :-

-       how you are going to undertake the work

-       a detailed budget

-       a detailed workplan including milestones and timescales

Developing a business case is a more formal planning process, that will allow you to take the information you gathered from the audit of your organisation, and the ideas that you generated through the diagnosis of your needs and present them in a clear way to your key stakeholders.

The Opportunity

If you are developing a business case it is because you are already well-advanced in your thinking around the need to develop digitally.

More than likely, you have an opportunity. This could be one or more of the following :-

-       a funding opportunity

-       a particular milestone (e.g. the Cultural Olympiad; a festival in your town)

-       the board or trustees has made funds available

-       a particular need (e.g. moving to a new building)

-       change of circumstances (e.g. a new chief executive)

-       as part of a regular review of your ongoing “business plan”

What are you Going to Do?

Through your audit and diagnosis of needs you will have identified the key areas that you want to develop digitally. These may include one or more pieces of work.

For instance, you may have decided that it is a priority to develop a new website. We will use this as an example throughout the following sections.

Developing a new website might be what you are going to do but the business case will help you justify your decisions. It might be that through developing a new website you also identify that you need better networking or computers, or that staff need training. In other words, you might want to include several different work packages within your business case.

The Benefits

Key to any business case are the benefits. After all, you have already put a lot of work in to deciding what it is your organisation needs, and you will need to justify the project to funders and other stakeholders.

Benefits can be many and varied, and will depend on the sort of organisation you are, and on the nature of your project.

If we go back to the four categories we identified in the diagnosis section of the AmbITion approach we can see how there might be a range of benefits, that are both “hard” (e.g. saving money, or increasing revenue) and “soft” (e.g. improving reputation, artistic quality).

Whereas an airline or a supermarket might be primarily interested in the “bottom line”, the stakeholders for the arts will include funders, artists, staff and audience, and you may be wanting to achieve a range of different benefits.

Let’s have a look at this simple table. For each of the types of project we have identified an example benefit.

TYPE OF PROJECT	BENEFITS
Organisational	More efficient systems providing staff with more time to work on developing the artistic programme of the organisation.
Artistic	An improved artistic programme which will enhance the profile of the organisation and lead to more funding opportunities.
Audience Development	Widening participation so that more local people are able to access our services increasing revenue, and proving our worth to stakeholders.
Business Development	Developing new revenue opportunities through new income streams, leading to increased turnover.

The “benefits” listed here are generic, as are the types of project. Something like a new website may primarily fit into the “audience development” category, however a good business case will identify all the benefits.

Developing a new website

Organisational benefits – the website will have a content management system which will allow staff to be able to regularly update the website with new content, rather than having to contact the web developer.

Artistic – there will be opportunities on the new website to showcase the work of local artists who are appearing at our venue, and this will allow us to enhance our role in developing the local artistic community.

Audience Development – our current website doesn’t allow people to sign up for a newsletter or receive regular updates on our work. The new website will make it easy to contact our mailing list about new shows as soon as they are announced.

Business Development – Currently our audience primarily contacts us via the box office, which is only open Monday 9-5, but the new website will have an online ticketing system, leading to increased sales.

Options Summary

Most business cases will include an options summary. This is a short paragraph that explains, not what you are asking to do, but why you chose this option rather than any others.

One of the options should always be “Do nothing!” – this option may appear to be risk free, yet for most projects, particularly digital ones, “do nothing” is the easiest one to reject. “Do nothing” may mean that you fall behind your competitors, or start losing audience, or fail to develop in line with the expectations of your audience.

The options summary can be simple and straightforward, or more complex. If it’s a large project (such as moving to a new premises) the options will probably all have been looked at and costed out. (e.g. refurbishment, co-occupation with another organisation etc.).

In digital developments the options summary should explain why you have chosen the particular route.

For a web development the options might be straightforward :-

- Do nothing!

- Redevelop existing website with current developer

- Appoint a web developer to develop the website in-house

- Design and specify a new website

You are not just comparing the costs of the various options, but the benefits that each option offers.

Budget Requirements

The budget is an important part of any business case. If you are applying for a grant you may be asked to provide a detailed budget. At some point in developing a business case you are going to need to find out how much the work is going to cost.

You might want to think of the following :-

-       salaries;

-       consultancy/project management;

-       specialist skills;

-       marketing & publicity;

-       technology (hardware & software);

-       training;

-       overhead;

-       contingency

A well-argued business case should include a budget that is as accurate as you can make it. Obviously there are constraints on funding for arts organisations, however, providing a reasonably accurate cost of a project will enable stakeholders and funders to weigh the benefits against the costs.

The aim of the AmbITion approach is to ensure that you are able to justify both the time and the investment in a digital development. In the past too many digital developments have taken place either because the funding was available or because “everyone is doing it”.

Going back to our website example, one organisation might be able to justify a £20,000 spend on a website, for instance, if it allows them to sell tickets online, whereas another organisation might be better having a smaller web budget, and spending the additional money on creating digital content for the web.

Resource Requirements

By the time you have identified the budget and are looking at the resource requirements of a project your business is quite highly developed.

Resource requirements may include staff time and availability, but may also include timescales and milestones. If you are a theatre for instance, you might need to programme a new show into your regular programme, or use a different venue.

By thinking of the resources at this stage you will have shown that you have considered the impact on your organisation, which brings us to “risks.”

Risks

Traditional project management techniques talk of “risk” and “issues.” An issue is something that arises during the course of a project, a risk is something that should be included in your business case, that you have already identified.

You shouldn’t be scared of identifying risks. The whole point of thinking of the risks on a project is so that when issues occur, you have already thought about an action plan, that will not derail the project.

A classic example would be from the theatre, where a leading actor goes ill. This is always an identified risk for any show, yet theatres mitigate this through having an “understudy” who can step in if, unfortunately, the identified risk happens.

When you develop your business case it is good practice to identify the risks to the project across broad categories:

Budget – this is an ambitious project for which we require the budget asked for. Because this budget comes from 2 different sources, if one or the other is not forthcoming then the project is at risk.

Time – the project needs to be completed in a particular timescale. Any delays in starting the project will impact on the delivery.

People – the need to hire (or keep) key staff is vital to the project.

Technology – the technology needs of the project should be appropriate for delivering the activity. If new technology comes in during the project we will need to reconsider the options.

For a useful resource in identifying the risks in our organisation, see our example: the AmbITion Risk Assessment template.

What’s Next

All being well, your business case will form the basis of your funding application or be agreed by your board. Once you have the go ahead you can begin your implementation.

The business case itself should then form the basis of your implementation planning and work programme. Remember, as well, that funders are likely to return to your business case to ensure that you’ve delivered the project that was agreed. You should review your business case at key stages of the implementation to ensure that not only is the work on track, but that the benefits you identified are still relevant.