Business case for construction projects

Revision as of 12:28, 20 April 2012

In the very early stages of a project, a preliminary business case should be prepared. This is then developed into a detailed business case for the preferred option after feasibility studies and options appraisals have been carried out. The detailed business case is the document that will be put to the project board, seeking executive authority for the preferred option to progress to the next stage (concept design).

Preparing a business case may require input from independent client advisers (such as management accountants, business development advisers, facilities managers etc).

A business case may include:

• Confirmation that the project is compatible with the client's stated vision, mission and objectives.
• An assessment of the support for the project.
• Confirmation that feasibility studies have been completed, the appropriate options have been explored and a preferred option identified.
• Confirmation that the project is likely to deliver its business goals. These goals should be prioritised and should be testable so that the developing and completed project can be tested against them.
• Confirmation that the proposal is affordable, achievable and likely to deliver value for money.
• Confirmation that the scope and requirements are realistic, clear and unambiguous.
• Confirmation that appropriate advice has been obtained.
• Confirmation that market conditions have been properly considered.
• Identification of major risks and possible mitigation.
• Identification of third party dependencies and necessary consultations.
• Assessment of the likely need for the appointment of a consultant team or independent client advisers.
• Assessment of long term investment prospects.
• Assessment of procurement options.
• Statement of design intent.
• Schedules of critical dates (some of which may be beyond the control of the client):

1. Planning committee meetings.
2. Key holiday dates.
3. Client board meetings.
4. Spending budgets.
5. Competition coming to market.
6. Grant entitlements.

• Projected financial forecasting:

1. Projected balance sheet.
2. Cash flow projection.
3. Project expenditure.
4. Income (or savings) projections.
5. Projected profit and loss accounts.

• Plans for the next stage.

See also

• Preliminary business case
• Cost plans
• HM Treasury: Business Case Guidance.
• HM Treasury: Green Book, a framework for the appraisal and evaluation of projects.