- Practice · 5 marks
Developing a viable business case
Short answer
A business case justifies an investment by presenting the problem, solution, market, costs, and benefits. The idea is viable when it is desirable, technically feasible, financially profitable, legally acceptable, and a good fit for the team.
What is a business case? Explain the factors that decide whether a business idea is viable.
A business case is a structured argument showing that an idea is worth investing in, by stating the problem, the proposed solution, the market, the costs and the expected benefits. An idea is viable if it can earn enough to sustain itself and reward the investor.
Contents of a business case
- Problem and target customer
- Proposed product or service and its value
- Market size and competition
- Operating and technical requirements
- Investment, revenue and profit forecast
- Risks and how to reduce them
Viability tests
| Test | Key question |
|---|---|
| Desirability | Do customers really want it? |
| Technical feasibility | Can we build and deliver it with available technology and skills? |
| Economic viability | Does revenue exceed cost with an acceptable return and payback? |
| Market viability | Is the market big enough and reachable? |
| Legal and ethical | Are licences, safety and environmental rules satisfied? |
| Founder fit | Does the team have the skills and commitment? |
If any test fails seriously, the idea is modified or dropped before heavy money is spent. A feasibility study done early saves cost.
Answer: A business case justifies an idea through problem, market, solution and finance; the idea is viable when it is desirable, technically feasible, financially profitable, legal and suited to the team.
✓ Answer checked by Claude Opus 5.5 (high effort)
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