Your business case needs to be detailed enough that management can see what you’re planning to do, how much it would cost, and what the benefits would be. To write this kind of robust document, use the following strategies:
Action 1: Involve the right people
Getting the right people involved in from the start will add strength and credibility to your document. Who might they be? Finance or procurement staff can advise on budgets and contractual issues; marketing staff can communicate the benefits of energy efficiency improvements for your company’s brand; and site managers will help you understand any operational issues at play.
Unsure who to talk to? Use your company’s regular communication channels – like team meetings or internal newsletters to get input on your proposal.
Action 2: Target the key decision-makers
Remember, everyone’s priorities are different: to gain support for your business case, you’ll need to understand who the key decision makers are and how to get them interested in energy efficiency. Speak face-to-face to get the best results, and always try to use both internal drivers (i.e., saving money) as well as external drivers (corporate reputation, customer feedback) to build your case.
Action 3: Link your business case to current business priorities
Managers in SMEs often deal with many competing priorities and may not want to see time and effort put into projects that don’t deliver on current business priorities. One job of your business case is to effectively link the case for energy efficiency with what is deemed a current business priority.
Can you do any of the following?
- Align the project with other organisational goals, targets and programs – piggyback on whatever is ‘hot’ within the business right now.
- Use new compliance requirements to bring a new focus on energy efficiency.
- Solve an existing problem through an energy efficiency project?
- Propose low or no-cost initiatives is funding is difficult to access.
- Use a site expansion project to ‘design in’ energy efficiency.
- Look for the most efficient options when procuring new equipment.
- Build energy efficiency into any business procedures which are up for review?
Action 4: Tackle the question of risk
All change brings risk: your job when building the case for energy efficiency improvements is to persuade management that any potential risks of your project have been considered, and can be appropriately managed.
Ideally, by delivering a good result from an energy efficiency perspective your project will also reduce a range of high level risks in the business: this is important to highlight.
What kinds of risk will you need to consider?
Financial risk: Every project presents a level of financial risk. Management will be concerned about whether the funds requested for the project will be sufficient to deliver the project. They will also want to have confidence that the expected level of savings and other benefits from the project will be achieved.
Strategic risk: Typically, businesses have a range of projects competing for money and attention. It is important to show that your project is justified financially as well as delivering on other corporate goals.
Operational risk: Operational risk will be of particular concern where new technology or practices are involved. Likewise, safety is a major consideration in all organisations. If your project does involve potential safety issues you will need to demonstrate that you have conducted a safety assessment and that the identified risks can be appropriately managed.
Tips for managing risk.
- Conduct a stakeholder analysis on your project to see which areas of risk might be an issue for the company.
- Use trials to build an understanding of potential risks and how they can be managed. These can test deeply held “assumptions” about whether perceived risks are legitimate or not.
- For every project risks you identify, come up with a strategy to mitigate it.
Action 5: List costs and benefits
Including all of the benefits in your business case proposal can have a significant influence on whether you obtain support for your project.
Where benefits are difficult to quantify or cannot be easily be translated into financial savings, describe them as clearly as you can. Make sure you also demonstrate that you are considering the project from a ‘whole of business’ perspective.
What benefits should you consider including?
Start by considering the full range of possible project costs and benefits. These may include:
- cost reductions – as well as energy, consider costs and benefits associated with repairs and maintenance, reduced water use, reduced waste charges, material inputs or labour costs.
- salvage value of surplus assets – if equipment is no longer required and can be sold.
- avoided or deferred capital expenditure – in cases where reduced energy consumption creates spare capacity.
- productivity improvements – where energy supply is a constraining factor, or if modifications increase plant output.
- product quality improvements – for example where the project reduces variability in production or improves comfort levels in a building.
- greenhouse gas emission reductions.
- There may also be other benefits that are important but more difficult to quantify, such as:
- occupational health and safety improvement – examples include reducing heat or steam from processes or improving access to daylight and natural ventilation in buildings.
- increased security of supply – minimising reliance on external fuel supplies or site-based generation.
- regulatory approvals – energy efficiency improvements can demonstrate that the organisation has sound processes in place.
- corporate reputation with external stakeholders – energy efficiency projects provide a clear demonstration of commitment to reducing greenhouse gas emissions and can help to achieve greenhouse gas reduction targets.
- improved staff morale – energy efficiency projects can generate benefits for employee satisfaction, improve the ability to attract and retain employees and achieve ‘employer of choice’ status.
Action 6: Get funding
Not every project requires funding—but if yours does, you’ll need to know where to look.
Ask your finance manager if operational expenditure funds (used to fund ongoing costs) would be available, or if you’d need capital expenditure funds (good for a one-off item that will generate business income in the future: note, these are harder to access). Are there any other options where funding could lie—perhaps you are eligible for an external grant?