Writing the business case for premises
Buying or leasing premises is a major decision for any group and the way in which you can lease, buy or mortgage premises should be described in your governing document.
In most cases you will require funding to support the ongoing costs of the premises or in larger projects the cost of the building and pieces of equipment – known as the capital expenditure. Funders will ask you to write a business case for the support you need. Each funder will have their own form for the business case that you will need to fill out.
You should be very clear from the start what is required from you to complete the business case fully. Some business case forms can be very detailed depending on how much money you need and for how long. You may require professional support from someone outside your group – an accountant, someone from a legal background or someone from a business background who has experience in completing business cases for funding.
Most business cases will ask you to outline the need for the premises, the costs, the benefits of having the premises for the group and the community and how the costs and project will be monitored over time to ensure that the money is being spent in the way it is supposed to.
The key thing is to answer every question on the form as fully as possible. It’s better to have too much information than too little when funders are reading your application.
Here’s some tips on completing the business case:
- Need: Describe what you need the money for and why it is needed. It is also useful to provide some information on what would happen if the project does not get the funding it needs.
- Options: You need to show to funders that you have considered a number of options and why you have gone for your preferred option. Outline any alternative options and provide an explanation of why these have not been considered any further. Include the cost associated with each option, why it was considered, its limitations and what you would expect to happen if the option was taken.
- Risks: Outline if there are any notable risks associated with the project and how you plan to avoid them or minimise the impact of them if they happen.
- Monitoring: Identify who will be responsible for monitoring the project and how the success of the project will be evaluated.
- Experience: Detail the experience and capacity within your group to manage premises and/or the purchase and renovate the premises if and when it is needed.
- Financing: Outline how the project will be financed over time. Include details on your fundraising plan and how you will cover the costs of running the premises over time (known as the sustainability plan for the premises).
- Costs and benefits: Outline the cost for the premises. Include if possible an explanation of how this cost was estimated e.g. from previous experience. It is also a good idea to outline if they are any monetary benefits to be gained from the project eg saving money over time.
Download the simple cost table template from the Resources section as a starter. It has columns for 3 years. Insert more columns for additional years.