This question came up in a workshop the other day! Many want to rush to a full blown business case once they think they hear a good idea. However, we know that a business case requires a great deal of resources – money and time. This rush to business case takes time away from new product concepts that are already proven. Nine out of ten ideas fail to produce a profit. How do we know that the idea is “the one”?

An idea may be a very good one but we do not actually know that until a number of questions have been asked and answered. Think back to the new product development process. Does our idea fall under any of the opportunities/markets that we have identified as ripe for change? Does the proposed idea/product solve a customer problem? Is the idea/product technically feasible? And from a “preliminary” business case analysis is the idea/solution/product economically feasible?

When I say “preliminary” business case I am talking about a one page rough estimate of cost to produce, value to the customer, sales price, and potential value to the company. That is it. A preliminary business case should not require more than eight people hours to produce.

During stages 1 and 2 of the new product development process our investment is minimal. Only when a new product idea has successfully moved to stage 3 Concept Evaluation due we begin our investment of time and money in the idea and conduct a comprehensive business case as one of the “tests” to determine if the idea should move on to the Development stage.