A solid business development strategy can be integral to a company's growth and success. But if you ask a dozen different people, "What is business development?", you'll likely get a dozen different answers. That's because the role of business development evolves along with the company, and that role varies according to the company's size, maturity and priorities.
In simple terms, business development consists of the strategies and actions that contribute to the growth and value of a company. Relationship building, market expansion and brand awareness campaigns are all types of business development strategies.
Those who work within business development assess a company's performance and seek out ways to improve the company's prospects for growth. Whereas salespeople work directly with individual customers to close deals, business development consists of taking more of a big-picture approach and employing various tactics to position the business for long-term growth.
Why is business development important?
When it comes to organizational growth, business development acts as the thread that ties together all of a company's functions or departments, helping a business expand and improve its sales, revenues, product offerings, talent, customer service and brand awareness.
There are a number of key areas in which someone tasked with business development can help effect change and promote growth across departments. Here are four reasons why business development is important.
- It builds important relationships. Whether cultivating new talent, networking with prospective partners or courting potential customers, relationship-building is an integral piece of the business development process. A savvy business developer can hone in on the relationships that demand the most attention. Connecting with clients, colleagues and other members of one's network can be fundamental to identifying new business opportunities, generating leads and making critical hires. And, strengthening existing relationships will help deliver repeat customers, or provide an opportunity to hone and enhance talent from within.It's a key strategy for boosting revenue and lowering costs.
- It's a key strategy for boosting revenue and lowering costs. Growth is the end game of business development, and one of the most common metrics for measuring that growth is the bottom line. Key to the business development process is devising strategies to help increase the amount of money that's coming into an organization, while making sure less money is going out. Focusing on business development can help an organization identify which markets and products have the most profit potential, and which deals to chase first. Business development also entails making decisions that help keep costs down as well as identify areas of growth and the funding needed to facilitate such expansion.
- It can help improve the company's overall image. Marketing is vital to a business' growth, and a business developer can help an organization build a better brand. A business developer can work closely with the marketing team to develop campaigns that solidify the company's target audience and reach new customers and markets. A significant aspect of business development is understanding the inner workings of a company's products and services, as well as its customers. Business development leaders can use these insights to help inform new marketing campaigns that guide potential customers to products and services that could benefit them.
- It may open up expansion into new markets. Tapping into new areas of opportunity could be a lucrative growth strategy, and business development involves staying on top of market trends and opportunities. By analyzing demographics and customer data, a business developer can find ways to enter these markets and access new segments of customers.
Importance of business development at different stages of a company
A business development strategy for a five-person startup looks much different from a business development plan for a well-established company with 1,000 employees. That's because there are various stages of business development, and the specific functions therein differ according to a company's maturity and size.
Start-ups, mid-sized companies and large, mature organizations each require a different approach to business development.
- Start-ups. Laying a strong foundation for a new company is critical to its survival and growth. For startups, business development strategies focus on building that foundation by developing the best possible products and services, determining where the company fits into the market, identifying investors and funding sources, and assembling a dependable team. A business developer might also help orchestrate a launch event when the product is ready to go live to give the team and their clients an opportunity to celebrate what they've accomplished—building a completely new business from the ground up.
- Mid-size companies. After a business gains its footing, business development takes on a more impactful role. At this stage, the company is in a position to build on its hard work and established offerings to further its growth. Whereas founding team members may have carried out business development duties during the start-up phase, now is the perfect time to find a dedicated business developer to fill this role. Businesses in this stage can continue to develop by enhancing and adding products, seeking out new markets and investing in growth opportunities. A dedicated business developer can carry out these tasks and free up executives to focus on day-to-day operations and other managerial priorities.
- Large, established companies. Bigger, more mature organizations are able to draw from the resources and customer base they've built over the years, but they still need to look for new growth prospects. Growth during this phase of business development is all about ideas. Scouting out, incubating and executing new ideas—–from both inside and outside the company—can lead to innovation, new partnerships and better relationships with new and existing customers. Getting team members and customers to buy into these ideas is necessary to making this happen. Business development in this stage also focuses on expanding business relationships and identifying ways to conduct business more effectively and efficiently.
The value of a business development plan
Business development serves an important function for companies, and the results depend on the strategies a company chooses.
Crafting a well-thought-out business development plan can help your organization identify its goals and generate a punch list of tasks for your team to accomplish to help achieve growth.
Conducting a SWOT analysis is a good place to start. This means identifying the company's Strengths, Weaknesses, Opportunities and Threats. Consider what the business does well, along with its limitations, capabilities and competition.
Next, choose a metric by which to measure the company's success. In addition to tracking revenues, the business might also gauge its growth based on leads generated, number of employees, geographical footprint or new customers.
Finally, determine who will be responsible for business development. Consider growth-minded individuals who are skilled at networking, relationship building, sales and negotiating to make sure you have the right person to carry out this essential role.
Many successful businesses make business development a priority, and having your company set out to create its own business development plan may put your organization in a strong position to thrive.
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This article is intended for general informational purposes only and does not constitute legal advice or an opinion on any issue. It should not be regarded as comprehensive or a substitute for professional advice.