At some point, small-business owners discover that having a great product and service isn’t enough. The key to sustained growth is business development.
“The reality is that customers don’t magically come to you,” says Nicolas Sharp, CEO and founder of Attio, a customer relationship management company. “Business development, consisting of various proactive strategies to grow your business and boost revenue, is crucial for the survival of any small business.”
For Erin LaCkore, founder of handcrafted jewelry company LaCkore Couture, a business development strategy is vital to her company’s success.
“Business development is my secret sauce,” she says. “The process helps me find fresh opportunities, reach new customers, and dream up innovative ideas to shine in the competitive market.”
What Is the Difference Between Business Development and Sales?
Business development and sales are often thought of as interchangeable, but there are distinct differences between the two.
“When it comes to business development vs. sales, it’s important to understand that while they are related, they are distinct functions within a company,” says Kay Gowrinath, founder and managing director of Xquisite Productions, a full-service design and production company.
“Business development involves a broader set of activities focused on identifying growth opportunities, market expansion, and forming strategic partnerships,” says Gowrinath. “The process also includes tasks such as market research, strategic planning, lead generation, and relationship building. Sales is focused on converting leads into customers and closing deals.”
Business development and sales are complementary and work together, adds Jessica Panetta, founder and CEO of Prosper Allied Health, which assists health professionals with starting their own businesses.
“Business development focuses on the big picture by targeting and implementing strategic moves to ensure company growth,” says Panetta. “On the other hand, sales represent the transactional aspect of business that occurs as a result of the strategic plans developed through business development.”
“Business development is an ongoing process that requires strategic thinking, relationship-building, and adaptability." —Max Shak, owner, nerDigital
How Do You Hire a Qualified Business Development Manager?
In the early stages, you are likely to be overseeing your company’s development. As your business grows, you may find that you can’t keep up with the process on your own. In that case, it may be time to consider hiring a qualified business development manager. This specialized position requires a candidate with specific qualities and experience.
“When hiring a business development manager, look for someone who is a big-picture, strategic thinker, but also gets the nitty-gritty of analysis,” says LaCkore. “You want someone who can do a SWOT (strengths, weaknesses, opportunities, and threats) analysis in their sleep, understands your industry and competition, and can charm the birds from the trees to build beneficial partnerships.”
Consider looking for the following additional qualities in your business development new hire:
- Creativity. “Unconventional thinking is what drives growth,” says Stoyan Mitov, CEO and founder of Dreamix, a tailored software development company. “A good way to assess analytical and creative thinking skills is to conduct a theoretical test. Prepare a description of some real-life cases within your company and ask the applicant for the best ways to respond.”
- Emotional intelligence. “Effective communication and negotiation skills are a must to build relationships, establish partnerships with potential clients and other businesses, and to close deals,” says Gowrinath.
- Attention to detail. “An effective candidate should be able to conduct research and analysis to support data-driven decision-making,” says Panetta. “For example, I use market research tools like Google Analytics and Semrush to make evidenced-based business development decisions.”
- Forward thinking. Whomever you choose for the business development position needs to be able to foresee the effectiveness of potential strategic partnerships and intuit trends in your industry. This will allow for effective long-range planning.
How Do You Create an Effective Business Development Strategy?
As with any company initiative, it’s important that you develop a game plan. Without one, it can be difficult to generate leads and direct your business growth.
Clearly define goals and objectives regarding big picture items like revenue goals, market expansion plans, and intended new partnerships.
“Without a clear sense of where you need to go, you’ll never get to where you want,” says Sharp. “The goals need to be actionable, measurable, and as specific as possible.”
Additional steps to business development include the following:
Identify your target market.
Given the fact that business development tends to be a long game, it’s vital that you try to target those prospects that will move your business forward. Do market research to discover your ideal customers and what they want.
Analyze your competitors.
Take a good look at your competition. Determine what makes your company stand out and above your competitors. Highlight this competitive advantage when you reach out to prospects.
Seek new business opportunities.
Pinpoint the most promising opportunities for business growth. This could include adding to your product line, reaching out to new prospects or increasing brand awareness. Once you’ve identified objectives, determine steps to achieve them.
Identify channels.
With your objectives in mind, decide your preferred methods for achieving your development goals. For instance, will you use networking, referrals, paid advertising, content marketing, or a combination of all four?
Draw up a plan.
Clearly outline the steps you’ll take to reach for and obtain business development opportunities. Include your target audience and your methods for reaching them.
How Do You Assess Business Development Opportunities?
Not all growth opportunities are worth embracing. It’s important to know how to evaluate possibilities. Start by ensuring that the business opportunity aligns with your business’s goals, mission, and values.
“If you’re potentially entering a new market, thoroughly understand the business landscape first, including the price points, competitors, and barriers to entry,” says Sharp. “Similarly, if you’re considering a new partnership, it’s important to analyze the financials of the other company: their revenue, profitability, cash flow, and overall financial health.”
Also perform a risk assessment, adds Mitov. “Determine if you have the resources needed to achieve success with the new business opportunity and if you are prepared to handle unexpected difficulties that may arise,” he says.
“In addition to analyzing potential financial metrics such as return on investment (ROI), consider factors like customer service levels or alignment with your existing service offerings,” says Jason Smit, CEO of Contentellect, a content provider. “Doing advance research into potential partners will allow you to gain insight into whether they could offer value in addition to monetary gains.”
How Do You Execute a Business Development Strategy?
Executing an effective business development strategy can require employing a multi-pronged approach.
Set clear objectives and communicate them.
“Make sure your plans are adequately communicated to the team members responsible for execution and provide employee training if necessary,” advises Panetta.
Define measurable goals for business growth.
Be transparent and specific about your goals and share them with those involved in your company’s business development efforts.
Identify target markets.
Understand the target audiences that can help you reach your goals and identify potential markets for expansion.
Do a competitive analysis.
Analyze competitors to identify gaps in the market. Then develop a plan for mining and filling those gaps.
Leverage existing relationships.
Explore opportunities with existing customers and partners. How can you make the most of these relationships to meet your goals and objectives?
Allocate sufficient resources.
Business development won’t occur in a vacuum, says Ilia Mundut, founder and CEO of HeftyBerry, an online store for home and garden designs. “To be successful, ensure sufficient resources (time, money, personnel) are allocated to business development efforts,” Mundut says.
Refine processes based on feedback.
“I do a quick check-in with the development team one week post plan deployment,” says Panetta. This gives her the opportunity to make adjustments early on.
Be consistent and adaptable.
“We continuously track the progress of our initiatives, making adjustments as needed to stay aligned with market dynamics,” says Max Shak, owner of nerDigital, a digital marketing company. “This produces results. For example, we proactively reached out to potential clients in a niche market, which resulted in several successful partnerships.”
See it through.
It's easy to get distracted by the next big plan, but without follow through and adequate oversight, even the best plans can crumble, resulting in loss of company resources, says Panetta.
LaCkore agrees: “Executing is about striking a balance between patience and speed. For us, it meant diving into social media and sharing our story on platforms where our audience hung out. The growth was gradual, but it was consistent.”
Business Development Strategy Takeaway
Having a strong business development strategy for your business can support significant growth for your company. When thoughtfully executed, a plan can be a great revenue driver and build valuable brand recognition for your business.
“Business development is an ongoing process that requires strategic thinking, relationship-building, and adaptability,” says Shak. “By staying vigilant, seizing opportunities, and fostering meaningful connections, small businesses can unlock their full potential in today's competitive landscape and thrive.”
A version of this article was originally published on May 23, 2013.
Photo: Getty Images
