A solid business development strategy is 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 it will vary according to each 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. Types of business development strategies include relationship building, market expansion, and brand awareness campaigns.
Those who work within business development assess a company’s performance and seek ways to improve the company’s growth prospects. Unlike salespeople who work directly with individual customers to close immediate deals, business developers take a big-picture approach that positions the business for long-term success.
Why Is Business Development Important?
Business development acts as the thread that ties together all of an organization’s functions or departments, helping a business expand and improve its sales, revenues, product offerings, talent, customer service, and brand awareness.
Unlike salespeople who work directly with individual customers to close immediate deals, business developers take a big-picture approach that positions the business for long-term success.
There are several key areas that can help affect change and promote growth across departments. Here are four reasons why business development is important:
- It can build essential relationships. Whether cultivating new talent, networking with prospective partners, or courting potential customers, relationship-building is integral to the business development process. A savvy business developer can concentrate 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 strategic hires. Moreover, nurturing existing relationships can yield repeat business.
- It’s a key strategy for boosting revenue and lowering costs. Successful growth is the end game of business development, and one of the most common metrics for measuring that growth is the bottom line. Business developers devise strategies to maximize revenue while minimizing costs. This focus can help an organization identify which markets and products have the most profit potential and which deals to chase first. In addition to keeping costs down and profits up, business development strategies aim to identify areas of growth, as well as the funding needed to facilitate such expansion.
- It can help improve the company’s overall image. A business developer can play a pivotal role in strengthening a brand, by helping to develop marketing campaigns that speak to the company’s target audience while reaching new customers and markets. For instance, smart business development strategies require a nuanced understanding of a company’s offerings as well as its customers. These insights then can be used to help inform campaigns that guide potential customers to products and services which 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 may look different to 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.
Startups, midsize companies, and large, mature organizations each require a different approach to business development:
- Startups: For a new company, laying a strong foundation is critical to its survival and growth. A startups' business development strategy focuses 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, as this can give the team and their clients an opportunity to celebrate what they’ve accomplished.
- Midsize 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 established offerings to further its growth by enhancing and adding products, and seeking out new markets and investment opportunities. Whereas founding team members may have carried out business development duties during the startup phase, now is the perfect time to find a dedicated person to fill this role. That can 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 and often achieved through clear communication and demonstrating value. Business development in this stage also focuses on expanding business relationships as well as identifying ways to run internal operations 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 sharp business development plan can help your organization identify its goals and generate a list of tasks for your team 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. For example, a strength could be a unique product offering, while a weakness might be limited geographical reach. A SWOT analysis can help you determine where you stand in the market.
Next, choose a metric to measure the company’s success. In addition to tracking revenues, the business could gauge its growth based on leads generated, number of employees, geographical footprint, or new customers. For example, a tech startup might be more interested in user acquisition, while a retail chain might look at the number of new store openings.
Finally, determine who will be responsible for business development. To make sure you have the right person to carry out this essential role, consider growth-minded individuals who are not only capable of seeing the big picture, but also skilled at networking, building relationships, closing sales, and negotiating.
The Bottom Line
Many successful companies make business development a priority. Having your company set out to create its own business development strategy may put your organization in a strong position to grow and, ultimately, thrive.
A version of this article was originally published on February 06, 2020.
Photo: Getty Images
