What is Business Development?
Business development professionals commonly hold different definitions of business development that are often influenced by their specific role and experiences. One widely agreed upon definition of business development is the process of utilizing relationships, markets, and customers for long term organizational value formation.
Breaking down the definition of business development and analyzing the factors contained within it is a great way to gain a more comprehensive understanding of the entire business development process. By doing this, professionals can also secure better comprehension regarding the role that business development plays in ensuring both business success and profitability.
The long term value produced from a business development strategy is compromised of virtually anything that is beneficial to a company. For example, while financial profit may be an obvious long term value category, brand reputation is also a long term value that necessitates consideration.
Understanding the differences between markets, relationships, and customers can help professionals to succeed in their respective business development plans and strategies. Customers include anyone that purchases a product or service from a company and a business's customer base is essential for both profitability and success.
A business's specific market can be defined in many ways, depending on factors ranging from geographic location to consumer buying power. Identifying and expanding business ventures into new markets and therefore to new customers is one way that companies use business development to succeed.
Relationships span from the associations a business has with its customer base to its own employees. Regardless of relationship type, trust and respect are absolutely essential for successful business development.
Business development strategy types range from cold calling to content marketing and are widely dependent on industry type and specific objectives. Likewise, a business's development team and development plan will vary based on its particular needs and wants.
Overall, the activities and strategies of business development aim to grow business ventures and produce long term value.
Note-: Business development is crucial for both a company's success and financial profitability.
The Importance of Business Development
Business development is the foundation for both long term business growth and profitability. Business development is also crucial for a variety of other functions ranging from sales management to brand reputation.
Prominent reasons that business development is important include an enhanced ability for corporations to-
1. Cultivate Relationships
Any successful business development process is dependent on carefully formulated and maintained relationships. Unsurprisingly, communication skills are necessary for a good business development plan.
Relationships included in business development can range from new customer acquisition to hiring top talent sales team representatives. While developing new relationships is important, companies must make sure to also appropriately sustain their existing relationships.
Remember-: A company should not neglect its current customer base while pursuing potential clients or new customers nor should they pursue new markets or new opportunities at the expense of long term business relationships.
2. Boost Brand Reputation
A primary role business developers undertake is to create and strengthen a company's brand. Brand development and maintenance are heavily dependent on a proficient understanding of the company's customer base in addition to all products or services offered.
There are many methods that business development professionals use during brand development initiatives. One commonly used brand optimization technique occurs when a business developer works with the content marketing team in order to generate a marketing strategy for a new customer base.
3. Discover Growth Opportunities
Identifying and expanding into new markets and new opportunities is a top priority of business developers. Business growth can be accomplished in a variety of different ways, from the release of a new product to lead generation strategy updates.
Due to the constant need to evolve and adapt to the ever changing market, business development has virtually endless potential to increase business success and profitability.
Stages of Business Development
Understanding the different stages of business development is essential for optimal business growth and profitability. Although each enterprise is different in its needs and objectives, business development stages are generally similar.
Overall, there exist some disagreements between business development professionals regarding the distinct stages of business development. However, the general structure of business development is compromised of the following stages-
1. Business Start Up
The start up stage of business development is often full of both anxiety and anticipation. During this stage, business opportunities and ideas begin to take a physical form.
Business management professionals engage in a wide range of activities during the start up phase. For example, business management professionals may spend the morning scanning a submitted cover letter while onboarding employees for their new business and the night hours cold calling in order to build a new customer base.
2. Business Growth
During this stage, companies generally begin to see the fruition of their business development initiatives. Business factors such as customer demand and cash flow should ideally be markedly increased in comparison with the initial start up stage.
While the growth stage brings new opportunities for companies, it also carries the potential for new problems. For example, an increase in customer demand may necessitate a business taking out larger loans to make sure they have sufficient inventory available, but of course, is accompanied by the risk of those new products not actually selling.
3. Business Maturity
The third stage of business development, business maturity is accomplished when an enterprise has settled into its position within the industry. At this point, a successful business has usually developed its customer base and brand.
During the business maturity stage, some executives choose to shift the primary responsibilities of business management to other owners. Transferring ownership allows these professionals to move on to new business ventures and new markets instead of staying stagnant at an already successful business they previously established.
4. Business Decline
There are virtually endless reasons that business decline occurs, ranging from a customer base maintenance failure to poor business management capabilities. In many instances, a combination of many factors results in the unfortunate consequence of business decline, failure, and eventual closure.
A significant warning sign that a business is declining is decreased profitability. Decreased profitability may be indicated by cash flow problems and significant debts owed by the corporation.
Benefits of Successful Business Development
Once development professionals have secured an understanding of the unique stages of business development they are better equipped to monitor their own. A good business development plan produces many benefits for an enterprise including-
1. Customer Relationships
Every business depends on its customer base for both its short term and long term success. In fact, the majority of sales that a company makes is not from their new customers but from their preexisting customers.
Business development professionals are recognized for their efforts in identifying and acquiring new customers but they also can learn a lot about their existing customers during these processes.
For example, while a development team is investigating new markets they could discover sales pipeline improvements that can be integrated into the sales process for a preexisting market.
2. Self Discovery
Business growth encourages novel ways of thinking and operating. Whenever a company enters a new market or creates a new product there is a new opportunity to develop its business strategy and values.
Part business management and part innovation, the self discovery produced by business growth help to make sure a business stays relevant and profitable.
3. Experimental Space
Similar to increased self discovery potential, business development invites innovations to everything from project management to content marketing processes. The experimental space provided automatically during business development can massively shift existing processes, for better or for worse.
The way that employees work together and the overall company culture can also change during business development. A successful business will likely see improvements to its company culture and the capacity for teams to work together effectively.
Bonus-: Business development can facilitate company culture and work environment improvements organically.
Business Development vs Sales
A common misconception is that sales and business development are terms that can be used interchangeably. In actuality, the sales process is a combination of the business development team and sales team working together.
Clarifying the similarities and differences between sales and business development is immensely helpful for everyone in the enterprise. Firstly, it is imperative that sales development is defined outside of the general definition of business development. Sales development is a specific category of business development and a unique sales role.
Both sales development representatives and sales representatives work together during the sales process. Sales development representatives are generally responsible for lead generation and sales representatives are generally responsible for closing the deal.
Business development representatives are focused on identifying new opportunities for accomplishing long term value. Business development representatives accomplish this in many ways including through recognizing new markets and new customers.
An advantage for enterprises is that employees can be trained for specific roles and career paths from their initial onboarding. For example, during onboarding, there may be a focus on business development skills for sales development representatives and an alternative focus on communication skills for sales team representatives.
Ultimately, the role business development performs makes sales possible, while sales contribute to business development. Though the two concepts differ in their objectives and responsibilities, they are both crucial for the success of the sales process overall.
Remember-: In order to accomplish business success sales development representatives and sales representatives need to work together efficiently.
How to Improve Business Development
Positive business development is invaluable for both company improvements and increased sales. Especially in an ever changing and competitive global market, business development allows a company to avoid the business decline stage for as long as possible.
Considering how crucial business development is for overall profitability and success, it is wise for enterprises to understand how to improve their own business development strategy and plans. Helpful tips for business development improvement include-
1. Network Better
There are so many more networking opportunities available than ever before for business development. Whereas cold calling may have previously been the primary way to get ahold of new customers now social media offers new avenues to connect.
A good business development plan should incorporate both social media and in person networking opportunities. Trade shows or industry conferences are great options for exploring new markets and new opportunities in person.
Another benefit of networking more efficiently is gaining a better understanding of competitors. Social media browsing can uncover valuable information on everything from a competitor's project management skills to their content marketing initiatives.
2. Increase Interactions
A common issue of cold calling for business development purposes is the lack of personalization. New customers want an increasingly individualized experience and expect more courting from businesses than ever before.
As a result, business development professionals are seeing the benefits of providing prospective clients with customized consultations and sales demos. Consultations can help both businesses and potential clients make sure that before proceeding further down the sales pipeline that they are a good match.
Both consultations and sales demos should focus on the needs and wants of potential clients instead of for the general market. Sales demos can be shared through a variety of communication channels, ranging from social media platforms to in person meetings.
3. Diversify Marketing
A company's marketing strategy and business development process must work together for optimal business success. In fact, a business development team can locate new marketing strategy opportunities and vice versa.
A company's marketing strategy may contain many different components including a content marketing team. The content marketing team is responsible for securing the attention of new clients and potential clients through relevant articles, blogs, videos, or even social media posts.
Remember-: When the marketing team and business development team work well together both departments benefit.
- Whether a small business or a large corporation, business development is crucial for success and profitability.
- From product development to project management, virtually all business processes are influenced by business development.
- The 4 stages of business development are start up, growth, maturity, and decline.
- Benefits of business development include improved relationships, innovation, and brand reputation.