The Importance of Business Development
In its most basic form, business development may be defined as the ideas, efforts and actions that help a company grow. This involves generating sales, expanding the firm, enhancing profitability through strategic alliances, and making strategic business decisions. The book The E-Myth Revisited by Michael Gerber shows how to build a Business Development Process, its parts, and how to make them work together. So, what is Business Development?
Learn the Fundamentals
Sales, marketing, project management, product management and vendor management are just a few of the departments involved in business growth. There are also networking, negotiating, cooperation and cost-cutting measures. All of these many departments and operations are motivated by and linked with business development processes.
For example, a company may have a successful product or service in one location, such as the United States. Then the company development team evaluates possible future growth. After careful consideration, investigation and analysis, it is determined that the product or service may be expanded to a new location, such as France.
Salespeople concentrate on a certain market or a specific client, generally with a specific revenue goal in mind. In this scenario, business development evaluates the French marketplaces and finds that $1.5 billion in sales can be attained in three years. With such goals in place, the sales department uses its sales methods to target the consumer base in the new market.
Marketing entails promotion and advertising aimed at successfully selling things to end users. Marketing aids in the achievement of sales objectives. An expected marketing budget may be allocated as part of a business development strategy. Increased marketing budgets enable for more aggressive marketing methods such as cold phoning, personal visits, roadshows and free sample distribution. Lower marketing expenditures typically result in passive marketing methods such as restricted web advertisements, print ads, social media ads and billboards.
Will it be better to enter a new market on your own by completing all necessary paperwork, or will it be more prudent to build a strategic alliance or collaboration with local enterprises already functioning in the region? The business development team, assisted by legal and financial teams, examines all of the advantages and drawbacks of the available alternatives and chooses the one that best serves the firm.
Regulatory regulations and market needs differ from one country to the next. For example, a medication with a given composition may be permitted in India but not in the United Kingdom. Is a tailored — or entirely new — version of the product required for the new market? As determined by the company strategy, these requirements drive the activity of the product management and production divisions. A company growth plan evaluates cost considerations, legal permissions and regulatory conformity.
What You Should Know
Because company development entails high-level decision making, the business developer should be aware of the following:
- SWOT analysis of the current situation of the firm (strengths, weaknesses, opportunities, and threats)
- The present situation of the industry and future growth estimates
- Competitor advancements
- Primary sources of contemporary business sales/revenues and dependence
- The client demographics
- Market prospects that have yet to be discovered
- New domains/products/sectors, with the potential to complement the present firm, that are eligible for business expansion
- The long-term perspective, particularly in relation to the activities suggested
- The cost areas and potential cost-cutting strategies
This article is part of our Business Coaching blog series. At Dataczar we talk to a lot of small businesses. We’ve found a few books that we keep recommending time and again. To better help our customers, we’ve added a Reading List for Small Businesses to our website. We encourage every small business owner to read and keep these timeless business books on their office shelf.