So you’ve finally decided to chase that lifelong dream and launch your own business. Or perhaps, you’ve acquired a business loan and are looking for the most efficient ways to allocate your funds. If either of these scenarios sounds familiar, it’s probably time to start considering hiring a business developer.
If you plan on taking care of business development yourself but are unsure of how to get started, you might have some trouble finding a sufficient definition for business development in your standard dictionary. Instead, business development is an entire, multifaceted process, often performed by people with specific degrees in things like management, sales, and marketing.
However, there is nothing stopping you from seeking your own understanding of business development. In this article, we’ll cover the basics so that you can make smart choices to ensure your business is as strong as it can be. In fact, taking the time to inform yourself on all aspects of business development may be one of the most useful steps you can take in your entire journey as a business owner.
What is Business Development?
At its absolute core, business development is the initiative to grow your business. If you want to dig a little deeper, you could say that it is the method used to increase your business value by developing your relationships with allies, markets, and sales.
However, if you ask the question “What is business development?” (or biz dev as the cool kids say) to a room full of 100 business people, you are likely to receive a hundred different answers.
Business Development and Sales
Often, people define business developers and salespeople as one and the same. However, there are some key differences. While salespeople certainly work to grow your business, the scope by which business developers do so is much wider.
While salespeople work directly with your business’s customer base, successful business developers will affect every aspect of your business, from marketing to manufacturing to human resources.
However, there is a fair amount of overlap between the skills needed for both salespeople and business developers. Just as salespeople must excel at cold calling and setting up meetings with clients, developers must do the same with potential vendors, partners, or any other form of potential ally for your business.
Furthermore, your business developers’ ability to determine a target audience will help your sales team work more effectively and efficiently. While business developers don’t necessarily close the deal, their contributions to the sales process play a key part in eventually winning over customers. In the next section, we’ll cover some other essential skills necessary to flourish as a business developer.
Getting To Know The Skills
As mentioned above, getting the job done as a business developer involves having a variety of skill sets. While each business will require a uniquely tailored approach, some basic skills and universal skills to consider are:
- Project Management
- Data Analysis
- Financial Planning
Let’s take a closer look at each of these.
Like any project with a lot of moving parts, growing your business requires strong management in order to keep everything running smoothly. Things like opening a new location, merging with another business, and expanding into new markets involve lots of people and interpersonal relationships and are handled by your business development team. Business developers must be able to resolve conflicts, weigh the risks and benefits of a potential decision, and provide leadership for all of your team members.
Not only should a business developer be able to track your business’s finances, but they should understand how to allocate funds efficiently. For instance, if you are looking to expand, it may be up to the business developer to determine how to secure funding. The goal of the business developer or development team should not only be to generate sales but also to reduce your company’s bottom line. This involves being able to cut costs whenever possible.
Identifying excessive spending and coming up with solutions to these problems, such as limiting travel or outsourcing positions, will increase your business’s efficiency and improve revenue.
While being able to crunch numbers and make spreadsheets is all well and good, business development relies heavily on what are referred to as soft skills. Soft skills are more about how people behave rather than how much they know. Excelling at interpersonal communication is necessary in order to make deals with third-party vendors and lobby (when legally possible) with government agencies.
Not only are these soft skills important for building relationships with authorities and potential allies, but they will also come in handy when negotiating terms. Being able to acquire the best deals with vendors will help your business keep costs down while streamlining your sales funnel.
Another important part of the sales process is marketing, as it is the primary way that you will expose your company to your customer base. Business development initiatives determine how much money will be spent in marketing and how that money is spent.
In the case of smaller businesses that lack dedicated marketing teams, the task of marketing may fall into the hands of business developers themselves. It is then their job to build an engaging brand, find creative and effective ways to introduce the business to their customer base, and generate brand awareness and genuine interest.
While we mentioned the importance of soft skills, they most effectively work when complemented by hard skills. Hard skills are occupational skills and industry-specific knowledge, such as data analysis. Business developers must keep tabs on things like ROI (return on investment) and present relevant data to business owners to quantify the business’s performance.
Managing and communicating data such as the number of sales generated by a particular marketing campaign, merger, or other venture will guide the business’s trajectory and help inform more profitable decisions in the future. Furthermore, being able to analyze market data will help your marketing team develop an effective message and find their target audience.
Getting To Know The Lingo
As with any aspect of business, there is a fair amount of specific jargon that goes along with business development. Whether you are honing your own biz dev skills or looking to better communicate with your business development team, here are some key terms that you should familiarize yourself with.
In terms of business, value most often refers to money. However, things like prestige, access, and or really anything that contributes to your company’s growth can be considered value. Long term-value means that this value, whatever it may be, persists over a long period of time.
While making a quick deal that results in a sudden burst of cash may seem attractive, the key to business growth is maintaining a steady flow of value indefinitely.
Markets are used to group different kinds of customers. They refer to not only the geographic location of your customer but also the demographics that they fall into.
For instance, selling to customers in London means that you are accessing the “European Market.” However, if your business sells steering wheel covers, you would be selling to the “Car Owners Market,” which is not specific to a geographical location.
If your businesses decided that they wanted to expand into the bicycle owners market as well, they might start designing cutting-edge handlebar grips. It is up to the business developer to identify these markets and strategies when, when not, and how to expand into them.
A sales pipeline is the path a new lead takes to become a customer. From finding prospective leads to the negotiation process all the way to the eventual close, it is the business developers’ job to make the process as streamlined and efficient as possible.
Pipelines are also applicable to the acquisition of new vendors or partners. The effectiveness of pipelines is recorded and analyzed in pipeline reports.
Have a Plan
In general, while business development involves attention to essentially every detail of how the company functions, the aim is to have a solid, big picture, long-term plan. Being proficient in business development means making high-level decisions and being able to assess all possible outcomes of potential changes to the business.
If you plan on leading your business development team or taking the entire process on yourself, you’ll need vision, drive, and an ability to lead and work with a wide range of people in order to achieve a common goal. Writing a strong business plan will serve as a blueprint, allowing you to communicate your goals and your strategy to achieve them effectively.
Unlike more specific departments such as sales and marketing, business development is an entire ecosystem of various skills, divisions, and decisions. By familiarizing yourself with the material discussed above, you can ensure short-term success and long-term growth for your business.