The goal of business development is to implement a wide range of strategies, and programs to improve the business and its bottom line. If you are in the business development or planning to switch to that field, you need to know everything about its fundamentals . You can learn how to develop a business from fundamentals here.
What is Business development?
It is difficult to define in a nutshell; There are 101 ways to define it. Simply put, business development is the collection of ideas, and activities aimed at improving the performance of a company. Increasing revenue, expanding the business, increasing profitability through strategic partnerships, and making strategic business decisions are just a few examples. It is also all about building relationships to improve your business.
Sales, marketing, project management, strategic programs, product management, and vendor management are all examples of business development activities. Also included are networking, negotiations, business partnerships, business expansion, and cost-cutting efforts. Further, business goals drive these distinct divisions and activities. But they frequently overlap and misunderstood as the sole function of business development.
The following information gives insight into the integrity of developmental activities, what it entails, and the standard practices and principles that govern business.
Successful growth of the business
Successful business affects every aspect of the organisation, including sales, marketing, manufacturing, human resources, accounting, finance, product growth and sales management. For example, a business has a product or service that is successful in a geographical area. The team in charge of business development evaluates the possibility of further expansion. It determines that the product or service can expand in a new region after conducting research and analysis in that region.
Let’s look at how goals of the company growth relates to various business functions and segments.
Sales and Sales Management
Salespeople concentrate on a specific market or a specific set of clients, often with a specific revenue goal in mind. In this context, let us assume business development team estimates that sales in a particular region could reach 1 billion dollars in three years. With such specific objectives, the sales department will have to tailor their sales strategies in that market to achieve the estimates.
In addition, to achieve sales objectives, Marketing greatly helps. It actively involves in promotions and advertisements aimed at successfully selling products to end users. Business development programs can allocate an estimated marketing budget. The allocated budgets could be high or low depending on the resources of the company. For example, high budgets allow for aggressive marketing strategies such as personal visits, road shows cold calling, and free sample distribution. On the other hand, low budgets lead to passive marketing strategies such as limited advertising, social media advertising and billboards, etc.
Is it better to go it alone and clear all the necessary formalities to enter a new market? Or would it be better to form a strategic alliance or partnership with a local company already operating in the area? The business development team inquires into such issues. In collaboration with legal and financial groups, they weigh advantages and disadvantages of various options and chooses the one that best suits the company.
You need a business plan for launching a product, or entering a new market or for market expansion and such other business activities. Is it necessary to open a new facility in a new market in order to expand your business? Or should all products be manufactured in the base country and then imported into the target market? Is there anything else that needs to be done in the base country for the latter option? All such information becomes a part of a business plan. The business development team makes these decisions based on their development and time-related evaluations. The project management or the implementation team then takes action to achieve the desired result.
Management of products
Regulatory and market requirements differ from country to country. For example, a specific composition of medicine may be permitted in your country, but may not be in another country. So, is a customised or entirely new version of the product required for the new market if you are wishing to enter that market? As determined by the business strategy, these requirements guide the work of the product management and manufacturing divisions. As part of a business development plan, the business development team reviews expenditures, gets legal approvals, and plans for regulatory commitments and vendor management.
Some business ventures may require mastery of soft skills. For example, lobbying may be necessary to penetrate the market. Also, you need other soft skills, such as networking and negotiating with various third parties, such as vendors, agencies, government officials and regulators . These programmes are a part of the business development process.
Improve the bottom line
Business development requires the ability to make strategic decisions that improve the bottom line, which includes cost-cutting measures.. An internal assessment that exposes the high cost of travel, for example, may lead to changes in travel policy, such as hosting video conference calls instead of on-site meetings or choosing less expensive modes of transportation.
Management can implement similar cost-saving programs by outsourcing non-core work such as billing, accounting, financials, technology operations and customer service. The strategic partnership required for these programs is a part of business development.
High-level decision making is based on a realistic assessment of all potential changes in business development and their impact. Through new ideas and programs, it aims to improve overall business opportunities that enhance the performance of various business segments. It’s not sales; it’s not marketing; It’s not sharing. Instead, it leads to the overall growth of the entire business and the ecosystem that comprises its various segments.
What does an entrepreneur need to know?
An entrepreneur needs to be aware of new market opportunities, expansion opportunities, competitor development, and the company’s current revenue sources. They also need to know:
- Current status of the business in terms of SWOT analysis- strengths, weaknesses, opportunities and threats
- Current status of overall industry and growth forecasts
- Competitor Consequences
- Basic sources of sales / revenue from current business and dependencies
- Customer profile
- New and undiscovered market opportunities
- New domains / products / sectors that are eligible for business expansion that may complement existing business
- Long-term feedback, especially in relation to proposed programs
- Viable options for cost areas and cost-saving
What drives business promotion activity?
Because of the wide-open scope of business development and operations, there are no standard methods and principles. From exploring new opportunities in external markets to introducing capabilities in internal business operations, everything fits under the business development umbrella.
Those involved in business development should come up with creative ideas, though their proposals may prove impossible or unrealistic. It is important to be simple. Employees charged with the growth of the business should try to look for constructive criticism and remember that this is a process.
Important Points to Remember at the end
The goal of business development is to implement a wide range of ideas, activities, and programs by the owner and management in order to improve the business. To achieve the best results, informed minds must be willing to adapt to change. Every positive or negative response is a valuable lesson that will help you prepare for the next challenge.
Source of images : all the infograhic images are developed by the author.