Business development
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In the field of commerce, the specialist area of business development comprises a number of techniques and responsibilities which aim at gaining new customers and at penetrating existing markets. Techniques used include:
- assessment of marketing opportunities and target markets
- intelligence gathering on customers and competitors
- generating leads for possible sales
- advising on, drafting and enforcing sales policies and processes
- follow-up sales activity
- formal proposal or presentation management and writing
- pitch and presentation rehearsals
- business model design
Business development involves evaluating a business and then realizing its full potential, using such tools as:
- marketing
- information management (sometimes conflated with knowledge management)
- customer service
A sound organization aiming to withstand competitors never stops business development[citation needed], but engages in it as an ongoing process.
Successful business development often requires a multi-disciplinary approach beyond just "a sale to a customer". Some consultants[who?] frequently recommend a detailed strategy for growing a business in desirable ways, which may involve financial, legal and advertising skills. Business-development practitioners cannot reduce their activities to simple templates applicable to all or even most situations faced by real-world enterprises. Creativity in meeting new and unforeseen challenges may help sustainable growth.
Business-development roles may have one of two modes:
- sales-oriented (client-facing); or
- an operational function to support sales.
In a sales role, business development could concentrate on developing strategic-channel relationships or on general sales. This emerges from analysis of the varied job descriptions found in job-search engines, especially in the UK. In the US, the term "capture management" appears as an alternative job or role title, typically used when describing business development as an operational function to support the selling function of a company. The Association of Proposal Management have produced the Capture Management Lifecycle that describes the process in three broad stages:
- pre-bid phase
- bid phase
- post-bid phase
Small to medium-sized companies often do not establish procedures for business development, instead relying on their existing contacts. Or people in such companies may assume that because they know people in high places that this will solve any business-development problems and that somehow new financial transactions will come to them. Such thinking can have significant ramifications if one cannot exploit those relationships, which very often[citation needed] remain personal or weak. Such a situation may result in no new sales in the pipeline.
Business-development professionals frequently have had earlier experience in financial services, investment banking or management consulting; although many find their route to this area by climbing the corporate ladder in functions such as operations management or sales. Skill-sets and experience for business-development specialists usually consist of a mixture of the following (depending on the business requirements):
The "pipeline" refers to flow of potential clients which a company has started developing. Business-development staff assign to each potential client in the pipeline a percent chance of success, with projected sales-volumes attached. Planners can use the weighted average of all the potential clients in the pipeline to project staffing to manage the new activity when finalized. Enterprises usually support pipelines with some kind of CRM (customer relationship management) tool or CRM-database, either web-based (such as the salesforce.com software-as-a-service solution) or an in-house system. Sometimes business development specialists manage and analyze the data to produce sales management information (MI). Such MI could include:
- reasons for wins/losses
- progress of opportunities in relation to the sales process
- conversion (win) rates
- top performing salespeople/sales channels
- sales of services/products
For larger and well-established companies, especially in technology-related industries, the term "business development" often refers to setting up and managing strategic relationships and alliances with other, third-party companies. In these instances the companies may leverage each others' expertise, technologies or other intellectual property to expand their capacities for identifying, researching, analyzing and bringing to market new businesses and new products, business-development focuses on implementation of the strategic business plan through equity financing, acquisition/divestiture of technologies, products, and companies, plus the establishment of strategic partnerships where appropriate.
[edit] External links
- Small Business Development Center Network
- Small Business Administration - U.S. government web page on business development
- Institute of Small Enterprises and Development (ISED)
- Association of Proposal Management Professionals (APMP)
- Business Development Info Video Blog - for all types of Independent Contractors
