When asked what business development means, the answer often turns to something related to the sales process.
Although new business development involves B2B selling, there is so much more for a business to consider. Our guide will show you how business development works, what it looks like in each department, and how to create business development goals for your business.
In a nutshell: how business development works
- Business development is a process of determining how you can improve your business, including its bottom line, financial position, reputation, and overall value.
- Business development involves more than just sales. Each department has a role to play in planning, deciding, developing and executing activities that help improve the business.
- Many of the goals associated with business development are also interconnected, as one goal can positively impact other areas of improvement in a business, generating even more value.
- Business development is different for every company due to variations in size, scope, focus, and overall strategic guidelines.
What is Business Development?
Business development is more than just a set of selling techniques and understanding how to be a good salesperson.
Instead, it’s an umbrella term for all of the ideas, business strategies, and departmental activities that go into improving a business and navigating through the stages of the business lifecycle.
That’s why sales growth and business expansion are just a few of the many potential business development goals, and why the whole company should be involved in the process.
For example, a company may focus its business development efforts on increasing revenue, which means sales and marketing, as well as product development, may be involved. For another company, business development may involve adding strategic partnerships or expanding into a new geographic territory or service.
With such a diverse set of goals, business development requires a wide range of skills. These skills include knowing how to develop a strategy, how to understand market needs and trends, how to close a sale, and how to nurture clients or customers.
What does business development look like in each department
From marketing, sales and product/supplier management to business planning, project management and finance, many departments are involved in business development.
The marketing department is responsible for attracting leads to help achieve the company’s goal of gaining exposure, expanding markets, and increasing revenue.
Working in conjunction with sales, marketing produces promotions, campaigns and content that illustrate why the company can solve problems for a targeted audience.
The sales team targets certain opportunities to add revenue through leads, market expansion, service/product development and diversity. They set certain objectives to be achieved within the framework of business development in connection with the overall strategic objectives of the company.
As such, the sales department establishes a commercial proposal for each prospect, sends a follow-up email to these prospects, and manages all the information they have on the market and the prospects, often via tools such as CRM software.
Product and supplier management
A significant amount of work goes into managing business development activities, especially when they span across geographic lines and involve markets and products. This work typically involves legal, product management, and manufacturing departments working together to ensure that business development in certain countries makes sense and goes according to plan.
This business development activity may also include assistance from external vendors. These vendors will need to be managed and led in order to effectively manage the supply chain and logistics issues that are critical to growing the business beyond its current size.
The business planning department often includes executives who need to make decisions about new facilities, manufacturing sites, and additional resources such as local talent to help with expansion efforts. They work closely with the project management and implementation teams who then execute what business planning decides.
Working with legal, finance, marketing and sales, and business planning, the strategic partnership is responsible for determining and identifying local strategic partnership candidates who can help achieve certain business development goals.
Finance plays a vital role in business development in terms of cost savings. In order to improve a business, it is important to look beyond the sales pipeline and consider what cost reduction measures can put the business in a better position to take advantage of available growth opportunities.
Finance undertakes internal assessments and audits that look at spending across the business to see where money can be saved on certain tasks and processes and then be better spent elsewhere to achieve certain business development goals.
The main objectives of business development
As you can see, regardless of department, function or role in a company, everyone is part of business development. To guide the type of work to be done, you will need to develop specific goals related to your focus on improving the business.
1. Increase profitability
Every business wants to earn a higher profit because it means more funds are available to reinvest in processes to achieve other business development goals. The extra money can be used to expand into new territories, create new products and services, and hire more talent.
As we mentioned earlier in this business development guide, one of the goals of improving profitability is finding ways to reduce operational costs while increasing revenue.
Therefore, your profitability goal might be to reduce rental costs by reducing headcount in a smaller office and allowing staff to work virtually while focusing on adding a number of new customers. . By addressing both areas simultaneously, you have a better chance of achieving this increased profitability.
2. Improve customer response time
The faster a business can respond to customer needs or address a complaint or question, the happier that customer will be. In turn, this could mean easily repeatable sales that generate revenue for business development goals. Or, this improvement could result in these customers telling others about their excellent experience, which would lead to new customer growth.
To improve customer response time, a company will first need to consider why this goal is even part of the business development strategy. Is the response time currently lagging because there are not enough customer service team members? Or is it a lack of training? Knowing the answers to why customer response time needs to be improved can then guide the tactics and quantifiable measures put in place to achieve that business development goal.
3. Improve operational efficiency
This business development goal focuses on improving certain aspects of operations that can boost the ability to further develop the business. By doing so, more results can be achieved in less time and with less money. This frees up time and money that can be spent prospecting elsewhere or used to invest in more salespeople.
A good example is the sales department – this can be a great place to look for ways to improve efficiency. Efficiency goals can involve improving the close rate of sales by a certain percentage or speeding up salespersons’ conversion/prospecting time by a certain number of hours. As part of the business development objective for operational efficiency, a specific timeline for achievement should also be included.
4. Develop business operations
This business development goal focuses on physically expanding your business so you can serve more customers. In this way, it connects to other goals such as increasing revenue and increasing profitability. You may also be able to achieve economies of scale through greater production and negotiate a better rate for materials due to the higher volume.
For example, your expansion goal might be to open a certain number of locations or enter a set number of countries over the next three to five years.
Spearhead of business development
Business development can mean many things to many people: sales, partnerships, customers, new products or services, or additional markets. And all of these things are correct interpretations.
Indeed, each of these meanings shares a common goal: business development is about creating long-term value for a company through continuous improvement.
This improvement may come from the type and number of customers or relationships, markets or territories, products or services or operational processes. Whatever you determine to be the most important area for long-term value is where you should focus your own business development efforts.