TL;DR If business development seems all too foreign to you, then this article will shed light to it. I’ve listed down 8 things you should know about BizDev and why it’s important for every organization.
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Hand up – who vaguely has an idea about BizDev?
If you raised your hand, that’s totally okay! You’re not alone.
Over ten years ago, I started a career in Business Development without a single inkling of what it was about. I had initially applied for an Account Manager position when HR offered me the role.
After hearing what it’s all about, I got fascinated and just said yes. And that very moment catapulted a highly rewarding career in Business Development.
A lot has been said about sales, marketing, finance and other areas of operation. But seldom do we hear about Business Development, in spite of its important role in the success of an organization.
So now I’d like to shed some light on what Business Development is.
I’m going to skip all the textbook definition and spare you the boring facts. Instead, I’ll pull from my experience and take a stab at describing it.
#1 – Business development is all about growing your business.
If there’s anything that Business Development boils down to, it’s business growth.
The term Business Development is actually reflective of what it truly means – it aims to grow the business.
This area focuses on:
- making the organization more competitive,
- creating and innovating products/services,
- looking into specific markets and growth areas, and
- seeing how the business will thrive in these areas, ultimately to drive more customers/clients towards the business.
#2 – Business development means being knowledgeable in your industry.
In business development, you need to keep yourself abreast of the latest news, updates, and trends in the industry your organization is in.
To grow the business, you’ll need to know:
- what your competitors are doing,
- which news may affect your industry,
- the key players in your industry,
- how you can leverage on trends,
- see what’s working for you and your competitors, and
- how you can position yourself in the context of all these things.
The best business development professionals stay knowledgeable about their industry by going out to conferences and trade shows and subscribing to news and industry portals.
#3 – Business development is about knowing people… the right ones.
When going to events, conferences and trade shows, business development professionals kill two birds with one stone. They learn updates and trends… and meet people.
They network. They introduce themselves and their organization to speakers, industry people, and potential customers/clients. (There’s a strategic way of doing this and I’ll cover this later on.)
They’re also constantly on the lookout on who their competitors are and what they’re doing. It’s important to know who they are so you can better position yourself and highlight what you can do that others can’t. Marketers call this the Unique Selling Proposition or USP. This is what sets your organization apart and make your brand stick to your target’s mind.
It’s also important to acknowledge what others are doing right or, in some instances, fail at so you’ll learn best practices and avoid the pitfalls.
(Note: there’s a right balance between knowing your competitors’ initiatives and playing your own game. You don’t have to focus too much on what others are doing or you’ll lose your organization’s core. More on this later too!)
#4 – Business development requires you to know who you’re targeting.
As a BizDev professional, you also need to know who your target customer or client is.
The success of an organization’s products and/or services relies on how well it addresses the target’s needs.
Your organization definitely needs customers and clients to grow; acquiring new ones is the role of business development.
But it doesn’t stop there – you also need to identify those that are the right fit for your business. And this is an even bigger (and more essential) ask for BizDev.
While it’s a numbers game, BizDev also needs to treat time as a valuable resource. You can’t just keep chasing numbers when you know that a potential lead doesn’t fit your ideal customer. The clearer you are about the people you want to target, the more effective you become in focusing on 20% of leads that lead to 80% of your revenue. (This is one of my favorite business principles, the Pareto principle, and you can read more about it here.)
There’s a way of knowing who your ideal target customer/client is – their aspirations, afflictions, pain points. And this can be done by defining what is called the “ideal customer avatar.”
My favorite way of defining the ideal customer avatar is how Amy Porterfield does it.
#5 – Business development is about qualifying leads.
Leads are your potential customer and/or client.
Apart from knowing who your ideal customer avatar is, qualifying leads involve other factors like the following:
Who is the lead?
Do they fit your customer avatar? Are they within your target industries?
Is the lead a legit business?
You could always check whether a potential customer is a legitimate business by checking the following:
- their website
- your country’s government agency for business registration
- if there are any adverse news or clippings about the company on Google
- LinkedIn page of the company, if any
- LinkedIn profile of key representatives
Is your company the right fit for their needs?
Do you understand their needs? Can your organization, products, and services provide a solution for their needs? Are their needs reasonable enough that it can be solved in a specific timeframe?
What is the timeframe?
Is the timeframe set by the customer reasonable for you? Can your organization deliver within the timeframe?
What is the budget?
Is their budget within your own pricing structure? Would you be flexible in your pricing to accommodate the client’s budget? Would you be okay with providing a product or service pro bono, perhaps in lieu of branding or including the client in your portfolio?
What is the size of the company?
Is the lead a high-ticket account? Is it a startup? Does this question even matter?
Who are you talking to?
Is the person you’re talking to the one who calls the shots? If not, would you be able to meet the decision-makers? Is there anyone else who you should be talking to from your client’s team?
#6 – Business development cuts across various areas.
Business development is often “mistaken” to be other areas of the organization – Marketing, Sales, Strategic Planning, Procurement, even Finance and Operations. But the reality is, it cuts across all these areas and have certain overlaps.
This may be the perfect time to define what Business Development is against other areas of the business, as well as where the overlaps lie:
Business Development and Marketing
Marketing is about understanding the target audience with the view of promoting a product or service. It could go from mass, guerilla tactic kind of approach to the ultra-granular and targeted marketing strategies for a niche group. It ranges from advertising – traditional and online – to public relations (media features) and influencer engagement. Its main goal is to broaden awareness about the company’s products or services and highlight its Unique Selling Proposition, what sets it apart from competitors.
Business development is all about building relationships. Compared to marketing, it tends to be a long game – establishing your credibility and building a strong foundation for a good working relationship with clients and customers – potential and current alike. It may have its own marketing initiatives, but with the view of establishing personal working relationships. This is why things like cold calling, personal visits and Customer Relationship Management (CRM) are essential parts of BizDev.
Business Development and Sales
Sales is a numbers game. Its laser focus is achieving the revenue/sales target. It tends to be more tactical and transactional, than strategic.
Business development, while after achieving targets, sees both quantitative and qualitative measures of success. It assesses whether a lead fits the overall strategy of the organization. BizDev looks beyond the current industries targeted by the organization and looks out for potential growth areas or sectors to engage.
BizDev also focuses on strategic partnerships and collaborations than just making the cash register ring. It treats partnerships as an essential element in expanding sales and enabling upsells and cross-sells.
For instance, when you play certain songs on Spotify, do you notice that some of them tend to have readily available lyrics? Well, you can thank Genius for that, which provides lyrics and background information on the song, singer and the writer. Genius has partnered with Spotify to expand its product and become more accessible to millions of Spotify’s customers.
Business Development and Strategic Planning
Strategic planning defines the general direction of the company. This involves looking at the last period’s sales and revenue performance and looking into new growth areas, target industries, and a solid financial plan.
While business development isn’t itself strategic planning, there’s more of an overlap than differences between the two. Business development also identifies new growth areas, list of industries to target, potential client list, other stakeholder groups to engage, revenue targets, potentially revisiting areas that didn’t work in the previous period.
#7 – Business development requires various skills.
Given that it cuts across different areas of an organization, the best BizDev professionals have most of the following skills:
- Research – Business Development is always on the lookout for trends, industry news, new people to engage and partner with, what the competitors are doing, best practices, among many others. So knowing where and how to find these things is an essential skill.
- Networking – When it’s time to put the research to use, knowing how to talk to people and engage strangers (read: potential leads) is of utmost resource. A good BizDev representative knows how to work their way to conversations and understand a lead’s needs.
- Promotions – Knowing how to position your organization and its products or services is key to the success of your marketing efforts. Knowing various marketing strategies and approach – more so how to talk to the target audience in various platforms – is an advantage.
- Negotiation – Contracts are part of a business development role. Before you could shake hands and clinch the deal, you need to be able to mold a scope of work and corresponding fees that work for both you and your customer. The same is true for finalizing partnerships and collaborations.
- Math and financials – BizDev works closely with the Finance department in shaping the best numbers for a particular scope of work. Being comfortable with numbers and familiar with accounting and finance principles can make BizDev a lot easier.
- Vendor management – Sometimes when you prepare financial proposals for prospects, you may need to engage third party suppliers. Vendors will provide products or services that are outside your usual offerings. It’s then important to know a few things about vendor management – identifying potential suppliers, negotiating their proposed costs, going through procurement processes (if applicable), managing and overseeing their deliverables, and many other things.
#8 – Business development is highly strategic.
Ultimately, BizDev aims to make the business better.
It’s not just chasing the number; it’s about engaging the lead that fits your organization and its offerings.
It’s mapping out the right stakeholders and forging collaborations that will expand the organization’s reach, portfolio, and revenues.
It’s about continuous improvements, innovation and looking beyond the “Business-as-Usual”.
And it’s tapping new markets that will maximize the organization’s potential for growth.
All these things go beyond tactical and transactional approaches. BizDev leverages on solid strategic thinking.
What do you think?
Do you know any other thing that Business Development does, perhaps what Bizdev professionals need to know in today’s business landscape?
Feel free to share them in the comments section below! I’d love to hear from you.
