When you ask people what business development means, the answer is often related to the sales process.
New business development includes B2B sales, but there's much more that companies need to consider. Our guide explains how business development works, how it is done in each department, and how to create business development goals for your company.
Overview: How Business Development Works
- Business development is the process of determining how a company can be improved, including its performance, financial position, reputation, and overall value.
- Business development involves more than just sales. Every department has some role in planning, deciding, developing, and executing activities that help improve the company.
- Many of the goals related to business development are interrelated, as one goal can positively impact other areas of improvement within the company and add even more value.
- Business development differs from company to company due to differences in size, scope, objectives, and overall strategic direction.
What is business development?
Business development is more than just collecting sales techniques and understanding how to become a great salesperson.
Rather, it is an umbrella term for all ideas, corporate strategies, and departmental activities to improve the business and navigate each stage of the business life cycle.
That's why increasing sales and expanding your company are just some of the many potential business development goals that require the entire company to be involved in the process.
For example, a company may focus its business development efforts on increasing revenue. This means that not only product development but also sales and marketing may be involved. For another company, business development may include adding strategic partnerships or expanding into new geographic areas or services.
Because of this diversity of objectives, business development requires a wide range of skills. These skills include knowing how to strategize, understand market needs and trends, close sales, and develop customers and clients.
Business development of each department
Numerous departments are involved in business development, from marketing, sales, and product/vendor management to business planning, project management, and finance.
The marketing department is responsible for generating leads to achieve the company's goals of increasing awareness, expanding markets, and increasing revenue.
Marketing works with sales to create promotions, campaigns, and content that explain why your company can solve your audience's problems.
Sales teams target specific opportunities to add revenue through leads, market expansion, service/product development and diversity. They set specific goals to be achieved as part of business development, in line with the company's overall strategic goals.
Therefore, sales teams compile business proposals for each lead, send follow-up emails to these leads, and manage all information about the market and leads, often through tools such as CRM software.
Product and vendor management
Managing business development activities takes a lot of effort, especially when markets and products are involved across geographic boundaries. This typically involves the legal, product management, and manufacturing departments working together to ensure that business expansion in a particular country is streamlined and goes as planned.
This business development activity may also include assistance from external vendors. You need to manage and direct these vendors to efficiently address the supply chain and logistics issues that are critical to growing your business beyond its current size.
Business planning departments often include executives who must make decisions about new facilities, manufacturing locations, and additional resources such as local talent to support expansion efforts. They work closely with project management and implementation teams to implement what is determined in the business plan.
Strategic Partnerships is tasked with working with legal, finance, marketing and sales, and business planning to determine and identify local strategic partnership candidates who can help achieve specific business development goals. Masu.
Finance plays an important role in business development from a cost reduction perspective. To improve your business, it's important to look beyond your sales pipeline and consider what cost-cutting measures can help your company better take advantage of available growth opportunities.
Finance departments conduct internal reviews and audits to examine spending across the company to see where money can be saved on specific tasks and processes, and to improve spending elsewhere to achieve specific business development goals. See if you can use it effectively.
Main goals of business development
As you can see, everyone is part of business development, no matter what department, function, or role within your company. To direct the type of work you complete, you need to set some specific goals related to your focus on improving your company.
1. Improving profitability
All companies want to make higher profits. This is because it means more funds can be reinvested into processes aimed at achieving other business development goals. Any leftover funds can be used to expand into new areas, create new products and services, or hire more people.
As mentioned earlier in this business development guide, one of the goals of increasing profitability is finding ways to reduce operating costs while increasing revenue.
Therefore, your profitability goals may be to reduce your rent costs by downsizing to a smaller office, allowing your staff to work virtually, and focusing on adding a certain number of new customers. By working on both areas simultaneously, you are more likely to achieve increased profitability.
2. Improve customer response time
The faster a company can respond to customer needs or address complaints and questions, the more satisfied customers will be. This means easily repeatable sales, which can drive revenue for your business development goals. Alternatively, this improvement could encourage customers to tell others about their great experience, which could lead to an increase in new customers.
To improve customer response times, companies should first consider why this goal is part of their business development strategy. Are your response times slow because you currently don't have enough members on your customer service team? Or is it due to a lack of training? Once you understand why you need to improve your customer response time, you can implement tactics and quantifiable metrics to achieve that business development goal.
3. Promote improvements in operational efficiency
This business development objective focuses on improving some aspect of your operations that can facilitate your ability to further develop your business. By doing so, you can achieve more results in less time and at less cost. This frees up time and money that can be spent prospecting elsewhere or investing in more salespeople.
A good example is the sales department. This is an ideal place to look for ways to improve efficiency. Efficiency goals might include improving win rates by a certain percentage or reducing lead/conversion times for sales reps by a certain amount of time. As part of your business development goals for operational efficiency, you should also include a specific timeline for achieving them.
4. Business expansion
This business development goal focuses on expanding your business physically so that you can serve more customers. In this way, it leads to other goals such as increasing revenue and improving profitability. You may also gain economies of scale by increasing production, and the increased volume may allow you to negotiate better rates on materials.
For example, your expansion goal might be to open a certain number of locations or enter a specified number of countries within the next three to five years.
Taking the lead in business development
Business development means many things to many people, including sales, partnerships, customers, new products and services, and additional markets. And they are all correct interpretations.
This is because each of these meanings has a common purpose. Business development is about creating long-term value for a company through continuous improvement.
Improvements come from the type and number of customers and relationships, markets and regions, products and services, and operational processes. If you decide that the areas that are most important to long-term value are the areas on which you should focus your own business development efforts;