If you go onto any online job board, you will see thousands of results of companies recruiting for business development personnel, such as “Business Development Manager”, “VP, Business Development”, so on and so forth. Why is this so? How important is business development to companies?
In simple terms, business development is known as the summary of business initiatives, business ideas and activities that help to expand your business. For example, coming up with strategies that can increase profit for the company such as building strategic partnerships with other businesses is a form of business development. Many people have the misconception that business development is equivalent to sales, but in actual fact, business development comprises of more than just sales. It includes marketing, project management, product management and vendor management as well. As a business development personnel, you need to manage networking with clients, negotiating with vendors and forming partnerships with other companies with similar business goals.
The sales that we are talking about is not the cold-calling that telemarketers do. Instead, sales personnel analyses the market of the product or service that the company is selling to identify the target group of clients or customers. They will then pitch their company’s services and products to their potential clients in order to hit a targeted revenue number at the end of the month. Setting goals for revenue numbers is a good strategy to push the sales department to reach out to more clients and hopefully drive sales for the company.
Marketing is the promotion and advertising of company products and services in order to generate lead that ultimately increase sales to potential customer base. The purpose of marketing is to bring the product or service to customers by engaging customers through the usage of social media, email marketing, advertising, promotions etc. Business development initiatives allocated a certain amount of budget especially for marketing, as marketing requires funds. For example, a common marketing strategy is to hold giveaways. On such occasions, the company can choose to collaborate with other brands to host the giveaway together or purchase giveaway prizes using funds from their own company reserves. Hence, it is important to allocate budget for marketing. Higher budget allows for more aggressive marketing strategies like cold-calling, roadshows and free sample distributions. Low budgets result in passive marketing strategies, such as online advertising, social media advertising and billboards.
Project management involves managing the business expansion of a company. For example, when a company expands overseas, will there be a need for new facility in the new market, or will the products be manufactured in the base country and then imported into the overseas market? Will there be additional facility needed to support the decision? Such decisions are finalised by the business development team based on their cost and time related assessments. Afterwards, the project management team will put the plan in action to achieve the unified goal.
There are different standards and market requirements of the same product in different countries. For example, a medicine of a certain composition that is allowed in Singapore may not be allowed in China. Hence, the pharmaceutical companies have to either come up with an entirely new medicine that is allowed to be retailed in China, or customise the existing formula to fit the market requirements. These processes require the skills of a product manager to decide on the business strategy. Product managers have to consider on the cost of the processes, legal approvals and regulatory adherence in different geographical locations around the globe.
Many new businesses require external vendors to aid them in their business. Let’s say you own a clothing (fashion) business and would like to offer your customers the service of home delivery. You would need to engage an external delivery company to do the delivery services on your behalf, and this requires personnel to liaise with the external delivery company to ensure smooth delivery. The business development team also needs to calculate the costs and weigh the trade-offs of engaging external vendors to perform various tasks for the company.
What kind of knowledge should a business developer have?
As mentioned above, business development involves a lot of strategic planning and high-level decision making. Therefore, there are some knowledge and skills that a business developer should possess in order to perform well in his or her role.
Firstly, let’s start off with the basics. A good business developer should be able to do the SWOT (strengths, weaknesses, opportunities, threats) analysis on their own company and their competitors. This provides deep insights to the business performance on a market level. A business developer should also be aware of the current state of the overall industry and growth projections in order to do a comparative analysis for your own company. Next, a good business developer should identify primary sources of sales of the business, and develop sales strategies to bring in sales for the company. While identifying sources of sales, a business developer should also explore new and unexplored market opportunities that the business could potentially expand to. Last but not least, a successful business developer should learn to do budget control and explore possible options for cost-savings. This is because expanding a business is expensive, and it will be ideal to have a long-term view on your business so as to avoid future problems such as struggling with cash flows.
In conclusion: How to be successful in Business Development?
Since business development involves creating a vision and putting ideas into action, it is recommended to have a team instead of working individually. Working in a team allows members to bounce off ideas off one another, which may lead to better strategies being generated. A successful business developer is able to write a good business plan, which becomes a blueprint for other companies to follow their footsteps to success.