Aminu Bin Ibrahim: In this article, I will be discussing what is business development?
As a startup founder business development is paramount and the building block of any startup or company, Business development tells how the startup or company is doing overtime.
If you ask people/ startup founders what they think business development is, you probably get different answers. Chances are that even your own view of business development isn’t completely aligned with others in your startup, unless you’ve taken special and unusual steps to make it so.
Whether you’re a business owner, involved in business development, or just interested in discovering more, you probably inherited your view of business development from your business experiences or you learn it from Google, created it yourself, or perhaps used a mix of all these influences.
Over the cause of my business incubation journey at Dicebox Innovation Hub (Di-Hub), I have learned what is business development means to startups and how it can be interpreted during the period of their startup journey.
What is business development?
Business development is the discipline required to achieve growth through the acquisition of profitable net new customers and the expansion of existing customers.
Business development? Is it something to do with sales? For sure. Is it related to business growth? It had better be! Does it have anything to do with your business strategy? Probably.
Clearly, business development is concerned with growth and most companies achieve growth by getting new customers. Even if you grow by acquisition, you’re still, at the root of it, acquiring new customers (though note that, unless they’re profitable to you, you really don’t want them). You also have existing customers and many firms neglect the opportunity for growth that lies within those existing (or historical) customers.
I’m frequently amazed by how many people think that they can do business development when they’ve never studied it for a moment. If you think about your offer and the knowledge and experience it takes to do what you do for your customers, you probably don’t take that lightly. So start thinking of business development the same way. You have to study it, become an expert, and use the discipline.
When small firms have plenty of business, they neglect business development, and when they’re running out of business they panic and start scurrying around for new opportunities. This approach is disastrous. Getting a new business takes time. If you’re not looking ahead to where your revenue is going to come from in three or six months’ time, you’re facing the specter of horrible revenue swings, which stress the company, your cash flow, and your co-workers/employees.
Business development gives you a disciplined approach to creating your offer, taking it to the market, acquiring customers, developing them to enhance your success, and partnering with others to grow still further.
Why business development is not selling?
A lot of people equate business development with selling, but in fact, selling is just one of its functions, not the whole thing.
Selling is only part of business development Sales is the art and science of presenting the solution to a prospective customer’s need and getting to the transaction, where the customer ‘buys’ your solution.
By contrast, business development is much broader. To develop a business, you have to create solutions to the problems or pains that are sufficiently common in the marketplace for you to build a viable business. Then you have to figure out how to take that offer to the marketplace and generate results.
Businesses that think of business development as only sales often have big gaps in their business development cycle that loses them money. Closing those gaps is one way you can boost your results – often dramatically.
Core components of Business Development
1. Your offer: Creating the solution you have or the reason your business exists.
2. Marketing: Making the market aware of your offer.
3. Selling: Acquiring new customers.
4. Customer management: Delivering your solution so that you retain, expand, and leverage your customer base.
5. Partnerships: Joining with other firms to expand your opportunities.
6. Feedback: Using opinions to improve your offer (in other words, quality assurance). Feedback from customers, from your staff and from the delivery department, respectively.
We can see that business development is cyclical – a feedback loop, with the potential to improve, recreate, and enhance your performance.
When startup confuses sales with the wider practice of business development, they often end up taking the wrong approach to growth.
Imagine that your startup has reached a certain size and as the owner you’re totally stressed trying to keep up with everything you have to do. You’ve exhausted your own network for getting customers, and sales are slowing down.
Getting those spectacular results to take more than one person. It takes a village or, in a small company, a few key people pretending to be a village (also known as wearing multiple hats). Growth is dependent on creating the vision for business development and then dealing with the reality.
Reference Materials
Business Development for Dummies by Anna Kennedy
“What, Exactly, Is Business Development?”. Forbes. Retrieved 2015-11-09.
Davis, C. H., & Sun, E. (2006). Business development capabilities in information technology SMEs in a regional economy: An exploratory study. The Journal of Technology Transfer, 31(1), 145-161.
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