Profit is one of the most important metrics for a business. Every year you want to see the amount you make going up. The way you achieve this growth is varied, but it all comes down to business development.
When you break it down, business development is about how you increase profits. This is done through the way you structure your company, the internal systems you put in place, how you generate leads, manage customers and business partners, and implement your PR and marketing strategies.
In this guide, we’ll look at the different levers of business growth. I’ll then show you how you can apply some of these strategies to increase company profits.
The Fundamentals of a Business Development Strategy
If you are going to implement a business development strategy you need to understand the company and the markets it operates in. There are three key bits of research that will help you do this. You will need to:
- Review your market so you understand the opportunities within your industry
- Analyze the company so you understand its situation and the business development opportunities available
For a small to medium-sized business analyzing the market mainly involves competitor analysis. You want to review the fastest growing businesses in your vertical and identify if there are any lessons you can learn from them.
To give you an example, below is a template an e-commerce store could use to do an online competitor analysis.
A variation of this template could be used for most businesses.
In addition to the competitor research, you might spend time looking at broader economic trends. How much time you spend on this research will vary by niche and be impacted by the size of the company.
A small company might just need information about the local market. If you are operating in a number of markets you’ll need to consider more factors. This could cover things like currency fluctuations and regional economic growth rates.
Following on from this you should do a SWOT analysis.
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. The analysis provides a framework to establish internal and external factors impacting your business. It also gives you insights into the current state of the firm across different departments.
Your SWOT analysis should cover every part of your customer journey. It will include:
- How you generate leads for your
business Howyou turn those leads from a prospect into a customer
- The customer retention strategies you have in place
The customer journey cuts across different departments of your business. It covers marketing, sales, customer support, and more. This is the external customer-facing part of your business.
Of course, the SWOT analysis also looks at the internal structures and systems you have in place customers don’t see. This is the business admin. It’s how you manage your employees.
Ultimately the aim of this business review is to help you understand the state of the company. The more information decision makers have the better the development strategy should be. Well, in theory at least.
How to Set Your Business Development Goals
Most businesses refer to company goals using the acronym KPI. This stands for Key Performance Indicators. Business people like to use acronyms because it makes them feel important.
I’ll just call them goals.
Having company goals provides you, and the people working for you, with something to aim towards. Goals are important because they provide quantifiable targets that you can review. Ideally, you want to have a single overarching company-wide goal.
This company goal needs to be easy to understand, but ambitious to achieve. So for example, if you were running an online software company your goal might be:
- Generate $1 million is Annual Recurring Sales (ARR) within two years
That’s a pretty easy goal to understand.
Now you need to break that goal down into chunks that people can achieve. You do this by first breaking the goal down into targets for each of the departments in a company. If I were to continue with the example above this might look like:
- Sales: Generate 200 $500 a month subscriptions within 12 months
- Marketing: Get 20,000 unique visitors a month within 12 months
- Business Planning: Launch in the Spanish speaking market within 12 months
- Product Management: Reduce customer support bug complaints by 60% within 12 months
These goals will then be broken down again into sub-goals, which are applied to individual employees. The image below shows what this might look like.
This is the kind of business management systems that companies like Google put in place. It helps keep people accountable to targets and provides them with a way to achieve their goals.
Common Company Goals
I’ve tried to make everything practical and easy to understand. I’ve covered the importance of setting a general company goal and then tried to break this down into how you can set targets by the department and then the individual.
However, this last section might have seemed a bit abstract. To help you understand the kinds of things you might want to focus on I’ve shared a couple of common issues that many businesses need to address.
Get More Done For the Same Amount of Money
Efficiency is something that most companies aspire towards. However, the reality is that the majority of companies could be made more efficient, thereby increasing productivity or decreasing labor costs.
A common way to improve efficiency across your business is by creating systems. This provides a structure that your employees operate within.
You can create systems for pretty much all parts of your business. These systems should simplify the process of implementing a task. For example, you could develop systems for:
- Onboarding new employees so they can start work faster and make fewer mistakes
- Create templates for outreach and put processes in place to generate more sales
- Develop a process for dealing with customer complaints and then acting on those complaints
The list goes on.
With a system in place, you can significantly improve employee efficiency. For example, at my wife’s travel company I systemized and templatized the process of managing customer inquiries and orders. While it took a lot of time to create all these templates, once it was operating she was able to deal with orders faster.
I always put a system in place to manage my employees. I use Trello to do this. Everything they need for their job can be accessed from one place. This helps reduce questions. It’s also helpful for managing staff turnover.
Create a Team of Superstars
The key differentiator for most companies, especially in the service sector, are your employees. In order to grow your company, you want to attract the best talent.
This is a rather obvious goal. Yet on top of attracting the best staff, you want to make sure that they have the same skillset. This comes down in part to running staff training programs to either improve capacity or make sure that everyone is at the same leve.
Alongside training your staff to make sure they are all competent you need to have regular reviews to see if they are achieving their goals. This is the job of management. If your staff are underperforming you need to understand why. You also need to address these problems before they become bigger issues that might impact company profits.
Grow Your Business in New Markets
Probably the most exciting area of business development is starting a new project. This might be entering a new market, or opening a new store.
While new opportunities are exciting there is a lot that can go wrong (and all too often does go wrong). Having a plan will improve the chance of success.
This plan will incorporate things like market research, which we covered earlier, budgeting, finding the best human resources, etc. All of this needs to be considered and included within your business development strategy.
How to Implement Your Business Development Goals
After you have finished strategizing you need to implement your business development goals. You need to be strategic in your approach. It’s important to balance the ongoing tasks that will need to continue for the company to be profitable against your new business development strategies.
You will need to analyze the capacity available within the organization to achieve these tasks and the associated costs of implementation. This requires strategizing and planning. Depending on the complexity of your business development goals you might well need to plan well in advance.
Most companies will manage this process through the annual business plan. This is where tasks are broken down into quarters, and then months, with clear outputs. Having such a strategy available for everyone to access helps you stay focused and avoid the temptation of making rushed decisions. This is especially important for large companies that are generally slower than startups at implementing new business strategies.
Keep in mind that your business strategy is not fixed. Make sure to periodically review your business development strategy. Analyze what is working and what is not, then adapt your strategy.
Wrapping it Up
In this guide, I’ve tried to share with you a systematic approach to business development that is relevant to your needs. The outline of the article is broad enough that there will be takeaways you will find useful. However, these are only broad brushstrokes. You will need to customize this strategy to fit the needs of your company.
If there is one lesson I’d like you to take away from the article is the importance of breaking things down into manageable chunks. Before you implement a business development strategy analyze your situation. Use this information to dictate the most appropriate course of action. Once you have done this set out a plan for how you will incorporate these new ideas into your company.