Business development is a set of tasks and processes that help a company grow. It can include any activity that:
- Cut costs and improves productivity
- Generates more sales by reaching new customers
- Helps you make more money from your customers
You can see from this definition that the scope of business development is quite broad. It is a multidisciplinary skill.
Your approach to business development will depend on your company. A coffee shop owner with three staff might have a simple plan. For example, they might be planning to launch an eCommerce store later in the year. The new website will help them reach new customers. Then, they might also promote their coffee on a delivery app. On top of this, they might try using accountancy software to reduce expenses.
All of these activities are meant to reduce costs and help them get more customers.
A business consultant working for Microsoft will have a different approach. They might spend time looking at the global production chain. They might be looking for ways to improve the delivery of parts between factories. Or, they might be exploring opportunities to launch products in new markets.
The ultimate goal for both companies is the same, “to make more money.” How businesses achieve that goal differs.
Useful Resources on Business Development
There are a lot of great books and other resources that look at business development. You will find content that looks at the theory of running a business. These are often written by business leaders and academics. You will also find personal stories about running businesses.
As a startup business owner, I read a lot of books about business. Some classics you might have heard of include:
- The Lean Startup – Many people in the tech scene talk about this book. The book provides a framework for startups to test the market and grow fast.
- Blue Ocean Strategy – Another great book. This one discusses how to identify business opportunities competitors have overlooked.
- Revels & Innovators: How Rebels & Innovators Create New Categories & Dominate Markets – The authors of this book run a consultancy firm. The authors review the business strategies of billion-dollar companies.
One of the best pieces of advice I can share is the importance of continuous personal development. If you want to learn about business development you should learn from your peers.
How Is Business Development Different to Sales?
Business development and sales are two different but complementary things. The goal of your sales team is to acquire new customers. Your sales team might generate sales by cold calling customers, email outreach, or networking. The success of your sales team is measured by how much money they make the company. Another department of the company will handle new clients.
Business development covers every part of your business operations.
For instance, you might hire a business development consultant to review the company structure. Their goal might be to identify parts of the business where you could reduce expenses. Or they might consider how to improve company productivity.
What are the skills required for business development?
There are some key abilities and competencies that are necessary to get business development function right. Let’s take a look at them:
Ability to Learn Fast
One important skill for a business developer is the ability to learn fast. You need to be able to learn quickly how a business works. You should be able to spot opportunities for growth and craft a strategy to increase profits.
“I think a key part of your success in business will be down to your ability to analyze information and make decisions fast. You won’t always make the right decision, which is why it’s important to assess the outcome and pivot if necessary.” – Sujan Patel, Kickstart Careers
A business developer should have what journalist Thomas Friedman calls ‘curiosity quotient’. Curiosity quotient is the ability to analyze staff, culture, industry, budgets, client’s pain points, etc. You can then use those insights to develop a business plan.
Analytical skills are important. You need to review a lot of data, and then act on those insights. You might have to review budgets or part of the sales process of a business. Your job as a development executive is to analyze these systems and provide useful insights.
As a business developer, you might need to review sales channel development. Or, you might need to understand business development activities. You should be able to identify potential growth opportunities. Those opportunities might help increase efficiency, reduce costs, etc. You can then use those insights to adjust a business’s strategy.
As a business developer, you need to find effective solutions to challenges. For example, you might need to consider how to attract and retain clients. That might require innovative thinking. You’ll need to come up with policies and programs that help the business achieve its goals.
You need to generate, prioritize, evaluate and validate new ideas. Then you need to implement those ideas. This is known as the innovation management process.
Planning is an important skill for a business development executive. You need to be able to analyze a situation and identify opportunities. You then need to create a strategy.
A good plan will have business development objectives and fit within the company’s overall strategic plan. For example, reduce transportation costs by 5%. Your goals should be SMART.
Communication skills are important for a business developer. You need to be able to talk with others, listen to their views, and receive suggestions.
Good communication skills will help you make the right decisions. Importantly, clear communication will also increase the chance people listen to your suggestions.
As a business developer, you’ll have to work with various teams and departments. For instance, during a review of sales, you might identify a problem with your website. Clients might also complain about the response times of your customer service team.
You need to be able to get people from different backgrounds to collaborate. In other words, your relations development game must be strong.
Negotiation and Lobbying
In business development, you might need to deal with different stakeholders. You might have to work with government agencies, vendors, clients, etc. Diplomacy is an important skill for a business development manager. You have to earn people’s trust to achieve your goals. It’s important to have business development ethics as well.
What are the top 3 skills for a business development executive?
The top three must-have competencies to build business development expertise are as follows:
Is business development a good career?
A business development career can challenging and rewarding. There are a lot of consulting companies that look for talented consultants. The most famous global consulting firm is McKinsey & Company. The firm works with companies that operate in a range of niches. They also support governments.
Business development specialists work with consulting firms. Many large companies, especially Fortune 500 companies, hire business development specialists.
According to Zip Recruiter, business development staff earn an average annual salary of $70,991. That works out to around $34 an hour, $1,365 per week, and $5,916 per month.
Payscale shares more information about salaries. An executive with less than five years’ experience earns an average annual salary of $54,893. A mid-career executive is paid an average of $71,074. Glassdoor’s data shows that executives can earn over $100,000 a year depending.
Business development can be a path to the top of the corporate ladder. Some organizations, look for people with a background in business development for senior roles. Linkedin did a study of over 20,000 employees across 20 countries. Most of the CEOs in their study started their career as consultants.
The primary job function of a CEO was business development. Sales is the secondary function for most CEO’s.
What should I study for business development?
Most schools don’t offer degrees titled Business Development. There is a wide range of courses that can set you on the towards a career in business development. For example, a degree in economics, finance, marketing, or a related field, is useful.
Many consulting firms look for people with a graduate degree. A good academic background can help you progress in your career in business development.
How can I be successful in business development?
There’s no guarantee you’ll be successful in business development. However, there are a few things you can do to improve your chance of success.
First off, always be a listener and a learner. Make sure you understand the ins and outs of an organization before trying to make improvements. It may require patience to get a good understanding of how the business runs. It is only after you understand a business that you should make suggestions.
To be successful in business development, you need to be good at nurturing relationships. You have to learn how to grow and maintain your professional networks.
A willingness to learn from others is also important. Read books from your peers. People like Paul van den Brande, Gennaro Cuofano, Tito Borth, Whitney Kippes, and David Gram, share a lot of great advice. You might also want to join courses over the summer at educational institutions.
What are the four growth strategies?
There are four basic growth strategies for business development. The four strategies are market penetration, product development, market development, and diversification. These are part of the Ansoff Matrix.
Let’s look at each of these four growth strategies in detail:
Market penetration is a measure of how much your product or service is used by customers. For instance, there are several soda products. The market leader is Coca-Cola. Pepsi Cola comes in second, followed by other brands.
Market penetration is measured by the amount of your product you’ve sold compared to the market size. Essentially, it’s a measure of how you compete against other firms offering the same product or service.
Product development refers to all the stages of bringing a product to market. It starts with coming up with an idea. You then add features, test, and release the product. Once the product is released, you might then make updates to the product.
There are a lot of concepts associated with product development. For example, Agile Software Development. Or, you have the Lean Startup methodology.
Market development is a growth strategy for identifying new places to sell existing products. The new market could be a new city, country, or target market. Business development processes can help firms come up with a strategy to enter a market.
Examples of market development, include Amazon trying to enter the Indian market. Or Tesla building an automobile factory in China. Both of these strategies are about finding new customers for existing services and products.
Diversification is where a firm creates a new product for a new market. It is one of the most high-risk growth strategies. Many companies have attempted diversification and failed. For example, Google spent billions of dollars on Google Plus. The product was supposed to compete with Facebook. The product was a failure.
However, diversification can also lead to rapid growth. There are many examples of companies that have pivoted into a new niche and grown fast. An obvious example is Nintendo, a company that originally created card games. They entered the electronic toy sector.
How to Create a Business Development Plan (Insights From a Six-Figure Business)
I’ve grown three successful businesses in the last decade. A large part of my success is down to planning. This is certainly the case with Launch Space, where I offer SaaS consulting services.
Having a business plan has helped me avoid a lot of silly rookie mistakes. It also kept me focused. In the next section, I’ll cover the approach I took to grow Launch Space into a marketing agency working with global clients. There are elements of this strategy you can apply to any business.
1. Analyze The Competition
Every great plan is based on research. Well, most great plans are based on research. Ice cream at midnight is rarely planned, but it’s pretty great 😀
The first thing I do when creating a business development strategy is to review the company and the market. You need to understand the strengths and weaknesses of your company. It’s important to also review your competition, customer (creating a customer persona is handy), and review market trends.
Let me use Launch Space as my example. During my review of the competitive landscape for this business, I discovered some of the following:
- There are only a few agencies that provide specialized services for SaaS firms. Most agencies don’t have a clear target audience.
- Most SEO agencies lock clients into a 6 or 12-month contract. A long contract is a big commitment for a company. For example, $4k a month is a $48k contract.
- Many clients don’t see a return on investment from working with an agency. Trust in the agency is a big issue for clients.
- Most SEO agencies don’t promote their services through guest posting on authority sites.
You will gain many useful insights by researching your niche before you make a plan. The research is a chance to test your assumptions, and gain insights.
2. Identify Your Business Opportunities
At the end of the research phase of your business development plan, you need to review the information you gathered. Spend time analyzing all the data. You should then use these insights to create your business development plan.
For Launch Space, my goal was to find ways to do things that are disruptive and help me stand out. I created a table. On one side I listed my insights. On the other side, I listed the opportunities for my business.
|Insights||Opportunities for Disruption|
|Lots of Competition||Niche down to SaaS|
|Clients are locked into contracts||Skip the contract|
|Fixed monthly fee||Only charge for what I deliver|
|Skeptical clients||Offer a free trial period|
|Agencies don’t do SEO||Write a lot of guest posts|
Your research helps you understand the market. You can then use those insights to identify business opportunities.
For example, through my research, I learned that one of the biggest issues agencies have is trust. They naturally don’t trust an agency they have never met. Skipping a contract would allow me to differentiate myself from the competition. In fact, I made the fact you don’t need to sign a contract key part of my sales copy. You can see this on the homepage I created with a landing page builder.
When I made my business plan, I didn’t have a company. If I had a company with lots of customers, I’d still do the same type of research. However, I’d spend more time reviewing company operations. I’d look at what are the main drivers of growth for the company. I’d also consider what are the company’s biggest problems.
3. How to Set Your Business Development Goals
The next stage of business development is to set targets. Your targets help you understand what you want to achieve and measure your success. You should make sure your goals are SMART – Specific, Measurable, Attainable, Relevant, and Time Based.
When I created my business plan for Launch Space, I set a single company goal. The goal was ambitious and easy to understand.
I then created sub-goals for the different parts of your business. So for example, for my website, I started with the following goal.
- Generate $10k in monthly recurring revenue
That’s a pretty easy goal to understand. I then thought about how to achieve that target. My sub-goals look like this.
- Sales Goal: Secure 1 new client each month from cold outreach
- Delivery: Every two months get 1 client to increase their order
- Human Resources: Hire 1 full-time member of staff
I then looked at the things I would need to do to achieve each sub-goal.
For example, if I was to get one new client a month I would need to meet with five potential clients. I estimated that to secure those meetings I would need to cold email 200 businesses a week. Those were my activities for that goal.
Those activities are quantifiable. I can tell you if I sent 200 emails in a month. Businesses like Google have these sorts of systems in place to measure targets. It helps keep people accountable and provides management with a way to check progress.
4. Create Standard Operating Procedures
After you have finished strategizing you need to implement your business development goals. There are too many variables in place for me to provide you with many useful insights for this part of the process.
However, there is one business development tip I can share…
As you work on tasks, create Standard Operating Procedures (SOP). Standard Operating Procedures are a set of rules for how the company operates.
Your SOP should build on your business development plan. For example, I have created a whole set of SOP for sales outreach.
I started by setting sales targets for the company with SMART goals. I then looked at how I’d achieve those goals. Then, I tested my approach. Once I found a system that worked, I broke the job down into chunks.
I listed out all of the things I needed to do to complete the task. I then gave this information to an employee. They did the work.
Systemizing your business in this way has multiple benefits:
- Reduce the amount of time it takes to complete a task
- Don’t lose information when a person leaves the company, which speeds up the transition
- Ensure vital tasks get completed every month
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.
5. Review Your Progress
The final stage of your business development strategy is the review stage. This is where you put a date in the diary and say, “in three months’ time we should be…”
Then, you can review progress against your goals.
The purpose of these reviews is to see how you’ve done against your business goals. Just as importantly, a review is a chance to adjust your business plan to make sure that it aligns with what you’re trying to accomplish.
You can incorporate things like a SWOT analysis in your quarterly or annual review. These types of exercises can help you understand where you stand.
During a review, you should assess the validity of your business goals. Make sure they are still relevant to your company. If they are, great. If not, change your business development goals.
Look at the activities in your business that make the most money. For example, at Launch Space I’m making around:
- SEO Consulting work = $20k+
- Private training = $3k
- Affiliate marketing = $0.5k
It’s easy to see what makes the company the most money.
I then look at how I can maximize growth through my SEO consulting work over a quarter. Periodic reviews help me ensure my business development strategy aligns with the drivers of company growth.
You should also review the problems the company is facing. For example, as Launch Space grows I often find myself spending a lot of time doing a job that doesn’t help the company scale.
I don’t want to get stuck managing the day-to-day tasks that don’t add value to my business. It’s a pain point.
When I get stuck in a task, I try to find a way to free up my time. Normally that involves, creating SOP and then outsourcing the work.
The Fundamentals Of Business Development
I hope you’ve got a lot of value from this guide. In the first section of the guide, I defined business development. I talked about the academic basis for business development as a field. I then showed you how to use the insights that you gain from your peers to create a business development strategy that’s right for your business.
In the second half of this guide, I provided you with an example of my business development strategy. I showed you how I put together a business strategy that allowed me to scale a marketing agency from a side hustle to a six-figure business in less than 12 months. I hope you’ve found this article interesting. If you have any questions, hit me up in the comments below.