Business development can mean different things in different businesses, so what is it and what does it entail? This article will look at the following areas to uncover what is business development and what it could look like for your business:
- What is business development?
- Why is business development important?
- Which areas are involved in business development?
What is business development?
Simply put, business development is the activity of finding ways to improve a business. That can include improving the sales figures, the bottom line (the money the business makes), increasing the opportunities available to the business, or finding new partnerships with external companies that will benefit the business.
Basically, business development is to create long-term value for a business’s operation process, its customers, its position in the market and its trade partnerships.
It’s a misconception that business development is just another word for ‘sales’ and while developing new relationships with potential clients is part of a business development manager’s remit, it’s not the only area of a business they look to improve.
Why is business development important?
The goal for any business development activity is to make the business more effective and efficient. Good business development could lead to a variety of positive outcomes for a business (depending on what areas they utilise it in), such as:
- Increased revenue
- Winning more clients
- Retaining more clients
- Better customer service and improved customer relationships
- More focused marketing activities
- Saving on operational costs
- Fuller (or more consistent) sales funnel
- Effective business growth
Which areas are involved in business development?
As mentioned, business development can cover different areas in different businesses, so there is no one set ‘job description’ for this activity. But here are some of the areas that business development can be involved with improving:
Sales and bringing in clients is usually a large part of a business development function.
Usually, a sales role would be measured on the amount of revenue they bring into a business, and a business development manager may have the same. They would set goals and identify ways to get the business in front of the right target audiences. Business development finds new ways to engage potential clients, create new strategies to find valuable audiences, or even identify untapped audiences for the business to go after.
Marketing activity involves the promotion of a business in order to gain customers, or achieve more brand awareness, and supports in achieving sales targets.
Business development can work together with marketing to identify the audiences the business wants to sell to, and then explore what marketing activities and channels (the method of reaching the customer, such as online, social media, or email, or offline like print ads, TV advertisement or attending events) they would use.
They then choose the channels that would be most effective and appealing to the target customer in order to fill up the sales pipeline and bring in new customers consistently.
When looking to make a strategic move, whether it be moving into an international market, or launching a new product, it can be valuable to use business development techniques to weigh up how to make progress.
If you are moving into a new market or bringing out a new product, is it worth partnering up with another, perhaps more established brand, in order to bring more authority and a bigger audience to your business activity?
Using a business development mindset in this area will involve investigating the potential partnerships you could make for your strategic decisions, whether they are small local firms that you team up with, or larger companies to help bolster your business growth. Business development managers would weigh the pros and cons of each external business, before embarking on contacting potential partners for your work.
A business development manager would keep abreast of any changes in regulatory standards or changes of behaviour in the market, to better understand how the business can serve its customers effectively. They can support with brainstorming around new versions of products that would be better suited to the market demand, or spot new opportunities for the business to fill a gap in the market.
They may also monitor production and find ways to streamline it in terms of cost or timescales.
Supplier and seller management
In terms of finessing the business operation, the business development activity will also look at the external suppliers and vendors that you work with.
A business development approach will look at the costs of your operation and identify if there are better deals with other suppliers available. They would also identify ways to partner with new sellers too to improve your sales, such as getting products placed in a well-known retail store.
Negotiations and networking
Often a business development position will involve quite a bit of networking. In order to get your business out there, it’s valuable to have someone confidently talking to people who could help your company such as other business owners, suppliers and vendors, government authorities, agencies or freelancers, or even lawmakers or regulators depending on your sector.
You may also find that business development involves a lot of pitching. The same networking skills apply to creating and presenting a pitch to win business, and this is part of business development.
Business development is about providing value to the business, so as well as improving sales, you also want to improve the bottom line (how much your business is taking home) which means making savings to maximise profit.
Business development activities in this area could include monitoring spend on software, travel arrangements, looking at your resources and available hours to see if outsourcing would be necessary or useful. They will weigh up the benefits and costs of your operational spend to see if there are ways to improve.
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