The Basics of Business Development

By Shobhit Seth | September 8, 2015 — 2:52 PM EDT

“Executive–Business Development”, “Manager–Business Development”, or “VP–Business

Development” are impressive and heavyweight titles often heard of in business
organizations. Sales, strategic initiatives, business partnerships, market development,
business expansion, andmarketing–all of these fields are involved in business development,
and are often mixed up and mistakenly taken as the sole function of business development,
which leaves the question: “What exactly is business development?”

This article explores the nitty-gritty of business development, what it encompasses, and what,
if any, standard practices and principles to follow.

What is Business Development?

In the simplest terms, business development can be summarized as the ideas, initiatives and
activities aimed towards making a business better. This includes increasing revenues, growth
in terms of business expansion, increasing profitability by building strategic partnerships, and
making strategic business decisions. But it's challenging to boil down the definition of
business development. First, let's look at the underlying concept, and how it connects to the
overall business objectives.

Concept and Scope of Business Development

Business development activities extend across different departments, including sales,
marketing,project management, product management and vendor management. Networking,
negotiations,partnerships, and cost-savings efforts are also involved. All these different
departments and activities are driven by and aligned to the business development goals.

For instance, a business has a product/service which is successful in one region (say, the
United States). The business development team assesses further expansion potential. After
all due diligence, research and studies, it finds that the product/service can be expanded to a
new region (like Brazil). Let’s understand how this business development goal can be tied to
the various functions and departments:

 Sales: Sales personnel focus on a particular market or a particular (set of) client(s),
often for a targeted revenue number. In this case, business development assesses the
Brazilian markets and concludes that sales worth $1.5 billion can be achieved in three
years. With such set goals, the sales department targets the customer base in the new
market with their sales strategies.
 Marketing: Marketing involves promotion and advertising aimed towards the
successful sale of products to the end-customers. Marketing plays a complementary
role in achieving the sales targets. Business development initiatives may allocate an
estimated marketing budget. Higher budgets allow aggressive marketing strategies
 like cold-calling, personal visits, road shows, and free sample distribution. Lower
budgets tend to result in passive marketing strategies, such as limited print and media
ads, and billboards.
 Strategic Initiatives or Partnerships: To enter a new market, will it be worth going
solo by clearing all required formalities, or will it be more pragmatic to strategically
partner with local firms already operating in the region? Assisted by legal and finance
teams, the business development team weighs all the pros and cons of the available
options, and selects which one best serves the business.
 Project Management/Business Planning: Does the business expansion requires a
new facility in the new market, or will all the products be manufactured in the base
country and then imported into the targeted market? Will the latter option require an
additional facility in the base country? Such decisions are finalized by the business
development team based on their cost-, time- and related assessments. Then project
management/implementation team swings into action to work towards the desired
goal.
 Product Management: Regulatory standards and market requirements vary across
countries. A medicine of a certain composition may be allowed in India but not in the
U.K., for example. Does the new market requires any customized (or altogether new)
version of the product? These requirements drive the work of product management
and manufacturing departments, as decided by the business strategy. Cost
consideration, legal approvals and regulatory adherence are all assessed as a part of
a business development plan.
 Vendor Management: Will the new business need external vendors? For example,
will shipping of product need a dedicated courier service? Or will the firm partner with
any established retail chain for retail sales? What are the costs associated with these
engagements? The business development team works through these questions.
 Negotiations, Networking and Lobbying: A few business initiatives may need
expertise in soft skills. For example, lobbying is legal in some locales, and may
become necessary for penetrating the market. Other soft-skills like networking and
negotiating may be needed with different third-parties such as vendors, agencies,
government authorities, and regulators. All such initiatives are part of business
development. (For more, see: Why Lobbying Is Legal and Important in the U.S.)
 Cost Savings: Business development is not just about increasing sales, products and
market reach. Strategic decisions are also needed to improve the bottom line, which
include cost-cutting measures. An internal assessment revealing high spending on
travel, for instance, may lead to travel policy changes, such as hosting video
conference calls instead of on-site meetings, or opting for less expensive
transportation modes. (For more, see: Best Ways to Purchase Cheap Airline Tickets.)
Similar cost-saving initiatives can be implemented by outsourcing non-core work like
billing and accounting, financials, IT operations and customer service. Strategic
partnerships needed for these initiatives are a part of business development.
The business development scenario discussed above is specific to a business expansion
plan, whose impact can be felt by almost every unit of the business. There can be similar
business development objectives, such as development of a new business line, new sales
channel development, new product development, new partnership in existing/new market,
and even merger/acquisition/sell-off decisions.

For example, in the case of a merger, significant cost savings can be accomplished by
integrating the common functions of the house-keeping, finance, and legal departments of
the two firms. Or, a business operating from five different offices in a city can be moved to a
large central facility resulting in significant operating cost savings. But would this lead to
employee attrition, if the new location isn't convenient for everyone? It's up to the business
development team to assess such concerns. In essence, business development involves
high level decision-making based on a realistic assessment of all potential changes and their
impact. Through new ideas and initiatives, it aims to improve the overall business prospects,
which drive the functioning of the different business units. It is not sales, it is not marketing, it
is not partnering. Instead, it is the eco-system encompassing the entire business and its
various divisions, driving overall growth.

The Right Fit for Business Development

A business developer can be the business owner(s), or the designated employee(s) working
in business development. Anyone who can make or suggest a strategic business change for
a value-add to the business can contribute towards business development. Businesses often
encourage employees to come up with innovative ideas, which can help in improving the
overall business potential.

Businesses also seek help from external incubator firms, business development companies

(BDC)and small business development centers (SBDC). However, these entities assist in
business establishment and the necessary fine-tuning only during the early stages of
business setup. As a business matures, it should aim to build its business development
expertise internally.

What Should a Business Developer Know?

Since business development involves high-level decision making, the business developer
should remain informed about the following:

 The current state of the business in terms of SWOT analysis (Strengths, Weaknesses,

Opportunities, and Threats). (For more, see: Executing a SWOT Analysis.)
 The current state of overall industry sector and growth projections
 Competitor developments
 Primary sources of sales/revenues of current business and dependencies
 The customer profile
 New and unexplored market opportunities
  New domains/products/sectors eligible for business expansion, which may
complement the existing business
 The long-term view, especially with regards to the initiatives being proposed
 The cost areas, and the possible options of cost-savings

What Drives Business Development Activity?

Due to the wide open scope of business development and activities, there are no standard
practices and principles. From exploring new opportunities in external markets, to introducing
efficiencies in internal business operations, everything can fit under the business
development umbrella.

Those involved in business development need to come up with creative ideas, but their
proposals may prove to be unfeasible or unrealistic. It's important to be flexible, to seek out
and take constructive criticism, and to remember that it's a process.

The Bottom Line

Business development may be difficult to define concisely, but it can be easily understood
using a working concept. An open mindset, willingness for an honest and realistic self-
assessment, and the ability to accept failures, are a few of the skills needed for successful
business development. Beyond the ideation, implementation and execution of a business
development idea, the end results matter the most. The bright minds in business
development should be ready to accommodate change in order to achieve the best results.
Every approval or disapproval is a learning experience, bettering preparing you for the next
challenge.

RELATED ARTICLES

Business Development - What does it mean? Who is it for?

Mark Kershaw
FollowMark Kershaw
BDM @ Taylor James - helping brands and agencies to create beautiful content

Is it the same for everyone?

Having now worked in a number of roles that you might consider as business development (BD), I
thought I'd start my publishing journey on LinkedIn (this is my first post) with a bit of reflection.

I often get asked what the difference between straight selling and BD is, so I thought I'd try and define
the differences (for my own sake, if nothing more!).

To some degree, they're different sides of the same coin.

Selling and BD go hand in hand.

I've been in roles where I've been strictly selling, others where there is a combination of sales and BD,
and also in roles that I would consider true and pure BD.

In all, however, I've had some link to what would be considered BD within that particular business.

So the answer to the header title is no, I think; BD is different for everyone and every business,
dependent on a number of factors - budget, size of workforce, attitude to BD, etc.

What is 'true and pure' BD?

The sales process is one that involves a lot of people - product development, designers, pricing,
marketing, technical, management - 'front-line' salesmen and 'top-end' management need to combine
forces to deliver a product that their customers want.

If you walk into a shop to buy a pair of trainers, for example, this has been designed from the early
stages by trained footwear designers, manufactured from these designs in a production process of sorts
(industrial or bespoke, depending on the brand), marketed in the appropriate manner to raise awareness
of the product, eventually landing on the shelves of the shop you're in, with a friendly guy/gal willing
to help you transact some business when you make the decision to buy them.

So where does BD fit into this process? What's it all about then?

I think the foremost word that comes up in the BD world is 'relationships'.

That's pretty much what it's all about.

Good business development will help identify, maintain and encourage relationship building within a
firm, building rapport with both suppliers and customers.

It helps strengthen the bonds between these links, supporting the marketing copy and material that
establishes your product in the relevant marketplace.

It helps provide information as to what the client needs to the 'front line' sales team, assisting them in
closing the deal at the end of the process.

It helps inform management as to how the market is moving, providing insights into new
developments of technology, social media and other digital avenues that the firm can take advantage
of, to build and maintain loyalty.

It helps small companies access bigger markets and large companies engage newcomers.

So my definition of 'true and pure' BD is 'helping a business to develop its relationships'.

Plain and simple.

It's networking on a daily basis; attending cutting-edge events to learn about the industry you're
working in; finding (er... stalking?) people on LinkedIn to see what events they're attending and
making sure you meet them there, in person, so that you can have that all important introductory chat;
 it's offering your loyal customers something more than a newsletter - why not run a seminar and invite
them along to it? They might be happy to be invited.

The personal touch is always a winner.

We hear more and more now about relationships marketing, social currency, engagement, etc.

BD is the platform that most of this is built on.

Who is it for?

As I've mentioned before, I've worked in roles that have been classed as BD but have really been sales.
I've worked in hybrid roles where you might do a bit of both. And I've worked in the 'true and pure'
BD roles to.

What this has shown me is that BD has a place in every business. You can't 'develop' your business
without a good BD strategy.

So whether you're encouraging your front-line staff to sign up to a few newsletters, or get yourself
down to a few networking events, or join a LinkedIn group and start up a discussion, BD is something
that can't be overlooked.

It's all very well to have a great product and a nicely designed website, with some great leaflets and a
slick business card but, without the right approach to BD, no one is going to see it in the way you want
to.

Having worked as a supplier to a lot of startups and growing SMEs, the one thing that I've noticed
which has set apart the successes from the failures is their approach to BD.

Develop the relationships - build a community around your business and your product just needs to do
what it says on the tin. The rest will fall into place and you'll have a strong, loyal customer base who
are happy to sing your praises.

For that reason alone, if nothing else, BD is essential for pretty much any business going.

That's my opinion anyway, although I may be a bit bias, of course.

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TUGAS BISNIS DEVELOPMENT

Pada umumnya, tugas yang diemban oleh departement ini adalah melihat dan menganalisa potensi
pasar dan trend belanja kastemer, dengan memperhatikan, dan kalau mungkin me-reposisi produk yang
sudah ada, melalui analisa swot.
analisa pasar/external : (kompetitor) bisa dilakukan untukproduk sejenis dengan memperhatikan
berapa banyak pemain/kompetitor yang sama dipasar yang sama. amati juga kekuatan dan kelemahan
masing-masing melalui peran sales/marketingnya, dan berapa banyak revenue yang mampu mereka
generate tiap tahun untuk melihat posisi prudk kita dipasar (flow-share)
dari pengamatan ini kita bisa mulai membuat rencana aksi untuk perbaikan sebagian atau menyeluruh
(mulai dari sales skills, kompensasi, mutu produk, harga, delivery time, promosi, chanelling, dll)
(kastemer) perhatikan berapa besar anggaran belanja yang dialokasikan untuk satu tahun, untukapa
saja, prosesnya dan pelaksanaan belanjanya (tender, penunjukan langsung dll) berapa persen
dibelanjakan untuk produk tersebut, juga perhatikan siapa-siapa saja pemain disana, sehingga mampu
untuk mengimbangi kekuatan salling-nya - analisa juga kekuatan hubungan dengan kastemer
(customer relationship) agendakan, kalau perlu, sebuah executive call untuk membantu hubungan yang
lebih erat lagi.
pengembangan usaha : buatlah matrix industri yang membutuhkan/menggunakan produk tersebut,
catat alamat dan kontak personnya - lakukan segmentasi, dan buatkan potensi segmen yang bisa
digarap, dari jumlah produk yang mereka btuhkan mulai dari yang paling kecil (untuk menghindari
resource (sales forces, waktu, biaya marketing) yang berlebihan tentukan segmen yang mempunyai
potensi berkembangnya produk - strategi harga juga perlu dibicarakan dengan departemen yang 
bersangkutan untuk menambah kekuatan jual.
pikirkan juga apakah perlu menggunakan marketing channel, kerjasama keagenan, kerjasama
pembiayaan, kemudahan proses dll.
(internal) : buatlah suatu program/rekomendasi dari hasil analisa tersebut - selain sebagai laporan, juga
untuk membantu reakn-rekan sales memudahkan melakukan lobby sampai penjualan - buatkan ukuran
keberhasilan dengan melakukan forecasting kenaikan penjualan (%) tiap quartal - caranya dengan
membandingkan hasil quartal tahun lalu dengan quartal th berjalan - tengarai (identify) proses yang
kritikal terhadap kelancaran penjualan, kompalin kastemer (mutu, ketepatan waktu, kelengkapan
proses pengiriman atau penagihan) dan laporkan, kalau ada, kepada departemen yang bersangkutan
untuk perbaikan atau support yang lebih baik.
buatkan anggaran untuk kegiatan tersebut diatas secara komprehensive, dan simultan sehingga
mendapat support dari management.
business development adalah function, dan biasanya diposisikan di sales/marketing organisation -
reporting to sales manager (senior) dan independent
requirementnya : punya pengalaman di sales/marketing, punya interpersonal skills, mampu
berhubungan dengan semua level di kastemer organisasi, sangat analitikal, dan decisive.