The Basics of Business Development
You may have heard of Business Development (also known as Biz Dev) departments in large organizations, but you may not understand what they do or how you can apply their concepts to your own business. Take some notes from our conversation with Neil Patel, Volusion's Director of Business Development, to help you get started. You will not only learn about business development, but you will also discover new ideas to compliment your progress.
What is business development?
Business development is a business unit that focuses on long-term growth and profitability through three key activities. These activities include, but are not limited to, forming meaningful alliances, expanding into new markets, and the importance of an existing consumer base.
To be competitive in business growth, bear in mind that the job entails a combination of sales, marketing, negotiations, networking, project management, and contract review. One of the many benefits of working in business development is the ability to collaborate with different business divisions around the organization, all while influencing the growth and direction of the company based on current business and consumer trends.
What are the most common ways for small businesses to start with business development?
Market development should be a vital component of the company's growth strategy. Any organization, regardless of size, should have at least one person in charge of the company's business development activities, even if this is in addition to other responsibilities. An employee with ties to your company's sales and marketing organizations would be an excellent candidate for this position. Since this person would be actively "selling" your business to partners and clients, you should look for someone enthusiastic, detail-oriented, and self-motivated.
I would recommend doing some good old-fashioned research to get started with business growth. Before making decisions that can impact your company's growth and, eventually, sales, you must thoroughly understand your industry and all of its moving pieces. Here are a few research topics to consider:
- The current state of your business
- Where you get your latest revenue New and established market prospects
- External and competitive risks
- New and potentially game-changing innovations or goods
Now that you understand all the factors that may affect your business, it’s time to put them to use. The first step in using this data is to identify new sales or customer markets. You’ve probably uncovered that some of your competitors are operating in markets or verticals that you’re not currently selling in through your research.
Before you decide to increase your presence in these markets, ask yourself the following questions:
- What makes your rivals stand out in this market?
- What kinds of customers do they attract?
- What is the market's opportunity?
- What is your return on investment (ROI)?
- What will I have to do to get into this market?
- Is my core product suited to this demographic, or will I need to develop a new one?
- To join this market, will I need to change my customer acquisition and marketing strategy?
You should easily decide whether it makes sense for you to enter these new markets based on the answers to these simple questions. When considering unique needs, be sure that the market will provide you with a broad consumer base to sell to with minimal adjustments to your organizational structure (unless the opportunity is significant enough). Simply put, find a pond with a lot of fish that you can catch without purchasing new equipment.
How do I determine which companies I should partner with?
Now that you know which markets you should and should not be working in, it's time to look at other companies that are already founded or competitive in those areas and decide if it makes sense to collaborate with them.
Working with companies with a broad customer base that will be interested in your product is one of the simplest and quickest ways to expand the scope of your company. Don't restrict your quest for potential partners to partners in your industry or market category. Instead, cast a large net for possible collaborators. When you consider potential partners, consider how they can bring value to your client base while minimizing direct competition and vice versa.
When considering a possible contract, one basic rule to remember is that the best deals have never been made before! There are no bad ideas, and you should not dismiss an agreement because it seems too complicated or unusual. There is no simple way to decide which will be most beneficial to you and your company—so think significant. Early on, it is essential to speak with as many potential partners as possible and investigate new markets and verticals.
You'll be able to say which types of collaborations will work for you as you become more acquainted with your business and customer base. Finally, consider what you should give future partners, as a relationship is a two-way path. To be genuinely successful, both parties must be able to walk away from the discussion feeling that they have both achieved something that would not have been possible if they had not collaborated with you.