What, Exactly, Is Business Development?
» “Business development is sales”, some will say, concisely.
» “Business development is partnerships”, others will say, vaguely.
» “Business development is hustling”, the startup folks will say, evasively.
Its is the Grand Unified Theory of business development:
Business development is the creation of long-term value for an organization from customers, markets, and relationships.
There is elegance in simplicity, but perhaps this definition leaves you wanting more. At its heart, business development is all about figuring out how the interactions of those forces combine together to create opportunities for growth. But a theorem requires a proper proof, so let’s break that statement down:
First, what do we mean by “long-term value?”
In its simplest form, “value” is cash, money, the lifeblood of any business (but it can also be access, prestige, or anything else a company seeks in order to grow). And there are plenty of ways to make a quick buck for you or your company.
But business development is not about get-rich-quick schemes and (I-win-you-lose) tactics that create value that’s gone tomorrow as easily as it came today. It’s about creating opportunities for that value to persist over the long-term, to keep the floodgates open so that value can flow indefinitely.
Thinking about business development as a means to creating long-term value is the only true way to succeed in consistently growing an organization.
The “customers” portion of the definition may be slightly more obvious – customers pay the bills. They are the people who pay you for your products and services, and without them you won’t have any business to develop.
But not everyone is a natural customer for your business. Maybe your product doesn’t have the features they are looking for. Maybe your product is perfect, but they don’t even know your company sells it. Or maybe you’re not reaching them because you’re not knocking on their door.
That’s because customers “live” in specific markets. One way to understand markets is by geography – if you only focus on selling in KSA! but you reside in Manama, then you are currently unavailable to me as a customer as I do not currently reach the Bahraini market. But customers also “live” in markets that are defined by their demographics, lifestyles, and buying mindset. Identifying opportunities to reach new customers by entering into new markets is one important gateway to unlocking long-term value.
Take for example the Pet Owners market. The customers who live there, of course, are people who own cats, dogs, fish, etc. Petco is a company that clearly sells to customers who live in the Pet Owners market. We, on the other hand, do not have a pet. We don’t live in the Pet Owner market. So what if Petco wanted to sell something to us? Then they’d need to find a way to enter into a market where we do live.
Now, determining whether that’s a good idea or not for Petco to do so is a job for the business development team.
And then there were “relationships.” Just as the planets and stars rely on gravity to keep them in orbit, any successful business development effort relies on an underlying foundation of strong relationships. Building, managing, and leveraging relationships that are based on trust, respect, and a mutual appreciation of each other’s value is fundamental to enabling the flow of value for the long-term. Relationships with partners, customers, employees, the press, etc. are all critical to the success of any business development effort and as such they demand a bold-faced spot in any comprehensive definition of the term.
So, is business development actually sales? Is it partnerships? Is it all about hustling? Well, frankly, yes. It’s all of the above and if your practicing the business development then you would agree with us that it’s a complicated and fascinating discipline that deserves a clear understanding, so that we can marvel at the beauty of a well-done deal as much as the stars.
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