Business Development Function

Entrepreneurs who are leading companies into an expansionary period or growth stage encounter significant challenges when deciding where to expand their organization, how to integrate new positions, and how to maintain the synergy that easily comes with a small and nimble team. 

To facilitate the expansion of any company, leaders should consider establishing an internally facing corporate function or group focused on business development. 

The function of business development falls within commercial and organizational theory, and focuses on creating and implementing opportunities for growth within a business. 

In this way, the function of business development broadly encompasses sales, marketing, customer care, operations, and management in order to promote and harmonize company expansion across each vertical. 

Entrepreneurs should work to clearly define their business development unit. 

 

A possible definition can look like:

The business development unit is to become an integrated & advanced strategy consultancy and research entity with the capacity of effectively servicing our company and adding value to our brand.

 

The goal of business development is to create long-term value for a company by improving the business’s effect on customers, market position and stakeholder relationships.

 

Long-Term Value

Long-term value can, in simple terms, be thought of as increasing the economic return and/or performance of the business. However in the case of business development, the focus is not only on the immediate return, but the long-term sustainability and steady growth of the financial return. 

Achieving this requires discovering the right tactics promote growth and implementing the appropriate strategy to sustain growth over the long term. Value can also be thought of as prestige, however prestige is typically the result or after effect of a strong economic performance over a significant period of time. 

 

Customers:

For a business developer, customers represent the people who are investing in your businesses solution. The focus of a business developer is to examine why the customer is making a purchasing decision, determine what their needs are, and discover how the company can better serve the customer. Achieving this is sometimes as simple as improving the product or service, but it can also mean restructuring a department within a business to respond more effectively to market changes and customer needs. 

 

Market Position:

Market position refers to the segment or customer group a business services. For a business developer this means researching how to categorize the customers a business and determine that the categorization means in reference to the broad market. Customer groups can be segmented by geography, level of income, purchasing habit, gender, age, culture, etc…

By understanding the market position of a company, business developers then examine areas where the business can expand its market position, where it can enter new markets to grow the business, and how the business and implement systems to support the expansion. 

 

Relationships:

The last component, relationships, represents the human component to nurturing a business and driving it towards new growth opportunities. Business developers closely study the human relationships within a business to determine where individuals can be more effectively deployed, who can be employed to better service the company, and who should be let go because they represents a barrier to the company’s future success. 

For any business to succeed, strong relationships with good foundations are necessary. Business developers help build, manage and leverage relationships across an organization to foster a more cohesive environment that embraces trust, mutual respect and appreciation, with the motivation to grow of the business and the create of value. 

 

Business developers also examine how the relationship between a company and it’s customers can be improved, as well as the relationship with the press and how it can be leveraged to benefit the reputation and bottom line of the business. 

The interplay of customers, market position and relationships drive the success or failure of a business. Business development is responsible for examining these 3 components and discovering as many ways possible to leverage them, in harmony, towards achieving the maximum positive return possible with the resources on hand.

The broad spectrum of tears that encompass Business development demand that its leader exhibit a degree of competence in different business areas in order to identify and capitalize on growth opportunities. 

 

  • Sales

  • Finance

  • Marketing

  • Mergers & Acquisitions

  • Legal

  • Strategy

  • Management

 

Among the responsibilities of business developers is to assess the current assets of a company and determine how they can be leveraged to grow the business. However, when a company lacks the resources to expand in specific areas, the employment of a third-party business may become necessary. 

 

Outside Support

 

When resources or knowledge is lacking, business developers must look outside their company to discover, create and manage strategic relationships or alliances with other companies. 

In this case, the focus of business developers becomes discovering new cooperative opportunities, identifying sources of competitive advantage, and development winning strategies.

The objective is to find mutually beneficial areas that accelerate and support growth, which requires implementing the right strategic business plan that can yield a positive return for both entities. 

To ensure the successes of any inter-company relationship, business developers are responsible for managing the following components:

 

  • Business to business communication and strategy. 

  • Economic development focused on; strategic positioning & planning, and promotion.

  • Market research, analysis & industry studies.

  • Maintaining a global focus. 

  • Investor recruitment.

 

Each of these elements impacts a business-to-business relationship, and if properly managed can yield results several degrees high than what would be independently achieved by both companies. 

In this case, business developers play a supportive role to the operations of both entities, to ensure that the strategic positioning is maintained and that the core competences of each business are understood and respected. 

The more aligned each company’s strategic mission is, the more likely the relationship will efficiently function, be able to maneuver or weather any potential market changes, and succeed over the long term. 

 

Consultancy

 

The best way to think about the function of a business development unit is to imagine the group as an in-house consultancy firm. 

For the unit to effectively work, it is important to allow the group a significant degree of freedom to examine your business and recommend areas where change can be implemented. Part of their responsibility is to be critical of the status quo, and recommend solutions. 

Maintaining an open frame of mind is essential, while also creating clear boundaries of what is acceptable and possible for the business. 

Business developers are often very creative and persuasive individuals, so managing them requires a bit of patience and big-picture perspective. 

Nevertheless, do not underscore the potential value of a dedicated business development group. 

If you feel that you lack the resources of knowledge of how to properly set-up an in-house business development unit consider employing outside management consultants. Their fees are likely to be high, but their input could yield the insights your company requires to grow, expand, improve and navigate a changing environment.

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Send me a question: moebius@zenofwuwei.com