BUSINESS DEVELOPMENT & FINANCIAL PLANNING
What Are the Basics Of Business Development?
In the simplest terms, business development can be summarized as the ideas, initiatives, and activities that help make a business better. This includes increasing revenues, growth in terms of business expansion, increasing profitability by building strategic partnerships and making strategic business decisions.
Business development encompasses a wide scope of ideas, activities, and initiatives that a business owner and management implement with the goal of making the business better.
Business development can include many objectives, such as sales growth, business expansion, the formation of strategic partnerships, and increased profitability.
Successful business development impacts every department within a company, including sales, marketing, manufacturing, human resources, accounting, finance, product development, and vendor management.
Business developers should be aware of new market opportunities, possibilities for expansion, competitor developments, and the current sources of the company's revenue.
Understanding the Basics 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. When starting a start up company, business planning is the first step. All of these different departments and activities are driven by and aligned with the business development goals.
Mission & Vision
What does your business stand for? What are your core values, and what impact are you making within your industry and sector? Focusing on the core of what your company represents will aid in setting goals, developing long term vision, and building your brand. Where do you see your business in 5 years?
Sales Sales personnel focus on a particular market or a particular (set of) client(s), often for a targeted revenue number. With such set goals, the sales department targets the customer base in the new market with their sales strategies. Let's make a budget, and a plan.
Competition and Industry
It is important to know your industry, your competitors, and your market. Investing time into market research before building your business plan is of the upmost importance. Are you inventing the wheel, or is the wheel invented? How do you fit into your industry, and what is the consumer demand?
Marketing Marketing involves promotion and advertising aimed towards the successful sale of products to end-customers. Marketing plays a complementary role in achieving sales targets. Business development initiatives may allocate an estimated marketing budget. Higher budgets allow aggressive marketing strategies like cold calling, personal visits, roadshows, and free sample distribution. Lower budgets tend to result in passive marketing strategies, such as limited online ads, print ads, social 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 sensible to form a strategic alliance or partnership with local firms already operating in the region? Assisted by legal and finance teams, the business development team weighs all of the pros and cons of the available options and selects the one that best serves the business. Vendor Management Will the new business need external vendors? For example, will the shipping of a product need a dedicated courier service? Will the firm partner with any established retail chain for retail sales? What are the costs associated with these engagements? Where are your products being sourced from, and do they align with your business values?
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. 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 includes 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. Management can implement similar cost-saving initiatives by outsourcing non-core work, such as billing, accounting, financials, technology operations, and customer service. Strategic partnerships needed for these initiatives are a part of business development.
How does your internal business function? Having the right managment, staff and departments in place is crucial to your businesses success. Developing your budget to balance to ensure you are able to staff and run your business will determine longevity and functionality.
The Business Plan 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 the development of a new business line, new sales channel development, new product development, new partnerships in existing/new markets, and even merger and acquisition (M&A) decisions. 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. What Should a Business Owner Know? Since business development involves high-level decision making, the business owner and developer should remain informed about the following:
The current state of the business in terms of SWOT analysis (strengths, weaknesses, opportunities, and threats)
The current state of the overall industry and growth projections
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 for cost-savings
Business Development Ethics Business ethics involves implementing appropriate and fair practices regarding issues such as corporate governance, insider trading, bribery, discrimination, corporate social responsibility, and fiduciary responsibilities. Laws and regulations often set the standard for business ethics, which companies can then choose to follow and build on in order to earn trust and loyalty from consumers and market participants. Business Development FAQs Why Is New Business Development Important? New business development is important for generating jobs, developing key industries, efficiency within the internal business, and keeping the economy moving forward. What Are the Key Skills for Business Development Executives? Development executives need to have leadership skills, vision, drive, and a willingness to work with a variety of people to get to a common goal. How Can You Be Successful in Business Development? Having a vision and putting together a good team are among the factors that help predict success in business development. But a successful developer also writes a good business plan, which becomes the blueprint from which they build their success. What Should a Business Development Plan Include? A business development plan, or business plan, describes what a business's objectives are and how it intends to achieve them, including goals, start-up costs, and targeted milestones. 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. Not only will it ensure you have a plan in place to follow and guide you, it can be used to present to investors & new partnerships for future funding opprotunities. The brightest minds in business development should be ready to accommodate a change in order to achieve the best results. Every approval or disapproval is a learning experience, better preparing these professionals for the next challenge.
Mane can't wait to start working on your project and helping you determine the future of your business.
*For references on past MANE clients, please contact MANE for more information.