The Ultimate Guide to Business Development in 2022

What Does Business Development Do?

Business development (or biz dev) identifies ways to increase long-term value through establishing your business in new markets, building meaningful partnerships, and increasing the value of an existing customer base.

Business developers collaborate with various business units across the company while influencing the firm’s direction and growth. This can be based on both current business and market trends.

Although business development and sales are closely related, it’s important to note what makes them different.

How is Business Development Different From Sales?

Business development helps you establish and maintain relationships with prospects, increase brand awareness, learn about your buyer personas, and look for new opportunities to promote company growth. In short, it covers every aspect of your business operations.

In contrast, the goal of your sales team is to get new clients. They can generate sales by email outreach, cold calling, or networking. Your sales team's success is measured by how many prospects they convert into customers.

The work of a business developer simplifies the sales manager's job. Let’s take a closer look at what  business development representatives do.

What’s the Role of Business Development Representatives?

Companies typically hire business development representatives (BDRs) when they’re ready to scale from a small startup to a fast-growing company or when inbound leads are insufficient to keep the pipeline full. 

When a business needs more qualified leads than it can generate through digital marketing, BDRs can help by initiating calls with prospects to determine if they'd be an ideal customer for the company. 

If the potential customer is a good fit, the BDR will arrange for a discovery meeting between them and a member of their sales team. From there, it's the sales rep's responsibility to build strong relationships with the prospect and eventually get them to close deals.

Business development reps must know their product and service offerings intimately to communicate their value and purpose to potential clients. 

Other BDR responsibilities include:

• Presenting the business to potential clients
• Identifying client needs and suggesting appropriate products or services
• Customizing product solutions to increase customer satisfaction
• Looking for new business opportunities in the market

What Are the Activities of Business Development?

Successful business development activities run across various departments, including sales, marketing, product management, and project management.

All these activities are based on the goals set by the  business development team. For example, suppose a business has a successful product in the United States. In that case, the biz dev team might evaluate the further potential for expansion. 

After doing market research, the team found that they could expand the product to new target markets like Australia. The business development team then assesses the Australian markets and concludes that the company can achieve sales worth $2 billion in four years. 

With such goals in place, the sales department can now use its sales strategies to target the customer base in the Australian market.

The main departments and activities influenced by business development are:

• Sales: Salespeople focus on a specific set of customers or markets with a particular revenue goal in mind.
• Marketing: The marketing team promotes and advertises products to sell them to end-users. It plays a complementary role in achieving sales targets.
• Project management: The business development team assesses the cost and time needed to expand a business into new markets. Once they set the goals, the project management team then swings into action to achieve the desired result.
• Strategic partnerships: When entering a new market, the business dev team weighs all the benefits and drawbacks of forming strategic partnerships with local businesses operating in the region. The team then decides if it's worth creating the partnership or going solo.
• Product management: Biz dev teams develop a plan that adheres to legal approvals, cost considerations, and regulatory adherence. The product management team then uses this plan to drive their work.

For instance, let’s say certain medicine compositions are allowed in India but not in France. In that case, the business development team will find out if the market in France requires a customized or new version of the product.
They'll then create a product development plan from their research, which the product management team will use when creating medicine for that market.

Builds Crucial Relationships

Relationship-building is a critical component of the business development process. While acquiring new customers has its appeal, keeping existing customers will always result in a higher ROI — and it will cost you 5–25X less. 

So whether it's networking with prospective partners, cultivating existing talent, or courting potential customers, a skilled business developer can zero in on the relationships that require the most attention. 

In doing so, they'll be able to identify new business opportunities, generate leads, and make critical hires.

Boosts Growth and Lowers Costs

Growth is the end goal of business development, and one of the most common metrics for measuring business growth is the bottom line. Creating a strategy to increase the amount of money coming into the business while ensuring less money is going out is critical to business development. 

When you focus on business development, you identify which products and markets have the highest profit potential and which deals to chase first. As a result, you'll make wise business decisions that'll keep costs down and identify areas of funding needed to facilitate expansion.

Helps Improve Your Brand’s Overall Image

A well-known brand can make more money than a lesser-known brand. In fact, the value of the world’s 100 most valuable brands increased by 42% in 2021, totaling a whopping $7.1 trillion. 

By understanding the inner workings of a company's offerings, biz dev leaders can help inform new marketing campaigns that direct customers to products and services that could benefit them. As a result, you’ll have a more recognizable brand that reaches both your target audience and new markets.

Important Skills Business Developers Should Have

As your business grows, you may experience bottlenecks because of failing to notice problems as they emerge. These unexpected issues can arise within your company or outside the business due to, for example, poor customer management. 

In either case, hiring a business developer to identify the problems hindering business growth can be beneficial.

Here are some must-have skills for business developers:

Strong Communication Skills

An excellent business developer must be a team player and have strong communication skills. Teams with effective communication can increase their productivity by up to 25%, and these skills are required to engage all the different stakeholders involved. 

Business developers should also be able to confidently cold call prospects to increase the chances of gaining new clients. 

Understanding Your Business and the Competition

A business developer should understand your products and services. They should also know everything about your competitors to provide you with the leverage needed to outperform them. 

They'll conduct the necessary market research to identify your company's current position and competitive advantage over similar brands in the industry. 

Negotiation & Persuasion Skills

Business development professionals should be tactful and diplomatic at all times. They should know when to compromise and when to take a stand to achieve your business goals. 

They should also be able to win the hearts of your prospects to persuade them to become loyal customers.

High Collaboration Skills

Business development isn't a one-person show. Pumble shares that 86% of employees and executives blame workplace failures on a lack of effective collaboration and communication. 

An effective business developer should be able to influence and build relationships and manage conflicts to get things done. 

Effective Project Management Skills

Since developing a business is a project in itself, good business developers are effective project managers. Companies generally waste 11.4% of their resources due to ineffective project management. 

So, business development managers should be able to set goals, manage projects, establish timelines, manage risk, calculate budgets, delegate tasks, and manage teams.

How To Create a Business Development Strategy

A solid business development strategy instructs your team on how to generate high-value leads that'll ultimately support your organization's long-term goals. 

If you don't have a strategy, your team members may find it hard to identify qualified prospects. They may waste time developing relationships with prospects that'll never convert. 

That said, here are three main steps to developing a reliable business development strategy:

Identify Your Audience and Competitive Landscape

Crafting a successful business development strategy starts with identifying your target audience. Focus on specific companies or clients that present significant growth opportunities for your business. 

That's crucial because business development is a long-term game. The customer relationships you build may take months or even years to turn into sales. So, you don't want to build relationships with unqualified prospects.

Moreover, identify other businesses operating in your industry and get a clear picture of what they're offering to differentiate your product and deliver value to your customers.

Determine Which Channels To Use To Achieve Your Business Targets

Once you've identified your target audience and understood the competitive landscape, outline the channels you'll use to achieve your targets. That involves analyzing your yearly revenue goals and developing specific ways to achieve them. 

The most effective business development channels are a combination of advertising, networking, referrals, content marketing, and cold calls.

Set SMART Goals and Choose Effective KPIs

Set SMART — specific, measurable, attainable, relevant, and time-bound — goals for each channel to measure and track your progress. 

Your business development objectives don't have to be directly related to revenue generation, but they should contain strategies for introducing prospects to your sales funnel.

In addition, ensure you can measure those goals with relevant, meaningful KPIs that reflect your company's health. 

These metrics should give you a good idea of how effective your business development efforts are.

Wrapping Up

Business development is vital to any successful company. It helps you figure out the best ways to identify your ideal prospects, generate more leads, close more deals, and boost revenue.

However, you must carefully craft your business development strategy to avoid losses resulting from misguided attempts to gain new clients and business opportunities.

A simple business development plan is far more effective than having several complex strategies in the hopes of seeing positive results. When implemented correctly, fewer elements always produce better results.