Business development
Encyclopedia
A subset of the field of commerce
, business development comprises a number of techniques and responsibilities
which aim at:
1. Researching new types of business/products/services with an emphasis on identifying gaps (existing and/or expected) in the mitigation of needs of potential clients (existing and/or new ones).
2. Attracting new customer
s
3. Penetrating existing market
s.
Techniques used include:
Business development involves evaluating a business
and then realizing its full potential, using such tools as:
Business development is often related to growth although sometimes the optimal marketing strategy and objectives could be about downsizing the activity in an existing market or decreasing the sales volume of a selected line of products or services.
Business-development roles may have one of two modes:
In a sales role, business development could concentrate on developing strategic-channel relationships or on general sales. This emerges from analysis of the varied job description
s found in job-search engines, especially in the UK. In the US, the term "capture management" appears as an alternative job or role title, typically used when describing business development as an operational function to support the selling function of a company. The Association of Proposal Management Professionals
have produced the "Capture Management Lifecycle" that describes the process in three broad stages:
Small to medium-sized
companies often do not establish procedures for business development, instead relying on their existing contacts. Or people in such companies may assume that because they know people in high places that this will solve any business-development problems and that somehow new financial transaction
s will come to them. Such thinking can have significant ramifications if one cannot exploit those relationships, which very often remain personal or weak. Such a situation may result in no new sales in the pipeline.
s frequently have had earlier experience in financial services
, investment banking
or management consulting
; although many find their route to this area by climbing the corporate ladder in functions such as operations management
or sales. Skillset
s and experience for business-development specialists usually consist of a mixture of the following (depending on the business requirements):
The "pipeline" refers to flow of potential clients which a company has started developing. Business-development staff assign to each potential client in the pipeline a percent chance of success, with projected sales-volumes attached. Planners can use the weighted average of all the potential clients in the pipeline to project staffing to manage the new activity when finalized. Enterprises usually support pipelines with some kind of CRM (customer relationship management
) tool or CRM-database
, either web-based (such as the salesforce.com software-as-a-service
solution) or an in-house system
. Sometimes business development specialists manage and analyze the data to produce sales management information
(MI). Such MI could include:
For larger and well-established companies, especially in technology-related industries, the term "business development" often refers to setting up and managing strategic relationships and alliance
s with other, third-party companies. In these instances the companies may leverage each others' expertise, technologies or other intellectual property
to expand their capacities for identifying, researching, analyzing and bringing to market new businesses and new products, business-development focuses on implementation of the strategic business plan through equity financing, acquisition/divestiture of technologies, products, and companies, plus the establishment of strategic partnerships where appropriate.
Commerce
While business refers to the value-creating activities of an organization for profit, commerce means the whole system of an economy that constitutes an environment for business. The system includes legal, economic, political, social, cultural, and technological systems that are in operation in any...
, business development comprises a number of techniques and responsibilities
Moral responsibility
Moral responsibility usually refers to the idea that a person has moral obligations in certain situations. Disobeying moral obligations, then, becomes grounds for justified punishment. Deciding what justifies punishment, if anything, is a principle concern of ethics.People who have moral...
which aim at:
1. Researching new types of business/products/services with an emphasis on identifying gaps (existing and/or expected) in the mitigation of needs of potential clients (existing and/or new ones).
2. Attracting new customer
Customer
A customer is usually used to refer to a current or potential buyer or user of the products of an individual or organization, called the supplier, seller, or vendor. This is typically through purchasing or renting goods or services...
s
3. Penetrating existing market
Market
A market is one of many varieties of systems, institutions, procedures, social relations and infrastructures whereby parties engage in exchange. While parties may exchange goods and services by barter, most markets rely on sellers offering their goods or services in exchange for money from buyers...
s.
Techniques used include:
- intelligence gatheringBusiness intelligenceBusiness intelligence mainly refers to computer-based techniques used in identifying, extracting, and analyzing business data, such as sales revenue by products and/or departments, or by associated costs and incomes....
on customers and competitors - generating leadSales leadA sales lead, or Sales Lead, is the identification of a person or entity that has the interest and authority to purchase a product or service. This step represents the first stage of a sales process. The lead may have a corporation or business associated with the person. Sales leads are generic...
s for possible salesSalesA sale is the act of selling a product or service in return for money or other compensation. It is an act of completion of a commercial activity.... - advising on, drafting and enforcing sales policies and processSales processA sales process, also known as a sales tunnel or a sales funnel, is a systematic approach to selling a product or service. A growing body of published literature approaches the sales process from the point of view of an engineering discipline .Reasons for having a well thought-out sales process...
es - follow-up sales activity
- formal proposalProposal (business)A business proposal is a written offer from a seller to a prospective buyer.Business proposals are often a key step in the complex sales process—i.e., whenever a buyer considers more than price in a purchase.-Overview:...
and presentationPresentationPresentation is the practice of showing and explaining the content of a topic to an audience or learner. Presentations come in nearly as many forms as there are life situations...
management and writing - pitchSales pitchIn selling technique, a sales pitch is a line of talk that attempts to persuade someone or something, with a planned sales presentation strategy of a product or service designed to initiate and close a sale of the product or service....
and presentation rehearsals - business model designBusiness model designBusiness model design refers to the activity of designing a company's business model. It is part of the business development and business strategy process and involves design methods.Business model design includes the modeling and description of a company's:...
- strategic analysis
- account planning and performance monitoring system
- proposition development and campaign development
Business development involves evaluating a business
Business
A business is an organization engaged in the trade of goods, services, or both to consumers. Businesses are predominant in capitalist economies, where most of them are privately owned and administered to earn profit to increase the wealth of their owners. Businesses may also be not-for-profit...
and then realizing its full potential, using such tools as:
- marketingMarketingMarketing is the process used to determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. It generates the strategy that underlies sales techniques, business communication, and business developments...
- information managementInformation managementInformation management is the collection and management of information from one or more sources and the distribution of that information to one or more audiences. This sometimes involves those who have a stake in, or a right to that information...
(sometimes conflated with knowledge managementKnowledge managementKnowledge management comprises a range of strategies and practices used in an organization to identify, create, represent, distribute, and enable adoption of insights and experiences...
) - customer serviceCustomer serviceCustomer service is the provision of service to customers before, during and after a purchase.According to Turban et al. , “Customer service is a series of activities designed to enhance the level of customer satisfaction – that is, the feeling that a product or service has met the customer...
Business development is often related to growth although sometimes the optimal marketing strategy and objectives could be about downsizing the activity in an existing market or decreasing the sales volume of a selected line of products or services.
Business-development roles may have one of two modes:
- sales-oriented (client-facing); or
- an operational function to support sales.
In a sales role, business development could concentrate on developing strategic-channel relationships or on general sales. This emerges from analysis of the varied job description
Job description
A job description is a list that a person might use for general tasks, or functions, and responsibilities of a position. It may often include to whom the position reports, specifications such as the qualifications or skills needed by the person in the job, or a salary range...
s found in job-search engines, especially in the UK. In the US, the term "capture management" appears as an alternative job or role title, typically used when describing business development as an operational function to support the selling function of a company. The Association of Proposal Management Professionals
Association of Proposal Management Professionals
The Association of Proposal Management Professionals or APMP is a 501 non-profit membership organization. APMP was founded on August 14, 1989...
have produced the "Capture Management Lifecycle" that describes the process in three broad stages:
- pre-bid phase
- bid phase
- post-bid phase
Small to medium-sized
Small business
A small business is a business that is privately owned and operated, with a small number of employees and relatively low volume of sales. Small businesses are normally privately owned corporations, partnerships, or sole proprietorships...
companies often do not establish procedures for business development, instead relying on their existing contacts. Or people in such companies may assume that because they know people in high places that this will solve any business-development problems and that somehow new financial transaction
Financial transaction
A financial transaction is an event or condition under the contract between a buyer and a seller to exchange an asset for payment. It involves a change in the status of the finances of two or more businesses or individuals.-History:...
s will come to them. Such thinking can have significant ramifications if one cannot exploit those relationships, which very often remain personal or weak. Such a situation may result in no new sales in the pipeline.
Impact on Global Economy
Business Development professionalProfessional
A professional is a person who is paid to undertake a specialised set of tasks and to complete them for a fee. The traditional professions were doctors, lawyers, clergymen, and commissioned military officers. Today, the term is applied to estate agents, surveyors , environmental scientists,...
s frequently have had earlier experience in financial services
Financial services
Financial services refer to services provided by the finance industry. The finance industry encompasses a broad range of organizations that deal with the management of money. Among these organizations are credit unions, banks, credit card companies, insurance companies, consumer finance companies,...
, investment banking
Investment banking
An investment bank is a financial institution that assists individuals, corporations and governments in raising capital by underwriting and/or acting as the client's agent in the issuance of securities...
or management consulting
Management consulting
Management consulting indicates both the industry and practice of helping organizations improve their performance primarily through the analysis of existing organizational problems and development of plans for improvement....
; although many find their route to this area by climbing the corporate ladder in functions such as operations management
Operations management
Operations management is an area of management concerned with overseeing, designing, and redesigning business operations in the production of goods and/or services. It involves the responsibility of ensuring that business operations are efficient in terms of using as little resources as needed, and...
or sales. Skillset
Skillset
Skillset is the Sector Skills Council which supports skills and training for people and businesses to ensure the UK creative media industries competitive and productive.-History:It was founded 1992 and is jointly funded by industry and government...
s and experience for business-development specialists usually consist of a mixture of the following (depending on the business requirements):
- marketing
- legal
- strategyStrategic managementStrategic management is a field that deals with the major intended and emergent initiatives taken by general managers on behalf of owners, involving utilization of resources, to enhance the performance of firms in their external environments...
- financeFinance"Finance" is often defined simply as the management of money or “funds” management Modern finance, however, is a family of business activity that includes the origination, marketing, and management of cash and money surrogates through a variety of capital accounts, instruments, and markets created...
- proposal management or capture management
- sales experience
The "pipeline" refers to flow of potential clients which a company has started developing. Business-development staff assign to each potential client in the pipeline a percent chance of success, with projected sales-volumes attached. Planners can use the weighted average of all the potential clients in the pipeline to project staffing to manage the new activity when finalized. Enterprises usually support pipelines with some kind of CRM (customer relationship management
Customer relationship management
Customer relationship management is a widely implemented strategy for managing a company’s interactions with customers, clients and sales prospects. It involves using technology to organize, automate, and synchronize business processes—principally sales activities, but also those for marketing,...
) tool or CRM-database
Database
A database is an organized collection of data for one or more purposes, usually in digital form. The data are typically organized to model relevant aspects of reality , in a way that supports processes requiring this information...
, either web-based (such as the salesforce.com software-as-a-service
Software as a Service
Software as a service , sometimes referred to as "on-demand software," is a software delivery model in which software and its associated data are hosted centrally and are typically accessed by users using a thin client, normally using a web browser over the Internet.SaaS has become a common...
solution) or an in-house system
System
System is a set of interacting or interdependent components forming an integrated whole....
. Sometimes business development specialists manage and analyze the data to produce sales management information
Management information system
A management information system provides information needed to manage organizations efficiently and effectively. Management information systems involve three primary resources: people, technology, and information. Management information systems are distinct from other information systems in that...
(MI). Such MI could include:
- reasons for wins/losses
- progress of opportunities in relation to the sales process
- top performing sales people/sales channels
- sales of services/products
For larger and well-established companies, especially in technology-related industries, the term "business development" often refers to setting up and managing strategic relationships and alliance
Strategic alliance
A Strategic Alliance is a relationship between two or more parties to pursue a set of agreed upon goals or to meet a critical business need while remaining independent organizations...
s with other, third-party companies. In these instances the companies may leverage each others' expertise, technologies or other intellectual property
Intellectual property
Intellectual property is a term referring to a number of distinct types of creations of the mind for which a set of exclusive rights are recognized—and the corresponding fields of law...
to expand their capacities for identifying, researching, analyzing and bringing to market new businesses and new products, business-development focuses on implementation of the strategic business plan through equity financing, acquisition/divestiture of technologies, products, and companies, plus the establishment of strategic partnerships where appropriate.