The long-term viability of your business will, at its core, rely on your business relationships. This is what Business Development is all about – building long-term and lasting relationships with customers, other businesses, colleagues and the market at large.
There are many different theories and techniques associated with successful business development; here are some of the key factors to remember.
1. Business development is not sales.
This may be the hardest factor to comprehend. How could something that will inevitably lead to more sales and revenue not involve actual sales? Simple, it’s about relationships. Business development is not about closing a specific deal or selling a particular product: it’s the establishment of an ongoing relationship that is beneficial to the business and, ultimately, the customer.
In other words, business developers don’t pick up the phone when they have a new product to sell – they pick up the phone when they don’t.
For more information regarding what business development is and is not, Docstoc offers an online course that provides a terrific overview.
2. Not everyone can do it.
As a small business owner, you may struggle building partnerships. If you have the budget to hire one, a professional business developer can help immensely with securing large deals. When hiring a business developer, look for the following characteristics:
- Industry Contacts: It’s easiest for you and for them if your biz dev person has existing contacts in your business’ primary industry. Check LinkedIn to see what sort of connections they have in the field, and ask them about some of the other clients they’ve worked for.
- Instant Rapport: This may be hard to judge, but a face-to-face interview is a great way to determine if someone has the ability to build relationships. When interviewing candidates, pay close attention to how you react and interact with them. If you don’t want to spend more than a few minutes speaking with them, your clients won’t either.
- Solid Business Sense: You don’t necessarily need your business developer to make big sales, but you will need them to understand your business, including your sales cycle, revenue goals, projections and overall mission.
3. The Business Development Cycle is different than the Sales Cycle.
There are three steps to the business development cycle that should be observed.
- Scouting: Just like it sounds – the business developer is looking for and seeking out opportunity. This extends beyond identifying customers and competitors, and includes understanding the current market, evaluating the best customers for your product or service and identifying potential business partnerships. Depending on when you hire your business developer, he or she can be an extremely beneficial asset when designing your products and services, as he or she has deep knowledge of what is happening in the marketplace and amongst your competitors.
- Testing: After identifying opportunities, the business developer and your sales team will close deals, and that is when testing begins. This is when it’s important to closely examine your scope of work agreements and your assumptions regarding what will and will not be necessary for you to maintain strong, lasting relationships with your partners and clients. Internal collaboration during this phase is crucial, as your business developer, sales staff and account team need to communicate constantly.
- Scaling: Once you’ve tested a few client deals and have a strong grasp on what does and does not work, your business developer can start to scale products and services for your customers. This will enable the sales team to focus on selling specific packages or deals, as well as shorten your sales cycle.
4. Internal support is critical.
It may be easy to assume that your business developer works within a bubble and once he or she has handed off a client, the work is done. This is simply not the case.
While the business developer’s primary job is to identify opportunity, the knowledge he or she has gained while scouting perspective clients will be invaluable to your sales staff and your management team. Clients will not want to repeat themselves and will be resistant if they feel that working with other members of your team (aside from the business developer) is like a totally new experience. Remember that they have spent time cultivating this relationship too, and you owe it to them to respect their time by sharing all of the knowledge your business developer has gained.
Also be sure to provide the business developer with relevant resources and updates on the progress of the business; this will only help them arm themselves with talking points when going into meetings with potential partners or clients.
5. Establish specific measures for success.
Your business developer needs to understand how his or her work will be evaluated, and you need to understand what is considered a success. This can be more difficult to define than other positions, so let the business developer help outline their own definition of success. Remember these tips when designing your business development framework:
- The sale is not the point. In other words, evaluating your business developer’s performance is not as easy as looking at a balance sheet (considering some biz dev efforts may take months or even years to pay off). The qualitative nature of his or her work will be just as, if not more, important as the numbers. What is the quality of the relationships he or she has cultivated? In the end, the number of relationships will not be as important as the business potential of those relationships (i.e. one $10,000 account is more beneficial than five $1,000 accounts).
- Internal and external factors could affect performance. It is important that you closely examine how much of the success or failure of an account rests with the business developer. Once a client is a customer or a partnership is formed, the account is effectively out of the business developer’s hands. Don’t make the mistake of penalizing your business developer if the sale or relationship is damaged while under the purview of other members of your organization.
6. Establish clear goals.
Make sure you and your business developer understand what you hope to accomplish over a specified timeframe. How many sales or opportunities do you want to identify over the month, the quarter, the year? While it is not always about the sale, it is important to set clear, achievable goals that will help to impact your bottom line while also furthering the visibility of your business.
A good business developer will help your business succeed in the short-term; a great business developer will set you up for ongoing, long-term success. By following the steps outlined here and working closely with you business development team, you’ll be able to establish a strong business development model.