Business development includes a number of techniques designed to create and grow an economic enterprise. Such techniques include, but are not limited to, concept and brand development, assessments of marketing opportunities and target markets, intelligence gathering on customers and competitors, generating leads for possible sales, followup sales activity, formal proposal writing and business model design. Business development involves evaluating a business and then realizing its full potential, using such tools as marketing, sales, information management and customer service. For a sound company able to withstand competitors, business development never stops but is an ongoing process.
Successful business development often requires a multi-disciplinary approach beyond just “a sale to a customer.” A detailed strategy for growing the business in desirable ways is frequently necessary, which may involve financial, legal and advertising skills. Business development cannot be reduced to simple templates applicable to all or even most situations faced by real-world enterprises. Creativity in meeting new and unforeseen challenges is necessary to keep an enterprise on a path of sustainable growth.
Small to medium-sized companies often do not establish procedures for business development, instead relying on their existing contacts. Other times they assume that because they know people in high places that their business development problems are solved and that somehow new business will come to them. The ramifications of such thinking can be significant in the event they are unable to leverage those relationships, which very often are personal or weak. Then they will have no new business in the pipeline.
Business development professionals are frequently found to have earlier careers in financial services/investment banking or management consulting; although many find their route by climbing the corporate ladder in functions such as operations management or sales.
The pipeline refers to flow of potential clients whom the company is in the process of developing. Each potential client in the pipeline is given a percent chance of success with projected sales volumes attached. The weighted average of all the potential clients in the pipeline can be used for staffing to manage the new business when it comes in.
For larger and more well-established companies, especially in technology-related industries, business development often refers to creating and managing strategic relationships and alliances with other, third party companies. In these instances the companies will leverage one anothers’ expertise, technologies or other intellectual property to expand their products, services, functionality and/or market reach without having to invest in building or acquiring these with internal resources. Revenues are typically shared in some sort of royalty arrangement. For example, a company with a successful technology will partner with a company that has an existing customer base and sales force, and together they will penetrate that market, sharing the proceeds.
The set of efforts 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.