Business development is a part of business that is focused on developing and implementing growth opportunities within the organization. Because of this focus on growth, business development is unfortunately often confused with sales. In reality, business development professionals have a much broader focus than just selling more products and services. By thoroughly understanding business development, you’ll be able to encourage significant growth opportunities within your company.
What is Business Development?
Now that we know that business development isn’t simply sales, what exactly is it? It’s important enough that companies have employees who might be described as the “Vice President of Business Development.” Since this is distinct from the Vice President of Sales, how can we define business development?
A clear and simple way to describe business development is that business development is the creation of long-term value for an organization from its customer base, market opportunities, and relationships.
Long-term value describes growth, income, and other forms of value over time. This goes far beyond a single sale or even a year’s worth of revenue. It focuses on value over time, and how that value can continue to increase. Business development focuses specifically on creating value that doesn’t bring in income today at the expense of long-term growth tomorrow.
Customers and sales do play a role in business development, but only a partial one. Clearly, customers are the lifeblood of the business, but business development extends beyond simply growing sales.
Market opportunities exist in all markets, both geographical and demographic. By keeping a pulse on the things happening in various markets relevant to an organization’s products and services, business development can allow your company to take advantage of new opportunities.
Relationships are the final piece of the business development puzzle. Building, managing and leveraging relationships, both inside and outside the organization, is vital to long-term growth. Relationships include the company’s connections with partners, customers, employees, the press, and more.
The Relationship Between Business Development and Sales
Now that we clearly understand what business development is, we can better describe the relationship with sales. Clearly the sales department is vital to the long-term value that business development professionals seek to create. However, business development is more of a partner to sales professionals.
Many times, business development staff help sales with their lead generation and sales processes. Because business development employees understand a wide scope of market opportunities and help build relationships within and outside the organization, they are uniquely positioned to advise and assist the sales department.
Far from taking the place of the sales department, the business development staff help the sales professionals be more effective in their work. This not only helps guide the short-term sales for the company, but helps those short-term efforts be in alignment with the long-term needs of the organization.
Why Establishing Business Development is Important
Now that you know that business development is not simply sales, it’s easy to see that your organization needs both a sales department and a business development staff. If you only have sales staff, you may find that your company makes decisions that have a short-term positive impact on growth, but long-term aren’t helpful to company profitability.
Many sales employees have only short-term motivation. They are rewarded based on their sales in a particular month, quarter, or year. As a result, they will be focused on short-term results. By combining the efforts of the sales department with business development employees, you’ll ensure that the processes and strategies implemented are focused not only on short-term results, but on long-term sustainability.
Finally, a business development department is important because you’ll want the organization’s relationships managed well, both inside and outside the company. A business development department can help employees feel engaged, the press satisfied, customers cared for, and partners respected.
If you’re looking to establish business development for your products and services, I can help you create a program that’s efficient and scalable. Contact me or schedule an appointment online today!