Key takeaways
- Business development is often viewed as only sales or marketing.
- However, it's a mix of the entrepreneurial mindset, sales and marketing.
- Business development is more of an optimal mix.
- Find out where the money is and develop a clear strategy for getting it.
Entrepreneurs should always be in the business development mode, no matter what stage of the firm's business life cycle. The goal is to grow the business, and the entrepreneur serves as the chief of business development. When you are up against giants in the marketplace and demanding customers, your only game is to roll out a growth strategyā€”your formula for success.
Business development function
Entrepreneurial ventures grow much faster than large bureaucratic organisations. The main reason is their focus on agility and innovative, value-creating ways. But to continue the growth trend, the firm's leader must hit the road, understand market needs, and develop strategies to capture new customer opportunities.
The business development function looks at comprehensively upscaling the business, requiring a cross-functional approach. The leader must understand how to spot new market trends and develop new products or modify existing ones within the firm. Creating a new product is not an inside job but requires testing and iterating until customer acceptance.
It is generally accepted that one can grow the top line by increasing market share (market penetration), finding new markets (targeting non-customers) or developing a new product. Often, the best move is to use your product or prototype and try to look for customers. There may be more non-customers out there.
Business development is not a part-time function. If you spend too little time in customers' faces or with partners, you will have many loose ends. Customers do not buy in a single visit; some large organisations have long purchasing cycles, and innovative products might disrupt the buyer's business. They would require solutions to minimise its implementation. Let's say you introduce an IT solution that lets customers order online at a lower price than a salesperson can. Then what does the prospect do with their sales team?
It would help if you were the venture's first business development manager. Do not delegate this function to your team in the early days. Your goal is to have the market knowledge and be the only person with broad industry information (and the mindset) to develop an integrated growth strategy. Customers sometimes tell you the 'darndest' things that field marketing people might miss. It would help if you had an unfiltered perspective at all times.
Market development
Entrepreneurial marketing is different from its traditional counterpart. The former focuses more on innovation, developing better ways and products. It involves another type of market research. Traditionalists would survey the market, but entrepreneurs often recognise that customers do not always know what they want or cannot see the next big thing. Therefore, entrepreneurs would test the pre-totype (business idea) or prototype (rough product), get feedback, refine the product, and then go to market.
Where do entrepreneurs start in the business development function? If you are at the start-up stage (or testing an innovative product), developing a marketing plan might not be the best approach. As you enter uncertainty, you need information to create your game plan. Things are fuzzy, and numbers will be guesswork, so don't try to project from nothingness.
An excellent place to start the process (an iterative one) is to ask a fundamental but often overlooked question. Where is the money? This essential question is hardly ever asked. But entrepreneurs go further as they identify high-potential customers and how to unlock value that other firms cannot.
Sales development
After identifying where the money is, which is a targeting question, you need to develop a strategy. The strategy issue is: How to get it (money)? It would help if you avoided hard selling (no one likes to be sold to, but they do want a great buying experience). Instead, it is about subliminally learning about your target and shaping your innovative product.
Hitting the road means something different with today's internet revolution. Digital marketing opens new doors and avenues for business development. Suppose you wanted to test if backyard gardening has potential among environmental enthusiasts. You can open a landing page where they can sign up as subscribers to your free monthly newsletter. But you want their names and email addresses. This act marks the beginning of building your email marketing database.
Why open a landing page (a standalone page with just data capture)? But why not direct them to your website instead? That would be a big mistake, as they will hop from page to page and exit. A landing page invites them to opt in, and if you offer something free, they will share their contact information. If you have a strong LinkedIn following, mention your new newsletter and include the landing page as a link. After you have sent opt-in prospects free content, invite them to your first webinar, or, if you are confident enough, sell an online training workshop. You might be saying that emails often get deleted or not responded to, and you are right, so schedule multiple reminders. Expect fewer than 5% to join the event, so build an extensive database through frequent events and newsletters.
Entrepreneurial development
Entrepreneurial organisations often change their models. It is part of their agility strategy: as the business grows and you have more issues, you need to delegate the business development functionā€”a tricky move. Not that you do not want to get out, but the role requires more people. Your business development team has to take over, and you become more of a mentor, transferring your skills to others. This act is not as easy as it seems, and hiring marketing and salespeople who may not know how to combine these functions, plus use them in an entrepreneurial way. In a way, you were practising entrepreneurial business development, and a mindset change is required to get your staff to think and act as you do.
Business development is your primary strategy for growing your organisation. It's a simple formula: marketing plus sales, with a dose of entrepreneurial thinking. If you leave anyone out or mix them incorrectly, you have a recipe for slower growth, and your upscaling strategy will fail.
Webinar on Business Development
If you want to find out more about using business development strategies to grow your enterprise, register for "What Really Is Business Development?"
We will cover:
- Business development explained
- How some ventures scale based on growth strategies
- A few implementable strategies
- Date: 3 February
- Time: 6.00 p.m. (AST)
- It is a FREE event
Sajjad Hamid is an Entrepreneurship Educator who supports entrepreneurs in scaling their ventures. In his spare time in Trinidad and Tobago, he cultivates organic tropical fruits and vegetables, practising sustainable farming in his home garden.
He is the author of Build Your Legacy Business: Solopreneur To Family Business Hero. Sajjad is a Fellow of the Family Firm Institute. You can contact him at [email protected] or visit www.entrepreneurtnt.com.
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