Most people and companies very often don’t understand the function of Business Development, indeed It is often misinterpreted with Sales. I think that a very precise definition is proposed by Scott Pollack in his post “What, Exactly, Is Business Development?”In this post, Pollack outlines the Grand Unified Theory of business development. Here the definition suggested by him: “Business development is the creation of long-term value for an organization from customers, markets, and relationships”. I do love it. Business development is a quite complex concept, it is not a simple task processed by a machine, it’s a strategic task that requires a complete understanding of the context and the interactions between all the elements of value of a company. Since nowadays sustainable economic growth is a very attractive concept to which many companies are aspiring, they cannot spare business development that represents a major influencing factor for strategic decisions with results that can be appreciated in the long term. Anyway, it does not mean that cash flow doesn’t have a relevant role, indeed many SMEs need money in the short-term to survive, but without a lasting vision, this is not enough.
Let’s see now in more practical terms which factors the Business developer should take into account to make decisions.
- First of all, a clear state of the business in terms of SWOT analysis (strengths, weaknesses, opportunities, and threats) is essential, as well as the status of the overall industry and future projections. SWOT is the real foundation for assessing the internal strengths and weaknesses and at the same time the opportunities and threats from the external environment. This is a relevant step because it gives us a detailed overview of our business and helps us consider every factor that may possibly affect our project.
- Secondly, BD should have in mind a complete picture of the competitors in the market, indeed it allows him to understand the risks in the market and the opportunities that can arise. It’s really useful to know both the very crowded areas where you can’t win and the areas where anyone can’t beat you.
- As a third point, BD must deeply know the customer profile he’s looking for. He should take into account as many parameters as possible to better define the ideal customer, which could be – for example- type of industry, area of expertise, number of employees, countries covered, annual turnover, market position, company growth, and so on.
- As a fourth point, BD should always explore new markets and look for new opportunities. Especially in the pharmaceuticals field, BDs engaged in out-licensing activities should constantly try to enter new markets to expand the presence of their companies’ products as much as possible, while the ones involved in in-licensing activities should have a keen eye on the possible attractive assets that are offered in their field of work.
- As a fifth point, BD should take into account the long-term view regarding any initiatives proposed. The opportunities created must maintain value in the long term so that this value can flow endlessly. This is the only way to have success and make your company constantly grow.
Finally, don’t forget that BD is the first contact point for the creation of new partnerships. Building solid relationships is fundamental to keep the flow of value in the long term. In the professional world, we all know that lasting relationships don’t happen and build without the dedication and a continuous effort. There are many practices to get these results, but what should never be missing is attention to the customer, by treating any client as an individual, and the creation of customer’s trust: indeed BD doesn’t sell but discuss and solve the real customer’s issues.