Business development is a role that covers a multitude of sins, and CEOs are frequently in a quandary when it comes to choosing a suitably qualified person for the job.
What exactly should they be doing, for example, and how should their success or failure be measured? Here are a few useful tips that should be kept in mind when thinking about business development strategies, especially for start-ups for which it will probably all be new territory.
Not simply sales
Where a sales strategy is usually focused on driving revenue, business development is mainly concerned with forging fruitful partnerships that will enable the necessary leverage for driving that revenue or product enhancement or distribution.
Cometh the hour…
There are three main stages in the process of commercialization and each requires a different, though essentially related, set of skills:
This is the earliest phase of a company’s development, when routes to market are being identified and feedback is critical. At this stage, a key skill is being able to work productively with engineering and product teams.
Analytical skills are most needed here, as some deals will have been set up and outcomes need to be tested before the business can be scaled. Raw data has to be knocked into some meaningful shape through effective analysis to identify company strengths.
Scaling is all about replicating deals and getting in place a support structure that is stable and robust enough to carry the organization’s vision to fruition. This can only be done after data has been harvested from the early test bed deals, and a path to goal achievement validated.
Proactive management is a crucial factor in successful deals, and the account manager post-deal may be someone working in a different capacity to the business development manager responsible for the deal in the first place.
Qualitative and quantitative factors
Chances of business success dramatically increase when qualitative value propositions are brought into play, such as lower costs, more customers and increased revenue. You can easily track this with QuickBooks, a small business accounting software very easy to use. Even if the market likes a product, it will be less likely to pay for enhanced user experience based only on qualitative data.
An effective business developer will be able to harness internal resources to meet the expectations and goals of a partnership. Lack of support is often the cause of failure, and from the start everyone involved in the project needs to take ownership for some identifiable aspect of it so that fingers will not be pointed if disaster strikes.
The opportunity assessment framework
Have clear and measurable goals so that everyone on the team knows why the deal is taking place and there are no awkward questions about why conversion is happening below projections for instance.
Care in dealing
Spotting false signals is a useful skill for any dealmaker, for example where the greater opportunity is effectively clouded by a certain amount of revenue and market momentum. A poor dealmaker, on the other hand, will miss the bigger opportunity by concentrating the company on lesser targets and priorities.
Business opportunity versus risk requires legal counsel and business development assessment and the ability to explain with clarity the various trade-offs to the management team. A legal agreement will include numerous commercial terms and opt-out clauses that need to be understood, and here the right person with such skills is again crucial.
About the Author: John Camarrade is a Canadian writer that moved to Indonesia. John is interested in business development and he is currently consulting for several start-ups in the South East Asia.