Business development is a dynamic concept that has evolved overtime. It can mean different things to marketers, managers, shop floor workers or the CEO of an organization. Regardless of the varied meanings, it is a concept that focuses on moving a part or the whole of the organization from one stage to another in an incremental manner. This article focuses more on how start-ups can develop from inception to maturity. This does not imply that already existing businesses cannot benefit from this article, but the main focus is on small business that are below five years.
What is Business Development
According to Wikipedia, Business development entails tasks and processes to develop and implement growth opportunities within and between organizations. It is also the creation of long-term value for an organization from customers, markets, and relationships. Business development further can be taken to mean any activity by either a small or large organization, non-profit or for-profit enterprise which serves the purpose of ‘developing’ the business in some way.
From study.com, business development is defined as growing a business by making it more competitive, expanding products or services, and/or focusing on specific markets. In other words, business development is the practice of growing a business beyond its current state.
Having looked at the following views on business development, it is clear that the core essence of focusing on business development is to ensure that the organization moves from one level to another. Organizations are established to grow usually from start-up to a level of maturity.
Three Core Elements of Business Development.
It has been established that business development focuses on creating strategies that will propel the organization to greater heights. However, this cannot be achieved without having a clear understanding of the core elements that make up business development. Without proper understanding of theses core elements, it will be difficult for small business to craft and implement strategies that will aid them in business development. These three core elements of business development are 1) Customers, 2) Markets and 3) Relationships.
One thing that should be active in the minds of start-ups is that the products they are rolling out or the service they want to render should be directed to specific persons. These persons are customers. Customers could be potential or active customers and could also be individual or corporate customers. Potential customers are those that have not had any transaction with the organization but are willing to when provided with the right stimulus or signal. This stimulus or signal could be low price, extra value, discount or promise of after sales service. Active customers are those that already have transaction history with the business i.e. they have made purchases with from the businesses and are willing to remain with organization when provided with value added or improved services. Individual customers refer to physical persons that patronize the services of the business while corporate customers are existing businesses or companies that make purchases from the business. In this case there are two businesses A and B. Business A produces goods that serves as raw materials to Businesses B. Thus, Business B is a corporate customer to Business A.
Another important concept that should remain alive in the minds of entrepreneurs and small businesses is market. The understanding of this concept is important because customers leave in specific markets. You can’t find customers for your product in every market. It is therefore imperative that you understand your market by evaluating existing markets and picking up your target markets. Customers could be found in physical markets which could be location based. Meaning that for you to be able to sell your products you need to go to specific locations to meet your customers. Customer can also be identified based on their lifestyle, demographics or buying mindsets. Thus, as a business person who is willing to make the most of every opportunity, there is need for you to have a clear understanding of your markets because this is where you are going to find your customers. Your customers could be found in the church, school or anywhere, your job is to ensure you know who your customers are or will be when you find one.
Relationships are important because customers may not or will not just jump on to any offer you make to them without prospects of establishing a relationship with them. The reason you have to establish a relationship with your customers is that you want them to remain with you irrespective of any competitive offer they will get elsewhere in the market. Therefore, before you jump up and give customers any offer be sure to understand that you want to build a relationship with them as this will guide you into growing your business. One thing you should understand here is that relationships don’t just happen automatically, you have to put in the hard work and the smart work. Customers are to be persuaded and not forced to take your offer. What will make customers to take your offers depends on the relationship that you establish with them. The relationship you want to establish with your customers in turn is based on extra values, discounts, samples for beta testing and extra service that you want to offer.
Finally, as a start-up or an entrepreneur in deciding to craft strategies to help develop your business, you need to consider the three core elements of business development which are your customers, the markets where you will find them and the relationship you want to build with them. When this three are clearly understood, it will be easier to develop models that will rake in profit for your organization.
In subsequent posts, we will do justice to other aspects of business development.