What Are the Fundamentals of Entrepreneurship?
Business development, in its most basic form, can be defined as the ideas, efforts, and actions that aid in the improvement of a company. Enhancing sales, expanding the firm, increasing profitability through strategic alliances, and making strategic business decisions are all part of this.
“Business Development Executive,” “Manager of Business Development,” and “VP, Business Development” are all impressive job titles that you might hear in a company. Sales, strategic initiatives, business relationships, market development, business expansion, and marketing are all aspects of business development, but they are sometimes confused and incorrectly considered as the primary job.
Understanding Business Development Fundamentals
Sales, marketing, project management, product management, and vendor management are just a few of the departments involved in business development. There’s also a lot of networking, negotiating, forming alliances, and trying to save money. The business growth goals motivate and align all of these distinct departments and operations.
For example, a company may have a successful product or service in one location, such as the United States. The business development team evaluates the possibility of additional expansion. It is determined that the product or service may be expanded to a new region, such as Brazil, after all due diligence, research, and studies.
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Sales
Salespeople concentrate on a certain market or a specific (set of) client(s), generally with a specific revenue goal in mind. Business development evaluates the Brazilian markets and believes that $1.5 billion in sales can be accomplished in three years. With such objectives in mind, the sales department uses sales methods to target the new market’s consumer base.
Marketing
Marketing is the process of promoting and selling things in order to sell them to end users. In order to meet sales goals, marketing plays an important role. A marketing budget may be allocated as part of a business development initiative. Cold phoning, personal visits, roadshows, and free sample distribution are all possible with larger marketing budgets. With a smaller budget, passive marketing methods such as restricted internet ads, print ads, social media ads, and billboards are more common.
Partnerships or Strategic Initiatives
Will it be more sensible to form a strategic alliance or partnership with local firms already operating in the region to enter a new market on your own by clearing all required formalities, or will it be more sensible to form a strategic alliance or partnership with local firms already operating in the region? The business development team, with the help of legal and financial departments, assesses all of the advantages and disadvantages of the various possibilities and chooses the one that best serves the company.
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Business Planning/Project Management
Is a new facility in the new market required for business expansion, or will all products be created in the base country and then imported into the targeted market? Will the latter option necessitate the construction of a second facility in the base country? The business development team makes these judgments based on their cost and timeline evaluations. The project management/implementation team then gets to work on achieving the desired result.
Management of Products
Regulatory and commercial requirements differ from country to country. In India, for example, a drug with a specific composition may be permitted, but not in the United Kingdom. Is a customized—or entirely new—version of the product required for the new market?
As determined by the corporate strategy, these requirements drive the activity of product management and manufacturing departments. As part of a corporate development strategy, cost considerations, legal permissions, and regulatory conformance are all examined.
Management of Vendors
Will the new company require the services of other vendors? Will the transportation of a product, for example, need the use of a dedicated courier service? Will the company join with a well-known retail chain to sell its products? What are the fees for these engagements? These issues are being worked on by the business development team.
Lobbying, networking, and negotiations
Soft skills competence may be required for a few business efforts. Lobbying, for example, is permitted in some places and may be vital for breaking into the market. Other soft skills such as networking and negotiating with third parties such as vendors, agencies, government authorities, and regulators may be required. All of these projects fall under the category of company development.
Cost-cutting
It’s not simply about boosting revenue, goods, or market reach when it comes to business development. To boost the bottom line, strategic decisions are also required, which may include cost-cutting strategies. An internal audit that reveals high travel expense, for example, may lead to adjustments in travel policy, such as using video conference calls instead of on-site meetings or using less expensive means of transportation.
Non-core activities, such as billing, accounting, financials, technology operations, and customer service, can be outsourced to save money in a similar way. Business development includes the strategic partnerships required for these projects.
The Plan of Action
The above business development scenario is specific to a business expansion plan, which has an impact on practically every unit of the company. The establishment of a new business line, new sales channels, new product development, new alliances in existing/new markets, and even merger and acquisition (M&A) decisions are all examples of similar business growth aims.
In the case of a merger, for example, significant cost savings can be achieved by combining the shared tasks of the two organisations’ production, finance, and legal departments. Similarly, a company with five locations in a city can consolidate its operations into a single huge site, resulting in significant cost savings. However, if the new site isn’t convenient for everyone, would this result in staff attrition? It is the responsibility of the business development team to evaluate such concerns.
Business growth, in essence, entails high-level decision-making based on a realistic assessment of all potential changes and their consequences. It attempts to improve overall business prospects, which drive the operation of the various business units, through new ideas and activities. It’s not about selling, marketing, or collaborating. Rather, it is the eco-system that encompasses the entire company and its numerous divisions that drives overall growth.
The Perfect Match for Business Growth
A business developer can be the owner(s) of the company or a specific employee(s) who works in business development. Anyone who can create or suggest a strategic business change that will add value to the company can contribute to its growth. Businesses frequently urge staff to come up with new ideas, which can boost the company’s overall potential.
External incubators, business development companies (BDCs), and small company development centres are also used by businesses (SBDC). These organisations, on the other hand, only help with business setup and fine-tuning throughout the early phases of the process.
What Motivates Business Development?
There are no conventional procedures or guidelines because the scope of business development and activity is so broad. Everything falls under the business development umbrella, from finding new prospects in external markets to implementing efficiencies in inside business procedures.
Business development professionals must come up with innovative ideas, however their suggestions may be impracticable or unrealistic. It’s critical to be adaptable. Employees in charge of business development should seek out and accept constructive criticism, and keep in mind that this is a process.
