WHAT IS BUSINESS DEVELOPMENT?
Business development is the act of researching, identifying, developing, and scaling business opportunities within an organization.
HOW BUSINESS DEVELOPMENT IS ACHIEVED.
Business development explores markets, partnerships, and customer’s demand to create sustainable and long term values for an organization. In simple terms, any endeavor or action, taken to develop an organization or make business better in any way, means business development. This includes introduction of policies, strategic management, effective marketing, and the host of others that will translate to increase in company’s revenue, profitability and growth.
This could also mean improvement of organizations services or product to build authoritativeness and trustworthiness. I think some organizations have forgotten that reputation is a key business development ingredient and if paid much attention to will drive massive growth and profitability. Business development incorporates both internal and external; but all the same, the foundation should be internal.
WHO IS A BUSINESS PROFESSIONAL?
Business development professionals are persons, who have succeeded or have huge experiences in the different areas of business. This could be in marketing, sales, business planning, finance, Management, Investment, accounting, negotiations, Mergers and acquisitions, legal, etc.
WHO IS A BUSINESS DEVELOPER?
A business developer is a person who identifies new business opportunities, and goes ahead to design and implement strategies to build it.
BUSINESS DEVELOPMENT COMPONENTS
Marketing
Marketing is used to attract customers and this makes it a very important component in business development giving the fact that it fosters exchange of relationship between customers and the organization, and at the same time identifies, anticipates, and proffers satisfaction to the customers. Without marketing, sales will be hard, and organization’s revenue and growth will suffer. This is why marketing remains an integral component of business development.
Sales.
Sales department of an organization studies and identifies the sales worth of a market, providing guidelines to convert marketing to sales. They create sales goals of a company, and develop steps and strategies to achieve it. Without this arm, the true sales worth of a market and how to harness it will be hard.
Finance.
Finance which is the management of money is a key component of business development. Though the basic meaning of finance is money management, it also incorporates the sourcing of funds at the same time. For instance, if a company, government or an organization has a project or product that they plan to launch, it is the finance professionals who are tasked with the responsibility to propose the kind of financing or financial instrument that best soothes the project and how to raise it. So finance is very broad and its meaning surpasses just the management of money. Without finance, business development will be a mirage, as it is mostly driven by finance. Finance is a broad subject and basically split into three; Personal finance, corporate finance, and public finance but we are not going to be discussing that in this write-up.
Mergers and Acquisitions (M&A)
Though this falls under strategic management, I would like to shine light on it separately because of its importance in business development. Sometimes, it becomes necessary for companies or organizations to join forces with each other, or relinquish its ownership to another to move on to another business idea or innovations. This is where M&A comes in. Most times, it’s important for companies to have professionals or consultants who understands when a company has come to its peak and the need to sale or when it’s become necessary for a company to consolidate with another to become more stronger, and achieve more results. These professionals who are tasked with the responsibility of spotting companies with huge potential to acquire or merge with to function better are very necessary in the journey of business development, more especially for big companies. M&A allows enterprises to grow or downsize, and change the nature of their business or competitive position.
Negotiations.
Another important element in business development that is mostly neglected! The growth of any business or companies involves strategic partnerships and quid pro quo. Having individuals who are experts in negotiation, networking and lobbying helps in getting betting deals for a company and eventual increase in revenue. For example, a big retail chain in the USA may want to launch into the African market and may not need to reinvent the wheel, but partner with a local brand who already has the platform. In this situation a very good negotiator who has adequate understanding of business negotiations and networking will get a better deal for both companies more than the everyday guy.
Furthermore, say a mining company wants to start mining in a certain village; the best man to broker the negotiation is an expert negotiator or lobbyist who understands the right words to use and the right people to meet to make the negotiation stick. This shouldn’t be taken for granted; there are individuals who understand the art of negotiation more than others, and a company whose goal is to grow will do well to engage them when the need arises.
Management.
Every company or organization that must grow must have a strong management team. A team of experts and individuals who understand the art of management. This includes personnel management(understanding, grooming and managing staff to bring out the best in them and become more productive), Strategic management which involves the creation, preparation, and implementation of companies goals and decisions taken by top management of the company on behalf of company shareholders or owners to drive the projected output with the available resources.
Without management, a company will have no direction. It is the duty of the strategic managers to provide overall compass to an organization. Their job includes the mapping out/outlining of organization’s objectives, developing policies and plans to achieve those objectives, and then allocating resources to implement the plans. Just as business is progressive and dynamic, so is management, especially strategic management. It is important to state categorically that Management is not static. Overtime, models have been developed to help strategic managers with decision making. The framework of this model necessitates a feedback loop to observe and check implementation and inform the next course of planning.
According to Michael Porter, there are three major principles underlying strategy which are; creating a “unique and valuable [market] position”, making trade-offs by choosing “what not to do”, and creating “fit” by aligning company activities with one another to support the chosen strategy. That being established, underscores the need for management which will not be complete without strategic planning. Talking about strategic planning, we mean, the administration of formulated plans and strategies to achieve organizations objectives. It is very analytical and involves the harnessing of data. It is with this data that thinking is performed, and plans and strategies formed. Any organization that explores the wealth of management will surely succeed in the race of business development…it is indeed a very key component that must not be overlooked in anyway.
Accounting.
Financial record is important to the health of every company. Any organization that does not take its financial records of business transactions seriously will collapse without even knowing it, because he will fail to notice the cracks on the wall before the eventual fall of the building. You don’t want to play with your financial records if you want to grow as an individual, company or a government.
FACTORS THAT AFFECT BUSINESS DEVELOPMENT
Business development or its components is not a subject that can be summarized in one book no matter how you try, but understanding the basics and applying it accordingly is what makes the difference. We will not overlook the fact that business development is affected by many external factors like environmental factors and government/political factors.
Environmental factors
Environmental factors like storms, bushfires, tsunami and other environment hazards cause lack of resources, increase inflation, and this hurts business development. For instance, from November 1st 2019 to 31 January 2020 about 27.2 million acres of bush, forest, and parks across Australia were burned. In New South Wales alone, fire affected about 12.5 million acres. In Victoria, almost 3 million acres have been burned. This is a huge environment impact to business growth especially in the Agriculture and Wildlife sector.
Political factors
Political factors can be crazy sometimes. With governments constantly making policies to champion best practice ethics, most companies are affected. In as much as Planning Systems are systems set up to regulate businesses, sometimes the regulatory laws are high handed and affect business growth.
Also, in regions where there is political instability, most companies suffer the volatile business ethics laws and policies that are constantly changed by every new government. There are too many government factors that affect business growth like; Bureaucracy, tariffs, trade control, employment law, anti-trust law, corruption level, tax policy, health and safety laws, Intellectual property law, regulation and deregulation, import restrictions on quality and quantity of product, pollution and environmental regulation laws, and many more.
Conclusively, I would like to close by reiterating that reputation that an organization builds for itself is very paramount to its growth. Companies should focus more on their products and services, making sure that it benefits their customers, and not just for the sake of profit making.
Companies should also invest more in the internal growth of its workforce; hiring the best hand and training their workers to develop fine skills that will enable efficiency and productivity of the company.
Business development is championed by product and services a company offers and the people who represents her brand. A company that has reputable products and services, and the best people handling their affairs will have guaranteed growth.
