What Business Development Is & Does – The Ultimate Guide
Business Development is a role or career path that provides value to businesses, but there is no consensus on a clear definition. Many people believe that Business Development, sometimes referred to as BD or BizDev, is sales while others believe it is creating external partnerships that benefit your business. Still, there are plenty of people that still aren’t sure what BD actually is or does.
According to the CEO of Firneo Scott Pollack, who has been a leading educator and innovator in the BD world for nearly a decade, Business development is:
“The creation of long-term value for an organization from customers, markets, and relationships.”
This definition zones in on the most important piece of what BD does, which is to create long-term value through a myriad of strategies and methods.
In this article, we will cover all of the things that Business Development entails and provide some common jobs and strategies that BD professionals use to be successful in this career path, but keep in mind that all of this continues to evolve. If you’re unfamiliar with some of the business development terms used throughout this guide, please first read our article on common BD terms.
What Business Development Is & Does
Business development roles can bring on a lot of responsibility without a lot of clear direction, often creating a very wide scope of ideas and activities. The role itself is typically most often associated with bringing in revenue, but the most important part of what BD actually is involves the creation of value.
A strong BD contributor will work with every department in the organization so that they can understand the strengths and weaknesses of the product and current operational process in order to best create long-term value. The long-term value we’re talking about is almost always revenue but it can include things like brand recognition or strong public relations activity.
An example of an alternative value would be creating a partnership with a non-profit to do something good for a community. The long-term value could be good will with that community that leads to many customers throughout the time period of the relationship.
Creating Value Through Partnerships
A lot of BD activity is centered around the idea of creating partnerships with other businesses or organizations which have a long-term impact on something the business is trying to achieve. This is often considered to be one of the most creative aspects of business development because you can connect with other businesses and find ways to mutually benefit each other in a number of ways. It’s a back-and-forth negotiation that sometimes can take months or even years to materialize.
Business Development vs Sales
BD is not equal to what most people are talking about when they refer to a “sales” team or function. Some businesses have decided to call all revenue-generating activity “sales” but a sales team is typically tasked with the direct outreach to potential customers with the purpose of moving those individuals or businesses into or through the sales pipeline. Business Development, on the other hand, is typically the creation of more long-term growth and opportunities through strategic initiatives.
Additionally, BD is tasked with keeping the value creation for the long-haul of the customer relationship, while the Sales team is tasked with closing customers today. A good Business Development function will keep the floods of potential customers open through strong relationships and strategic partnerships coming not just today but well into the future.
Both Sales and BD are tasked with increasing revenue for a business but they are asked to take on very different parts of the sales cycle. You can think of BizDev as the role of creating a lot of potential throughout the funnel and the Sales team as the end of the line where a customer makes their final buying decision.
Most Common Business Development Strategies
Business Development continues to become a very popular role in many scaling businesses because of the vast amount of strategies and tactics that you can use to achieve your end goal of growing value. While we will continue to share information around the successful tactics that are happening around the world of BD, we have compiled a short list of the most commonly used strategies and purposes of a BD team right now and listed them out below.
Strategic partnerships continue to be more and more important to an active BD team as the role of business development has evolved over the last decade. Strategic partnerships now pave the way for both inbound and outbound lead generation and help the Sales team effectively close potential customers at higher rates than other activities.
Essentially, a strategic partnership between two businesses is the sharing of resources to achieve a common goal. This can come in an almost unlimited amount of ways which is why building strategic partnerships is where creativity and strong negotiation skills become extremely valuable to a BD professional.
Patti Naiser, CEO & Head of BD Activity at Senior Home Transitions, says “An example that is popularly used in the business world is strategic partnerships, or the partnering with businesses which have something in common with you even if you have completely different agendas. This is done so that loyal customers can be shared across businesses without any competition to provide better services. This collaboration could also be with prominent figures in the media whose vision aligns with yours.”
Through strategic partnerships, you can limit your risk potential by using customers or resources of another business instead of spending time, money, and effort on obtaining them yourself. This can help you test certain segments and market potential before scaling up resources to go full-force into a specific experiment or idea.
The most difficult part of building strategic partnerships is coming to an agreement with the other business. Obviously, both parties have things that they want and different objectives to complete. The key to successful partnerships is to find mutually beneficial ways of collaborating and utilizing resources so that both parties are happy with the outcome. This type of negotiation can take time but it also can be worth its weight in gold when it comes to fruition.
New Market Entry
Another common strategy for a BD team to take on is to penetrate a new market. A new market can mean a few different things from a new geographical location to a new customer segment or launching a new product. A new market entry is one of the fastest ways to obtain new customers quickly because you’re being introduced for the first time to a group of potential customers.
New market entry can be risky if you haven’t done enough research and experimenting to know that the time and resources being spent to expand are worth it. The BD team puts together specific partnerships and strategies to ensure success of these new market entries before they launch so that the team can limit this risk.
Many businesses’ first foray into business development activities is to deploy resources into sales development with the goal of acquiring new customers. Sales development is the work that focuses on building out the earlier stages of the sales cycle with qualified customers so that the sales team can focus on closing. This strategy focuses on immediate or near-term revenue generation so that’s why it is so widely adopted as a main activity.
There are two different generic methods for going about sales development, which are:
Inbound: This is the method of either finding strategic ways to help the Marketing team come up with more top of funnel leads or to nourish those leads, passing on the most relevant ones to your closers or Sales team.
Outbound: This is a more proactive approach where you’re actively reaching out to businesses or potential customers to get them into the sales funnel, at any level. This work is often done through events or strategic partnerships that allow you to communicate with potential customers and get them committed to being an active lead.
BD is quickly becoming more about relationships and partnerships and less about managing the various stages of the sales cycle. However, many BD professionals still manage SDR teams and help develop multiple stages of the sales cycle before a potential customer gets to the closing stage.
Be Creative & Keep Moving Forward
There are countless strategies that could be implemented throughout business development activity and it’s going to really depend on your industry and what the needs of your potential customers are. The key is to be creative and always trying to progress towards the future.
Damian Enderle, Business Development Manager at Adult Diapers 365, says “One of the most popular business development strategies is constant innovation. In my company, we are always told by top management to come up with new ideas, regarding branding and customer base, so as to attract more people to our product and keep the existing ones satisfied and interested! Therefore, businesses, whether they are small, big, young, or old, must constantly innovate and avoid falling into the trap of complacency.”
Most Common Business Development Jobs/Roles
Business development continues to become more important to the success of any growing business. Having a seat at the executive table is becoming more of “the norm” instead of being an anomaly. So while we’ll cover the most common job roles in BD inside this section, we will also take a look at some of the most up-and-coming executive roles.
Additionally, we’ll do a quick walkthrough of what some of the most common career paths might look like for a BD professional as you grow into your career.
Business Development Representative (BDR) or BD Specialist
This is the first stop for someone with little to no experience in business development. However, it is very common for individuals with a business or sales background to jump straight to a Business Development Manager role. A BDR is tasked with qualifying leads throughout the sales pipeline to make sure that the closers only get the best leads. A BDR also puts in a lot of research into customers and markets for the rest of the BD team. Another name for a BDR is a Business Development Specialist.
Business Development Manager
One of the first roles many individuals get within Business Development is to become a BD Manager. A BD Manager is often the only business development team member in small companies and is tasked with building out partnerships or an entire business development strategy. What a Business Development Manager does is going to vary quite dramatically from business to business but some of the functions that you may have include:
- Manage other individual contributors on the BD team
- Own the BD strategy
- Be in charge of building and negotiating high-profile partnerships
- Identify new business opportunities
- Identify new market opportunities
- Generate leads
- Develop leads and opportunities
- Nurture existing relationships
- Be the face of partnerships to external facing organizations
Business Development Director
A BD Director is often the face and leader of an organization’s business development function. They set the strategy and direction for the team and manage any other people managers within the BD department at larger businesses or all individual contributors for smaller teams. A BD Director can oversee Sales or Marketing teams for some businesses. Their main responsibility is to identify and nurture new business opportunities and get much of the work done through the team that they manage.
Chief Partnerships Officer
A Chief Partnerships Officer is a fairly new but pivotal role that manages all partnerships and new business opportunities at the business while reporting directly to the CEO. In addition to leading BD, these roles typically lead all client relationships, client services, strategic initiatives, and many special projects. Their focus is new business growth and maintaining profitable relationships with outside organizations.
Chief Revenue Officer
An executive-level position that many BD professionals grow into is that of a Chief Revenue Officer. Reporting directly to the CEO, a CRO is responsible for all revenue streams at the business. This means that someone in this position could find themselves managing the BD team as well as sales or marketing teams, or all of the above. They are tasked with aligning all revenue-generating activities and departments while building out strategic partnerships that will sustain the business well into the future.
Career Paths For BD Professionals
As you can tell just from listing out the most common BD roles, there are plenty of career path options once you’ve received plenty of business development experience. The plethora of diversified skills needed to succeed in business development creates a lot of different options to choose from as you navigate through your career. Below are just some of the most popular career path departments that you may have the skills to move towards.
Business Development Working With Other Functional Teams
One of the most intriguing things about a career in BD to many people is the amount of other functional teams that you get to work and interact with. In order to be successful in business development, it’s important that you’re up to speed and in alignment with everyone from Product to Sales. Below we outline some of the basic ways that you’ll work with different functional teams throughout your BizDev career.
Business Development & Product
The Product team sets the strategy and implementation of the product for the business. Business Development works with Product to identify opportunities for collaboration with other businesses as well as to set expectations for feature implementations that some relationships might be dependent on.
BD & Sales
The connection between BD and Sales is pretty obvious, as both touch something in the sales cycle. The business development team typically nurtures leads and even brings them into the sales funnel initially before they hand them over to the Sales to to close and officially onboard them into being a customer. These teams typically work very closely to make sure that communications and expectations are aligned.
BizDev & Marketing
The relationship between Business Development and Marketing is similar to its relationship with Sales. Marketing owns the top of the funnel and much of the external-facing communications for the business. Alignment is important to make sure that the customer experience is fluid and connects throughout the sales pipeline.
A disjointed approach where Marketing and BD are approaching customers differently could create confusion and lower potential conversion when candidates are passed over to Sales, if they don’t leave the pipeline altogether beforehand.
Business Development & Operations (Including the CEO)
It’s important that any business development team is aligned with the Operations team because they are reliant on Operations to accomplish a lot of tasks that are put in partnership agreements. Additionally, Operations typically takes over the management of customers post-closing so they need to be aware of how customers are being brought into the pipeline, being sold, and what is being communicated to them throughout all of these processes.
The CEO is often very engaged with what the BD team is doing because most CEO’s are often thinking about new business opportunities. The CEO sets the strategic direction for the entire business so being in alignment with what opportunities to pursue is vitally important to partnership success for the long-haul.
Business Development Frequently Asked Questions (FAQs)
Below we’ve compiled answers to the most popular and frequently asked questions related to business development.
What is the role of business development?
The role of business development is to identify new business opportunities that lead to the long-term creation of value or revenue. These opportunities can include partnerships, products, services, new market penetration, or following key trends. It’s important for any BD team to stay on top of what the business needs are going to be for the next 6-12 months and then deliver value based on those predictions.
What are business development skills?
Business development skills are the myriad of things needed to be successful in a BD career. These skills will vary based on what is needed to grow your specific business, but can include things like research, critical thinking, creative problem solving, negotiation, and relationship building.
What is another name for business development?
Business development is sometimes referred to BizDev, BD, sales, business planning, or business growth. Most people use Business Development because it’s a catch-all for these other terms that actually mean something slightly different or is the official name for the often used abbreviations. The importance of BD is not in its name but in the value that is created.
Eden Chang, Co-Founder at PeopleFinderFree, says “The true value of business development essentially boils down to its ability to help a business build important relationships, improve its overall image, effectively expand and increase its product offerings, open up expansion into new markets, and ultimately boost business revenue and lower costs. However, it’s also important to remember that the goal of business development is not just to increase an organization’s bottom line, but to make intelligent business decisions that inevitably create better value for organizations and customers.”
What is in a business development plan?
A business development plan explains the goals and OKRs for company growth and outlines the path to achieve each one. The plan will contain specific metrics that the plan will be judged on as well as the resources needed to accomplish the strategy. A business development plan should be a fluid document that continues to evolve over time.
Business development is a great career path that continues to develop and evolve over time. It’s one of the best ways to help a business grow and improve the overall partnerships and long-term revenue opportunities. If you’re interested in learning more about specific strategies and tactics that are best practices or commonly used throughout the industry then you should check out more of our articles and videos around related topics.
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