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Marketing 101: So What is Business Development Anyway?
"Business Development" is one of those terms that sounds good. I mean it really does sound good. Think about it – who doesn't want to develop business? But what does it really mean? And how do you do it?
If you define business as the process of party A selling a product or service to party B then is sales business development? After all isn't sales "developing" business. No, not really. Actually not at all. Sales is sales. Business development is the process (and it is a process) of developing what might be called "strategic business relationships". Most sales aren't actually strategic – they are financial. I'd define strategic business as "a business relationship that has the potential to dramatically increase your overall success". There are two key things here:
- Potential – Most business development work doesn't actually lead to a damn thing. Think of business development work as akin to dating. Just as in dating you have to kiss a lot of frogs before that handsome prince / princess appears, so it is with business development.
- Dramatically – Biz Dev (as I'll often refer to it from now on) can lead to companies reselling your product, bundling your product or even acquiring you. Any biz dev relationship should be evaluated by it's potential – before it starts.
So How do You Do Business Development?
Well we now have a definition of business development as this:
Business Development is the process of creating strategic business relationships between two or more companies with the ultimate goal of dramatically affecting the success of both parties.
That's well and good. But how do you do it? What do you do? And, most importantly, how do you start? Let's illustrate this with an example of a small software company called IB. IB produces a product for improving email and eliminating spam. How should this company approach business development? Here are X steps to get started:
- Designate someone in charge of business development. This should ideally NOT be someone with other operating responsibilities. If they have responsibilities beyond biz dev then something will suffer and that is usually biz dev. The key to biz dev is that it's a process not a one shot thing. Biz dev is all about networking and relationship building. That takes hard work, social skills and attention to detail. This means that you want someone detail oriented who can make a list of the goals and contacts and be neat, organized and follow through.
- Map the playing field and answer the question "Who Benefits"? The "playing field" is the potential universe of companies that are of interest to you. Generally this breaks down into both companies and categories of companies. For example McAfee and Norton are both potential IB partners and fall into the category of "Utility Software" companies that benefit by bundling our technology / reselling our product / acquiring our product. Another category is "Device Manufacturers" like Palm, RIM, Danger how benefit by using our software to drive usage (and air time minutes) of their products. For any company you want to approach you need to know how they benefit from the relationship and be able to spell it out to them. What's oh so apparent to you might not be apparent to them at all. One approach is to draft a white paper or FAQ about how the relationship benefits them.
- Find the contacts you need. Remember that biz dev is all about relationships and to make a relationship you need to know who to contact. Let's say that you want to build There
- There are two types of people to contact from any company where you want to establish a relationship – Product Managers and Vice Presidents of Business Development.
It's a Process
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