8 Quick Tips About Business Development

  1. Hire the Right Person at the Right Time

A person with deep industry knowledge and a strong network ready to “do deals” can turn into a disaster if it’s too early in a company’s product lifecycle. There are three stages in the commercialization process—scouting, testing and scaling—and not everyone is suited for every stage.

  • Scouting: The earliest stage of a company. At this point, business development is about identifying various routes to market, points of leverage and providing the internal team with early market feedback. The ability to work with product and engineering teams is a key skill.
  • Testing: At this stage, business development will close a few deals to test assumptions and provide measurable input before you scale the business. Analytical skills to set up a framework for what to measure, and examining the data, will determine if and where to scale based on the company’s strengths and vision.
  • Scaling: After gathering data from early deals and validating a path to achieve your goals, business development is ready to start replicating deals and putting a support structure in place.
  1. Business Development Is Not Sales

In general, business development will identify and create partnerships that enable leverage for driving revenue, distribution or that enhance the product. Sales are focused almost exclusively on driving revenue. Similar distinctions will apply when hiring a sales leader for an early stage company versus a more mature organization.

The person (or team) in charge of business development will identify and create partnerships that enable leverage for driving revenue, distribution or that enhance the product. This is different from sales, which focuses almost exclusively on driving revenue.

  1. Consider Post-Deal Management

All successful deals are a result of accountability and proactive management—by both business development and account management. In most cases, an account manager is a different person than the business development person who did the deal. Ideally, the account manager has variable compensation or incentives tied to meeting the goals established by both parties. If you are not ready to allocate the resources to support a deal, think twice before signing it.

  1. Pay Attention to Your Website

Have you let your website slip? Does it look like it was designed a decade ago? In this visual world, design matters. It’s fair to say that most of your customers may start with your website. Recent research shows 84 percent of business customers check business websites. A tired looking website will most certainly result in missed opportunities. At a minimum, you can add a video to showcase what you do.

As for your content, your website may not thrive if it just provides information about who you are and lists your products and services. Consider rewarding visitors who land on your site with ample free resources, information, knowledge, and tools to help them succeed. Make it easy for them to share the resources with others without having to fill out forms, deal with constant pop-up windows and other annoying interruptions. This is a passive business development that will possibly pay dividends and doesn’t cost you anything.

  1. Don’t Let Relationships Go Cold

A study by Manta and BIA/Kelsey reveals that a repeat customer spends 67 percent more than a new customer. More than 60 percent of small-business owners generate the majority (51 percent-plus) of their annual revenue from repeat customers rather than new customers. It may pay to focus the bulk of your business development efforts on strengthening relationships with existing customers. Value the relationships and keep your loyal customers engaged.

There are many ways to engage with customers periodically. Set up a Google Alert for your clients so you can know what’s happening in their world and react as you see fit. Share useful content on a regular basis. Send a note on special occasions such as birthdays or anniversaries. Connect with your clients on LinkedIn and keep in touch with them through the LinkedIn feature that allows you to “comment” or click “like” when they have a work anniversary or other change to their profile. There’s no exact science on how often you should connect with a client, but one rule of thumb for maintaining top of mind awareness with your clients is to show up on their radar once a quarter. You can also engage with clients peripherally by establishing an engaging social media presence.

  1. Support for Business Development Is Essential

A good business developer will engage internal resources along the way to ensure the company can meet the goals and expectations of a partnership. A lack of support will almost certainly lead to finger pointing and blame when things go south. Everyone should own part of the success or failure from the start.

  1. Make Deals Carefully

There’s a big difference between doing deals and doing the right deals. A good dealmaker can help identify a false signal–-when there is just enough market momentum and revenue to mask the greater opportunity. Conversely, a less-experienced dealmaker, or one with the wrong incentives, can generate just enough momentum to distract the company from the bigger opportunity. Many companies have been weighed down by a bad deal they later regretted-–this is where you want to develop a level of understanding and trust with your business development person.

  1. There Are No Legal Issues

A legal agreement codifies a business arrangement and includes commercial terms as well as what happens if things do not work out. This requires business development and legal counsel to assess the business opportunity versus the business risk and explain the trade-offs to management.

Building a company is hard and requires a lot of things to go well including having a great product and team. Watching an idea become a product and a product generates revenue that becomes a successful company makes it all worthwhile. Bringing in the right business development person at the right stage, and following these other guidelines, will keep your company on the right track.

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