In the modern business world, it is important for companies to promote growth with targeted measures. Making it possible to win new customers, open new markets and ultimately increase turnover. Increasing globalisation has further intensified the competitive situation and put many companies under pressure. This is exactly where business development comes in to help you grow further organically.
In this article we will explain what business development is and why it can be so important. It can help your company to become even more competitive in the international arena.
Table of contents
- 1 What does business development mean?
- 2 Which competences are relevant for business development?
- 3 Business development vs. sales: What are the differences?
- 4 Conclusion
- 5 Author and 3i contact
What does business development mean?
The meaning or definition of business development encompasses several strategic and operational activities to open new markets. These can be new geographical markets, new product categories or new target groups. The initial focus is on entering these new areas, which should later drive the business. This is why one often hears the more precise term business field development in this context.
As a rule, the process begins with a thorough assessment of the untapped markets beforehand. Here, the company incorporates all relevant information from the various departments to be able to make an informed decision. Finally, it creates a mix of measures – for example in customer management, marketing, and sales – to venture a market entry with new products or into new markets.
What does business development involve?
To define what business development is, one has to take a closer look at the different areas of responsibility. In concrete terms, a manager deals with evaluating, planning, and implementing the market entry into a new region or into a new product category.
These can be, among others, the following business development services:
- Evaluation and analysis of new markets, product categories and target groups that the company would like to develop additionally.
- Building strategic partnerships, customer relationships and leads in new markets to develop them even faster.
- Collaboration with various departments in the company (sales, marketing, product management, controlling, etc.) to plan market entry.
- Permanent development of new business designs in order to continuously advance the company’s development.
SMEs can often easily underestimate the effort that professional business development requires. After all, opening new markets is usually a full-time job that cannot be done on the side. In such cases, it makes sense to rely on the services of an experienced interim manager who can quickly increase the company’s capacities for targeted expansion.
Why is business development so important?
The increasing globalisation of the business world now poses enormous challenges for many companies. Nowadays, those who rest on their laurels and don’t continue to develop can often end up in financially challenging situations. That is why it is particularly important to permanently develop new business fields to ensure organic growth of the company.
In recent decades, international expansion has become increasingly important. After all, a successful product can be established quickly and easily in a new market with the right preparation. This makes it possible to establish new footholds, which further reduce dependency and diversify sources of revenue. They also reduce risk should problems arise in the home market.
New product categories and international markets also entice with attractive growth rates that may no longer exist in the same form your own country. The gross domestic product of many countries in Asia, for example, achieves an annual growth rate of almost 10 %. This creates opportunities for SMEs from the DACH region, provided they take the step and enter at an early stage. Professional interim management with many years of experience in Asia helps you to master all the challenges of expansion.
Which competences are relevant for business development?
Business development is a challenging area that requires high competencies. A good business development manager must therefore have many skills to successfully open new markets for the company.
Strategic and analytical thinking
A manager must be able to think analytically to identify trends and potential. The subsequent evaluation of opportunities is equally important, however. This should be considered realistically and rationally at all times in order to minimise the risk of expensive and harmful decisions.
However, opening up new markets also requires a long-term commitment on the part of the company. Therefore, the development of a long-term strategy is essential to clearly define goals in advance and to be able to transparently measure their achievement.
Communicative and collaborative work
The business manager is dependent on cooperation with numerous other departments. In day-to-day business, he or she must often coordinate with marketing, sales, product management and controlling to include important information for expansion.
When it comes to implementation, it is then a matter coming to a joint agreement on the appropriate steps to ensure a successful market entry. Communication and collaboration are therefore important qualities that play a significant role in business development.
Driving negotiations and decisions forward
Entering new markets often means negotiating with potential partners and customers. Those who can reach agreements and understandings at an early stage can simplify market entry considerably and reduce risks.
Likewise, decisions have to be driven forward, whether within the own company or with external partners. Again, communication skills, but also goal-oriented and resilient action are vital to success.
Taking over the Project lead?
Although business development is a continuous process in day-to-day operations, it is not uncommon to set up an internal project for the concrete implementation. This makes it possible to check and control all factors such as time, scope, and budget.
Expansion abroad, for example, can be very costly. In such cases, it makes a lot of sense to rely on a manager with project experience. This manager can then ensure that the timeline and budget remain within the agreed values.
Business development vs. sales: What are the differences?
Both areas thrive on talking to customers and partners. Business development differs to sales as it, among other things, deals with the opening of new markets on a strategic level. Sales management, on the other hand, focuses on actual sales activities. So, it lines up behind business development and takes care of sales after a market entry has been made.
What should a good business development process look like?
Essentially, a good business development process can be broken down into three steps, which can be further elaborated in any complexity.
- Evaluation: The company evaluates which untapped markets exist and whether entry is worthwhile. This is where the initial decision is made.
- Planning: Setting up all the framework conditions for market entry, including consultation and planning with all internal departments and forging external partnerships.
- Implementation: This is the entry into the new market or category. This also involves a handover to marketing and sales, who then drive all further sales activities on a day-to-day basis.
Targeted business development can help your company open new markets and increase sales. In this way, you ensure organic growth and sustainable competitiveness in the future. But the tasks and competencies for professional business development are vast and varied and require many years of experience, especially when it comes to the increasingly important expansion abroad.
As an experienced partner at your side, we help you identify and tap into new markets. We advise SMEs from the DACH region on all important aspects of topics such as business development, outsourcing and turnaround management.
Contact us now and let us advise you.