Why Business Development is Essential to Your Business
Most business owners, MDs and CEOs want to grow their company and become bigger and more successful. Some are happy to stay at their current size but they still need to bring in new business to replace the projects that end or clients who leave.
As a rule, no business should have a client or customer providing more than their 20% of their revenue. It is dangerous to have one client or customer providing much more than 20% of your revenue. You can lose them, often through no fault of your own, and then your business is in real trouble.
Many businesses think because they have had a customer or client for several years that they will always have them. The reality is you can lose them in several ways:
• They go out of business- many previously successful companies have collapsed due to COVID, Brexit related issues and/or the massively rising costs of energy, raw materials etc.
• They are taken over by a company that already has all the suppliers they need in place • The MD or your main contact leaves and their replacement want to bring in their own preferred supplier
• There is a cost cutting drive and they move to a cheaper supplier whose price you cannot match.
Ultimately, it is important whether you want to grow or stay the same size that you keep on generating new business whether this is from new clients, new markets, upselling to existing clients, developing new partnerships or creating new revenue streams.
Whichever route you choose, Business Development is vital to every organisation and you must consider it a priority even if you are not looking for growth. Business Development is the activity of pursuing strategic opportunities for your business through new markets, new clients and/ or new partnerships for your product or service.
Let’s look at how you can do it effectively.
MAKE TIME FOR YOUR BUSINESS DEVELOPMENT
In order to come up with new partnerships or ideas to reach more clients, target new markets or create revenue streams, you need to work at it. Unfortunately, ideas and opportunities rarely appear out of the blue.
By devoting time to business development and stepping away from your usual day-to-day activities, you’ll be able to get into your creative and objective mindset. When this happens, you will be able to identify and assess opportunities, think of ways to reach new clients and markets and be able to identify what you want to achieve over the next quarter, the next year and the next five years.
Here are some helpful questions you can ask to create a route that you can follow for your business development:
- Where do I see my business 6 months, a year and 3 years’ time? You should focus on three key figures here, your turnover, your profit and your number of clients or customers.
- What do I need to do to achieve these targets? This always involves new marketing campaigns and increased sales whether to new or existing clients. It can also include putting new systems and processes in place and recruiting more employees.
- Do I need to build relationships so this plan could work? It is often easier to build strategic relationships with companies than do everything yourself from scratch.
START WORKING ON YOUR PLAN AND STRATEGISE
It is vital that you develop a strategy. In business, a strategy is a clear set of plans, actions and goals that outlines how you will compete in a particular market, or markets, with one or more products and/ or services.
The key word often overlooked is compete. Many businesses think it is enough to tell potential customers and clients about their offering and they will buy. This rarely happens. Your potential customers and clients have other demands on their income and on their time. You must beat your competitors by showing how your product or service is more suited to your target market than theirs.
You can distinguish your offering in one of the below ten ways:
- Quality/ Results
- Price
- Service
- Delivery
- Speed
- Convenience
- Buying experience
- Client experience
- Fit for your target market
- Brand
Even if your product or service is generic, you can still distinguish yourself on client experience, fit for your target market or brand.
Once you have an idea of how to compete, you then need a plan to achieve it. This includes creating a timeline and assigning tasks and roles to specific team members. It is also important to cost the various projects involved and assign a budget.
After this, it is vital to track your progress. Specify targets, set dates, and measure progress and performance making sure it is aligned with your timeline.
CONNECT WITH POTENTIAL PARTNERS AND CUSTOMERS AND BUILD RELATIONSHIPS
Your business development can get a major boost through your relationships. This could be using existing relationships or developing new ones through networking to help you find new customers or clients, new suppliers and new strategic partners.
Building relationships and creating rapport with potential partners and customers is very important. This is because people do business with people they know, like and trust. This does not happen overnight. It takes time for people to get to know you and your business. The biggest barrier is building trust. People can know and like a person and their company but not necessarily trust them with their business. You can probably think of some companies and individuals you know and like through networking but who you do not yet trust enough to give your business. This is quite usual.
In another article, we will look at various ways to help you build trust with new prospects. One of the quickest is the transferal of trust. This is when someone they already know, like and trust recommends you which is part of the reason why finding strategic partners is so key.
Note: Strategic partners should be about the same size as your business. It does not work if one partner is much larger than the other.
Spend time cultivating relationships and connecting with other businesspeople. Time spent with them is valuable to your business development.
RECORD, FOLLOW AND EVALUATE YOUR BUSINESS DEVELOPMENT PERFORMANCE
When goals have put in place along with scheduled targets and timelines and the appropriate people assigned, then it is time to put your Business Development Plan into action. Once started, you must track and follow your progress. Your project management software, CRM or other applications you are utilising can be used where you can add notes and record your progress. It should be easy to tick off completed actions so you can monitor your progress.
BE BOLD WITH YOUR BUSINESS DEVELOPMENT IDEAS
All businesses are supposed to change and improve over time. It is the same with your goals and plans. Your target market will change and competitors will keep on coming. Even the economic conditions and business opportunities will change over time.
In order to keep your business on an even keel or growing, it is important that you focus on business development.
Here are some key points:
- Clearly define your goals and what you want your business to accomplish
- Your Business Development plan and activity must be in line with your company’s goals
- When potential opportunities come your way, add them to your Business Development plan so they are not missed
- Be sure to invest some time in developing relationships with prospects and partners
- Monitor and review your progress regularly
If you want to evaluate your Business Development Plan, then talk to us. You can reach us at +44(0)1892 807 001 or email us at accounts@nayloraccountancy.com
