Business Development: Step-by-Step (2024)

Introduction

There is a famous popular expression in the business world: “Sell the Sizzle, Not the Steak”. This is very much applicable to Business Development which is primarily about selling the sizzle to attract new customers and gain new partners. This process is commonly known as "Pre-Sales" which involves preparing the ground for the Sales team to sell the final product.

It goes without saying that Business Development is a highly rewarding career choice with great potential for success depending on the person’s drive, ambition, motivation, and passion. It is a pivotal role in a company that can enhance shareholder value and ROI and is instrumental in ensuring the long-term success of the business including its continued revenue growth and market traction.

This step-by-step guide tries to demystify the art of business development through a scientific approach by outlining a process for it in a methodical manner. Although it is created from the perspective of new products and services in the Technology sector in the industry, it is applicable to other sectors as well.

What is Business Development?

First and foremost, Business Development is about developing new revenue opportunities through new partnerships. It is about facilitating business growth and scale by focusing on the process of

• exploring new growth drivers for the products and the overall business, and
• creating long-lasting alliances with partners through strategic execution.

It also involves expanding the client base by understanding the market dynamics.

Its ultimate objective is to grow the business, create new markets, form strategic partnerships, and increase profitability. This makes Business Development a highly strategic role due to its primary focus on the long-term goals of the business.

In summary, business development entails a conglomeration of strategies, initiatives,and activities to make a business more successful.

A Step-by-Step Guide

To be effective as a Business Development professional, one needs to follow a disciplined and methodical approach. At a very high level, the business development process includes five phases:

·Phase 1: Searching for a Potential Lead (Prospecting)

·Phase 2: Qualfying the Lead

·Phase 3: Meeting with the Lead

·Phase 4: Creating an Offer

·Phase 5: Closing the Deal

At a more granular level, the overall process for doing business development is much more elaborate and complex. It involves lot of upfront research, careful planning, and systematic step-by-step execution and follow-up as outlined below:

1. Conduct Upfront Due Diligence (Research)

• Know your product well and your company’s longer-term goals and mission.
• Do your research - Know the market trends, technology trends, industry outlook, local and regional business regulations, and buying and selling processes. If necessary, hire an external research company to do a market survey, or conduct a focus group to help you with your research.
• Know the size of the target market including the Total Addressable Market (TAM), Serviceable Addressable Market (SAM), and Serviceable-Obtainable Market (SOM), in addition to the growth rate, market drivers, barriers to entry, current stage in the product life-cycle, competition and profit potential.
• Know your differentiators and competitive advantage. Know how to stand out from the crowd by performing an in-depth analysis of your competition, and a competitive benchmark against other vendors.
• Do a cost/benefit analysis from a customer’s point of view.
• Build or buy a system for CRM (Customer Relationship Management).
• Identify specific opportunities that fit your target market(s)
• Perform customer segmentation to decide which specific segment(s) to target.

2. Create a Plan and Visibility by Contributing Valuable Insights (Value-Add)

• Create an effective Business Development Plan.
• Network, Network, Network: Develop and cultivate your network.
• Invest in databases with “hot leads” for effective lead generation.
• Touch base with personal and professional contacts, alumni groups, social groups, former colleagues and clients, family members, and friends for leads.
• Attend trade shows, conferences, and seminars.
• Get memberships in professional societies and get listed in professional directories.
• Present talks, webinars, podcasts.
• Create newsletters / Publish blogs and vlogs.
• Create a website or landing page for marketing.
• Create promotional materials, brochures, spec sheets, and whitepapers.
• Ask your contacts for referrals and introductions.
• Build a pipeline of companies to contact for prospecting.
• Choose your Business Development Strategy – Inbound vs. Outbound. Develop a plan of attack!
• Get media coverage.
• Arrange a contest and give out a prize such as, one year of free service to the winner.
• Create compelling demos.
• Join various Social Media Groups.
• Participate in various Corporate Alliance programs, local workshops and meetups
• Obtain testimonials from past clients.
• Assess opportunities to invest time on prospects with strong financials.
• Follow the 80-20 rule – 80% of business generally comes from 20% of the leads. Focus on that 20%.
• Reach C-Suite executives through a consistent, focused, and credible content marketing strategy (via multiple touchpoints including mobile devices).

3. Carry Out the Plan (Execute)

• Follow up with past leads, keeping in mind the long, uncertain, and unpredictable cycle of the B2B business which often takes more than a year of interactions, communications, and associations to converge to a successful closing.

1. Pursue prospects that have not been approached yet or those that asked for a call-back later.
2. Ignore companies that said: “do not call.”
3. Ask present customers for a referral.

• Do your homework on the prospect before engaging in discussions.
• Perform SWOT and Gap Analyses of your prospect.
• Educate yourself on the clients’ business. Look up various information on their website.
• Understand the client’s pain points by asking in-depth questions.
• Host and/or sponsor client events.
• Arrange Crowdfunding for the Client, if needed.
• Put the client in touch with Technology Accelerators or Incubators on as needed basis.

4. Build Relationships (Partner)

• Establish genuine rapport and bond with the client.
• Build trust by sharing pertinent, relevant, and timely information.
• Develop and commit to a plan to stay in touch (through timely follow-ups).
• Resist hard selling; offer free solutions instead.
• Focus on positioning yourself as a trusted advisor.
• Collaborate with the client through joint research or joint articles, blogs and papers.
• Know the secrets of winning work from clients by doing small favors. Provide advice,assessments, and consultations at no charge.
• Refine your initial proposals to make them more strategic for the client.

5. Convert Prospects into Clients (Make a Deal)

• Qualify new leads.
• Create a short-term tactical plan specific to each client.
• Schedule a meeting with the Client.

1. Attend in-person meetings over breakfast, coffee, lunch, or dinner outside their offices or homes, if possible, so they are relaxed and not easily distracted by other official or family matters.
2. Offer to sign an NDA, if needed, before meeting with the client.

• Understand Client’s Requirements vs. Wish-Lists.
• Spend more time on face-to-face interactions, instead of emails.
• Ask for names, contact information, and introductions to their suppliers and partners (who might be helpful for you to gain a better understanding of the client’s business and supply chain), provided it is not confidential.
• Attend conferences, workshops, and major industry trade-shows. Set up booths for marketing and promotions including live demos to dazzle the visitors to your booths.
• Travel to client-sites to get to know their team members and socialize with them.
• Spend less time on cold calls and cold emails.
• Explore current business issues or any recurring problems of the client.
• Offer to do problem-solving by bringing in your experts to help them.
• Structure the deal by developing a suitable offering for an MVP (Minimum Viable Product) or a suitable solution based on the client’s needs.
• Prepare a Term-Sheet for initial discussions.
• Create a Contractual Proposal and negotiate it with the Customer.
• Close the Deal.

Conclusion

Business development is a rigorous process and it involves a lot of discipline and hard work. But it is incredibly fulfilling when you are able to get a prospect to sign on the dotted line by committing to your services or products.It is also extremely exciting to do problem-solving based on your knowledge and experience to help a customer resolve his/her pain points. Also, by structuring a deal to accomplish these goals, it can give you a sense of satisfaction to know that you were able to win someone’s trust and make a difference in their business.

Another exciting aspect of business development is that it helps you to meet, socialize and brainstorm with a lot of interesting people from different companies, socio-economic demographics in different parts of the world - if you are willing to travel (which is often a pre-requisite for this job). It also teaches you how business is done in different markets and different cultures.

Finally, it should be emphasized that Business Development is not Sales and not Marketing. Its primary focus is on the long-term growth and market traction of the business and its partner ecosystem.

The step-by-step process outlined in this article is a proven approach that has resulted in hundreds of millions of dollars of new business contracts. Some of the steps can be performed in parallel or in a different sequence or skipped or repeated based on the needs of the business or its specific vertical. In the end, your diligent pursuit of these steps will be a determining factor for your ultimate success in this challenging but exciting profession.