What Is Business Development? Definition and Skills
Updated 22 August 2023
Business development is an important aspect of any business venture. Business development executives work by evaluating the performance of a company and identifying areas for improvement. They require a specific set of skills to be successful in their ventures. In this article, we will look at what is business development, what role it plays in a company's growth and what skills you need to work as a business development executive.
What is business development?
Business development is the identification of long-term methods to increase value through the development of relationships, markets and customers. A business development executive or a business developer is a professional who assists companies in expanding their business operations and value. They may work as part of the company as a regular, salaried employee or as an independent consultant on a contract basis. Depending on the industry, the day-to-day tasks of business developers and the strategies they employ may vary, but the overall mission remains the same.
The role of business development
Very few companies expand and grow organically. Unless their growth is systematically planned and strategised, companies run a huge risk of exhausting resources and overshooting budgets. Therefore, if a company is seeking to expand and grow, business development opportunities may be the best solution. A skilled business developer can form and nurture long-term partnerships with other professionals and companies, leading to additional leads and closed deals. As a result, the business may be able to grow without the need for a massive increase in capital, resources and staff.
For some companies, business development is the means to sustained improvement. Improvement may come in the form of building and maintaining relationships with allies and partners, or it may involve identifying opportunities for growth in other channels. Business development focuses on the long-term success of a business and finding the best ways to achieve that success. By identifying and creating business development opportunities, companies can form relationships with partners that will help them through referrals for a longer period of time.
Facets of business development
Business development has multiple facets. Business development executives work with various professionals, including sales staff, marketing executives, managers and vendors. In addition to the different departments that business developers work with, they are also expected to manage aspects of a business like partnerships and alliances, cost-reduction mechanisms, negotiations and networking. The following departments and aspects are brought together by business developers, using unified development goals:
Business development executives provide sales staff with realistic sales targets and guidelines on how to achieve them. They may also review the sales performance of a company in different markets or across different quarters to identify areas for improvement.
The marketing department works to improve sales performance through promotions, advertisements and campaigns for the company's products/services. Business development executives may perform market research to tailor marketing campaigns to a specific geography, demography or user group. They may also provide guidance to managerial staff for allocating marketing budgets appropriately.
Companies often rely on partnerships to expand the scale of their operations and establish their presence in a new market. Business developers take the assistance of finance and legal teams to understand market dynamics better, in order to make decisions regarding partnerships and other strategic alliances.
Business development executives are responsible for assessing timelines, logistics, schedules, cost and other estimations associated with a project. They may work with senior managers to provide an initial direction and briefing to project managers, who then take over and supervise the progress of the endeavour.
Vendors are partners or staff of a company that handle the retail experience associated with their products or services. Business development executives help the company identify vendors and estimate the cost and legal implications of vending operations.
Negotiations, networking and lobbying
Business development executives have to actively negotiate and network on behalf of the companies they represent. Although lobbying is a legal grey area in many parts of the world, it is essential to business development in most circumstances, especially when companies try to enter new markets. Business developers may initiate these interactions with government authorities, agencies, regulators and vendors.
Company profits can be improved not only by expanding sales and scale of operations but also through carefully executed cost reduction mechanisms. Business developers are experts in this domain and enable company stakeholders to make crucial decisions to cut costs and in turn improve profits.
Skills required for business development
If you are looking to pursue a role in business development, there are several common skills you may find in job descriptions. Setting personal goals to improve these skills can help you be a more competitive candidate. Here are a few of the skills you should emphasise on your resume and during business development interviews:
While business development and sales roles serve different purposes, they share a few similar tasks and responsibilities. For this reason, basic sales skills can help you be successful in this role. To facilitate growth, business development executives should be able to accurately identify target audiences and understand their market well. They will also require skills to collaborate with prospective partners and form potential alliances with other professionals and companies.
As a business developer, you need to constantly interact with a variety of professionals. To be successful in this job role, you should develop good written and verbal communication skills. Your communication should have clarity and should be professional at all times. It is also important to identify what method of communication is best suited for a specific purpose.
The professional relationships that are built as a part of business development require consistent nurturing and hence, effective communicators can succeed in this domain. Additionally, you should also be comfortable with negotiations and be able to assert your opinions and viewpoints, while making the other party feel heard.
In many companies, the business development department often aligns more closely with the marketing department than the sales department. Although business developers must have some sales skills, they must also understand the basic principles of marketing and apply them in their roles. Ultimately, the goal of both marketing and business development professionals is to grow the business, although the methods for doing so may differ.
Business developers perform several tasks that come under the domain of marketing. This includes scouting for partners, planning campaigns, assisting with branding efforts, developing new user bases and effectively generating brand awareness and loyalty among new users.
Business intelligence is crucial for gaining insights and developing a deep understanding of any market. Business intelligence can be cultivated through thorough research and analysis of the brand, its products/services, its competitors and the market dynamics associated with the company's operations.
Collecting and analysing data also falls under business intelligence. Some of the most common types of data that benefit a business developer include the size of the potential market, any changes impacting it and the types of campaigns that generate positive responses from certain market segments. To build this skill, an individual can start by performing research, collecting data and learning more about target markets.
Business development executives analyse large volumes of data to gain useful insights, based on which actions can be taken and strategies can be developed. They must also have good attention to detail so that they can isolate key indicators and vital pieces of information from large volumes of unorganised data.
In addition, they must also be able to collate and organise these takeaways so that they can be presented in a manner that is easy for others to understand. Having the skills to clearly present company progress, as well as the organisational skills to track what you are doing to boost the growth of the company, can greatly benefit your ability to succeed in this career path.
Project management skills
Business development is a complex project with several steps and multiple workflows that run parallel to one another. Some of the skills needed to be a great project manager carry over to the business development industry. These skills include leadership, team management, the ability to monitor and manage risk and personal organisation.
The ability to lead a team is important when managing a project because you are likely not handling every task alone. Managing your team involves supporting teamwork, resolving conflicts and evaluating performance. Those same skills apply to your own performance as a business developer.
What are the top three skills for a business development executive?
Out of the skills mentioned above, marketing, communication and sales can be considered fundamental to business development. If you want to become a business development executive, you should consider developing these three skills first. They are essential for business development operations in all fields and contexts.
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