Business Development is the strategic growth driver that every business depends upon, to continue to remain a business, and a growing one at that. Businesses are developed at two levels, first from a strategic visionary level, and second from a go to market and execution level. While the strategic vision sets the right business framework in place, the go to market and execution delivers output to customers and growth to the organization. Business Development remains the greatest challenge even for established businesses and corporations worldwide.
Lets understand ‘business’ in a way that can help us understand what we need to do to develop business.
According to the Dictionary, Business has three meanings:
1. an occupation, profession, or trade: His business is poultry farming.
2.. the purchase and sale of goods in an attempt to make a profit.
3. a person, partnership, or corporation engaged in commerce, manufacturing, or a service; profit-seeking enterprise or concern.
Also, BUSINESS as a bacronym reads:
Benefits Upscaled from Solutions Implemented for Needs Experienced by (customer) Segments, Sustainably.
Trying to define Business
A Business is the result of our efforts to sustainably grow our profit from solutions we define and implement for target customer segments, which they benefit from.
There are several key words in this definition of Business. These key words are critical for Business, and therefore Business Development.
The first key word is “efforts”. We must make efforts to reach our goals. It is these efforts that give rise to the enterprise. Without efforts, there can be no change in state. This is very much like Newton’s Fist Law of Motion. Our efforts become our industry. It is because we are industrious that we make the change happen, make the benefit happen. It is clear also that our efforts have to be focused on the benefit being worked towards. Efforts that are not directed, not aimed at the desired benefit are a waste of our resources. Efforts are justified by the results alone.
The second key word is “solutions”. Our efforts have to result in solving our customers’ problem(s). If we do not solve any problem, or do not address any opportunity that is valued by our customers, we cannot have a business, let alone grow it. Our solutions are the ‘value propositions’ which our customers value, what they benefit from. Of course, we can only deploy solutions for which we have or build competencies. Our competencies depend on the abilities that we have or build towards our vision for our usefulness in our world.
The third key word is “profit”. Profit is the margin between price and cost. The amount of profit that a business is justified in making has many principles, but let us understand it in one simple way. There would be an amount the customers would have to spend or invest (customers’ cost) if they were to meet their needs by their own efforts. This would typically be much higher than what a supplier’s costs would be, because for the supplier it would be their core competency, while for the customer it would typically be a digression from their core business. The amount of profit agreed upon therefore, lies between the supplier’s cost and the customers’ cost. This ensures that its a win-win business relationship, so that the supplier gets more than what it costs them, and customers pay less than they would have to. Both customer and supplier profit. In the economic sense, profit is essential for businesses to not only survive, but to grow as well. This leads us to the fourth key word – growth.
The fourth key word is “growth”. Growth is imperative. Without growth businesses are not be able to survive. The reason for this is simple. Unless our profits grow at least as much as inflation, we wouldn’t even be able to maintain a livelihood or a lifestyle. Lets take inflation as it is, typically at 10% per annum. Given this rate of inflation, 10% growth in profits is neutralized by inflation itself, and we’re back to the same level of profitability as before. To satisfy the growth aspirations of the business and individuals associated with it, the business profitability needs to grow by multiples of inflation, first to grow the profitability, then to support growing individuals, and finally to reinvest in the growth of the business. Again, growth is imperative!
The fifth key word is “sustainably”. Sustainability of a business is a key differentiator between a business and an initiative. The sustainability of the growth in business and profit is what makes one business stand taller than others. Without sustainability, businesses become seasonal rushes of commercial and developmental activity. Sustainability comes from a critical mass being achieved, and with the investment in the vision to develop people and processes to focus on “efforts”, “solutions”, “profit”, and “growth”.
The Eight Practices of Business Development
1. Identifying Core competences and differentiating value
2. Validating the Needs Analysis – for the Business and the Customer
3. Identfying the Target Segments – Business and Consumer – Market scope and size
4. Defining Value Propositions – Entry points, Sustainable, Scalable
5. Plan for Development and Delivery of Value Propositions – make/buy,
6. Establishing Partnerships – G2M, Consulting, Expertise, Suppliers, Execution
7. Supply Chain Management – Roll-outs, Execution
8. Developing and Implementing Business Improvement Strategies and Plans – Continually
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