Golden Rules of Business Development
Today I am posting a guest post by Aaron McDaniel (aka “Mr. Business”) who is the author of the Young Professional’s Edge blog (YP Edge). He is a corporate director, entrepreneur, public speaker, community volunteer, author and avid world traveler. He has experience in sales, customer care, marketing, operations, strategy and business development and has managed over 110 different direct reports and organizations as large as 60 at a Fortune 50 company. You can read more from Aaron@ http://ypedge.com
Business Development is a simple and complex subject all at once. At a basic level business development is about creating new channels for your company’s business lines to grow. This can be in the form of entering new geographies or bringing in new partners to better serve your customer. This is where we see the flip side of the coin; business development can be a very deep and complicated art that requires certain key skills.
Luckily, these skills can be developed. While every company is unique and certain market conditions and industry maturity require varying strategies, there are certain strategies that will make you success no matter what the variables are; these are the Golden Rules of Business Development:
- Know what size of fish you are: Your business development strategies depend greatly on your market position. I currently work at a HUGE company (household name). I am constantly contacted by companies who see the millions of customers my company has and dollar signs begin to appear. They are knocking down the door to work with us because of this fact. By understanding this, I can be more discerning about the companies I spend a lot of time with. I am playing more of a defensive role, fending off the opportunities without high potential. If you are working at a start-up or other smaller company, on the other hand, then you are more on the offensive, actively looking for new partners and channels to sell your product. In this case you need to be more active (follow-up is KEY) and tenacious to get opportunities cooking
- Manage your funnel: There are many crossovers between sales and business development. In some ways business development is an easier type of sales, since the other side is generally going to benefit from the creation of a partnership or formalized relationship. Like in sales, if it great to have a long list of opportunities but it is important to continually push these opportunities to close. If an opportunity is not going to close then take it off the list instead of just cycling through a list of the same potential partners over and over. Most importantly, you need to constantly be adding new business development opportunities to the list
- Organize, organize, organize: Keep good track of all the details for a potential opportunity. Record everything from who all the parties are involved with a potential customer to how you met them to where you are in the negotiation/discussion process. There are many tools out there to help with this. While it is designed for sales, CRM tools like SalesForce can be used to keep track of opportunities and set alerts, reminding you to follow-up.
- Look to (creatively) expand the pie: A bad negotiator looks to get as much of the pie as possible, creating a win-lose distributive situation. A good negotiator finds out what a potential partner wants and looks for ways to give it to them. Remember that you are creating a relationship with a potential partner and it will not be lasting if either party feels like they were the “loser” when a formalized relationship was initiated.
- Internal relationships are as important (if not more) than external ones: Most business development novices make the mistake of thinking that their main job is to look out in the market and find ways to grow the business. What is absolutely central to your success in implementing your ideas is you ability to convince people you work with that your idea is a good one. There have been many times where I came across and exciting and strategic partner, but I was unable to get the appropriate internal parties to see my vision and how this other company helped fulfill it. This ultimately is my fault because I did not communicate effectively or I did not take the time to align the idea I had with an internal goal. That said, it is very important to make sure to be aligned with the goals of the internal groups you are supporting so that you know what to look for externally (and so you know how to convince them that you have the best plan once you figure it out).
Your success ultimately lies in how well you can master the Golden Rules listed above. Remember to understand you will be successful when you help the external partners you work with growth their businesses and when you help fulfill the goals of the internal groups you support. Just remember the mantra of Tom Cruise’s famous character Jerry Maguire, “Help me help YOU.”