An increasing amount of companies are hiring, “Business Development Managers,” and when reading the job description, it sounds like a great gig. Wining and dining and finding, “partners?” Well actually, there’s a bit more responsibility to it, and those seeking to be a, “biz dev,” as well as companies carving out this position, should really think hard about how they will utilize such an important position to its full potential. Biz Dev blogger Scott Pollack defines Business Development as “theÂ creation of long-term value for an organization from customers, markets, and relationships.” That creation takes more than just going to a few conferences and, (just like anything else), it takes a special skill set.
Business development positions are not necessarily sales. Unfortunately companies are re-defining core sales positions and giving them a “business development” title in order to capture more candidates. By companies misusing the business development tag on sales titles, the true Biz Dev position can be confusing to those who desire it, when they really don’t even know what it is.
Business development is its own niche position with revenue goals and targets, a line position responsible for generating value that helps guide the CEO with indispensable information. It’s understanding the product, industry, and understanding the CEO’s vision to a level where good biz dev people can help make the right connections to achieve desired revenue and competitive results.
What is Good Business Development?
Good business development requires strategic thinking and direction from the CEO. The necessity of BD comes from needing to expand the marketshare and competitive advantage of the organization. The business plan is to hit a target market, capture a large percentage of the market, and then you’ve succeeded, right? Wrong.
Any business who is responsible to investors knows that once you’ve saturated your target market, its time to scale into other opportunities to maximize the investors’ money. Once an entrepreneur has achieved success in one area, the investors will realize that they have a team who can execute, and that team needs to push forward to total domination. Â The problem CEO’s and even VC’s have is knowing the best next move. The wrong move can sink everyone. Where do we scale? What’s the fastest way to grow for the least amount of investment?
Business expert John Boitnott says “Good business development understands the total vision and the problem that the company is trying to solve, and can identify partnerships, companies, and people who can help accomplish the vision. Business development requires intense research into emerging markets, competitors, and alliances to see where the product needs to go, who to sell it to, and who can help get it there.”
What to Look for in a Business Development Director
A Business Development Director position sounds good, but requires a very niche skill set. He or she needs to be both strategic and tactical. It’s not a sales position, but does require skills very similar to sales professionals in that he or she will need to be a greatÂ negotiator, and understand networking, prospecting, and building a pipeline of good business targets.
Where a biz dev professional might differ is his or her ability to provide in-depth market research, have a level of the totality of the business process, and the ability to understand product roadmap and industry metrics. Often this knowledge go beyond the level of what a normal sales professional would learn unless in a Vice-President position.
Some biz dev professionals may be in charge of finding small competitors to buy and add into the companies portfolio. This requires evaluation of finance and business metrics, Â which most average sales professionals may not have. These are entrepreneurial skills that require an understanding of the health of the business, its customers, and helping formulate what the true value of the company is, which isn’t for the feint of heart.
The best business development managers have deep experience in that particular industry, a good rolodex of players, the ability to focus and spend time researching or hiring research firms to understand market trends, and empathy for the problem you’re trying to solve for customers.
When You Need Biz Dev
Most entrepreneurs are doing their own business development, it’s the nature of the beast. The need for an actual business development manager comes when you can afford to add their salary to your burn. The earlier a team hires a Biz Dev Manager, the better their chances of staying ahead of the game.
Many companiesÂ will hit a wall at some point, hitting a barrier to the next level. Whether it’s new market trends, market saturation, or losing to the competition. Â The solution in this case is definitely a Biz Dev Manager. This professional should act as a consultant to the CEO to remove roadblocks, and turn the barriers into opportunity.
Other times to bring in business development are: when ready to start acquisitions, needing to move into new market segments, bringing in partners to adjacent industries for co-branding or network opportunities, and when wanting to integrate other companies into your own through API’s or other similar partnerships.