business development

What Is Business Development And Why Does It Matter For Your Company?

“Business development” is one of those terms that, on the surface, is pretty self-explanatory. Clearly, it refers to helping a business grow into a viable, sustainable source of profit. But at the same time, the term is quite vague.

A lot of different factors go into helping a helping a business grow, from marketing and sales, to increasing profit margins and distribution. So what is business development exactly, and why does it matter for your company?

There is no single definition of the term “business development” that is widely used, but it could be defined as the pursuit of opportunities designed to create long-term value for a business.

In that regard, business development is not concerned with immediate “wins” such as a big sale, or a limited-time offer. Instead, the key focus of business development is to increase the value of a business in the long-run, such as by establishing a strong base of repeat customers, or improving a brand’s name-recognition and reputation.


Measuring Business Value

So when we ask why business development is important for your company, the answer may seem obvious: value is good. But there are many ways to measure value, and not all of them are worth as much as the others.

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“One of the most basic ways to measure the value of a business is to look at the profit it makes”

Terry Abbott, Shelbourne Accountants

Looking at profit alone is a simplistic overview, but many things can affect business value in the short-term, such as a big, one-off sale.

Contact Shelbourne Accountants to see how we can help in your business development strategy

This would make the profit for that particular year look bigger, but if the sale was a guaranteed one-off, then this profit does not accurately reflect the overall status of the business in general.

Measure By Intangible Assets

Another, less-common way to measure value is to look at its intangible assets.

For example, a comprehensive global supply chain is an incredibly valuable asset for a business to have, as it enables them to introduce new products to as many different markets as possible in a short period of time.

This will attract better business partners and enables them to negotiate more lucrative contracts. Alternatively, if you owned the intellectual property rights to a biodegradable form of plastic, you would not need to make any sales before the value of your business increased substantially.

The Five Stages Of Business Growth

Business development prioritises opportunities such as these, which create long-term value, but also take longer to build up. Exactly what kind of strategic opportunities a business developer will pursue depends on which of the five stages of growth the business is at.

Stage one: An Idea Is Born

The first stage is where the idea is born, which involves identifying any potential long-term opportunities, whether there is a gap in the market, and if there could be profit.

Stage Two: The Idea becomes a business

If an idea is worth following up on, the next stage is to turn it into a business. In this stage, the development opportunities include seeking funding and investment, finding the best staff, and identifying and securing customers.

Contrary to the definition of business development as seeking “long-term” opportunities, you could argue that this stage focuses on securing enough funding in the short-term to keep the business afloat.

However, this is just a means to securing the long-term goal of creating a viable and stable business.

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Stage Three: Bringing In New Customers

The third stage is quite important in terms of business development, but can often be skimmed over by entrepreneurs who get swept up their success so far.

Logically enough, most businesses in this stage want to bring in new customers, and scale the business as much as possible. But before trying to increase profits, it is best to try to increase your profit margins.

Once the business is established and has a reliable client base, you have a period of reasonable safety.

Stage Four: Increasing Business Profitability

This is the time to try and increase your productivity, lower costs, and increase your profitability.

Not only will it be easier to attract customers with a better, cheaper product or service, but any subsequent sales you do make will be more profitable for you.

Once you have made your operation as efficient and cost-effective as possible, it is time to scale the business. This involves seeking new clients, as well as new distribution channels, in order to increase your share of the market, as well as identifying any new potential revenue streams.

This could include things like a subscription-based service, the introduction of a new product to your portfolio, or the repositioning of the business in order to enter entirely new markets.


Case Study: Michelin Star

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A perfect example of a company that has done this well is Michelin. Few badges of honour in any industry command the same level of recognition and respect as the Michelin Star. And yet few people ever stop to wonder why the ultimate prize in decadence and sophistication is awarded by a company that sells tires, one of the least glamorous products available. In reality, the reason is ingenious for its simplicity, and highlights exactly what a good business developer should be doing.

In the early 20th Century, around the time cars were becoming more commonplace and less of a luxury item reserved for the rich, Michelin had a strong international distribution network. Using this network, the compiled a free guide with information to help motorists, from maps and repair instructions, to hotel and restaurant recommendations. The initial idea was to encourage people to drive more by making it as easy and appealing as possible, thereby increasing tire sales. Today, the guide is so successful in its own right that many people never even realise it is associated with a tire company.


Stage Five: Business Maturity

The final stage of business development is when the business matures, which is marked by an increased, stable market position, and a plateauing of the rate of expansion.

But even if profits are healthy and you own a huge share of the market, stagnation is never a good thing for business.

At this point, therefore, a business developer needs to decide the way forward.

This means either going back to stage four and looking for new opportunities to expand, or simply deciding that you have taken the business far enough and planning your exit, such as by selling your stake in the company or taking it public.


In some ways, business development is a relatively formulaic process. In order to be done as well as possible, the stages should be followed in sequence, which pretty much anyone can do. But ultimately, the people who will be most successful at business development are those who can think outside the box, and identify opportunities that others have missed. If you can do that, then achieving success could be as easy as simply sticking to the formula.

10 Little Known Resources That'll Make You Better At Business Development

One of the oldest questions in business is “Which matters more, education or practical experience?”. In reality, a healthy mix of both will always be the preferred option, but when it comes to striking this balance, there is one major pitfall in which many people become trapped without ever realising. Namely, we tend to have the mentality that education is something you get when you are younger, before moving on to practical experience.

Today, this idea of learning everything you need to know and then heading off to work just doesn’t apply anymore. The world moves so quickly now that entrepreneurs who want to get an edge over their competition need to be constantly retraining and absorbing new information, or they risk getting left behind. But this does not mean you have to go back and get another college degree. As long as the information is reliable and well-sourced, it doesn’t matter whether it comes from Harvard or YouTube, so here are 10 resources that will make you better at business development.


Khan Academy

Of the many free online courses available today, the Khan Academy is widely regarded as one of the best. The not-for-profit organisation offers ad & subscription-free access to courses covering a broad range of business & finance-related subjects, including but not limited to maths, economics, finance, and entrepreneurial skills.

The courses offered by the Khan Academy can help you improve your business development skills directly, or can help you better understand a particular subject that may be related to your field, such as engineering, health, coding, and much more. If you’re looking to fill any gaps in your academic knowledge, this is the place to start.

To Bid or Not to Bid

Not all education revolves around learning theories, formulae, and cold, hard facts. In many cases, it is just as important to learn about business tactics and judgement, but this can be a lot harder to do.

Learning through trial and error can be a risky and expensive process, especially when it comes to things like bidding for contracts. Not only do you want to avoid investing too much time and energy into farfetched prospects, you also want to avoid winning anything you can’t deliver on, or you could find yourself at the centre of the next NCH debacle. This checklist can help you separate the realistic from the unrealistic, and decide whether or not you should place a bid.

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Hubspot Academy

Hubspot may have more name-recognition than the Khan Academy, but it is lower in the ranks for one reason: not all of its courses are free. Many are, but some require an active Hubspot subscription to sign up and complete, which could be a barrier to some.

While the Khan Academy focuses mainly on the financial side of business, Hubspot Academy focuses more on the marketing side of things, so it is not necessarily a case of choosing one over the other, but the right mix of both.

Future Risks and Opportunities

One of the most crucial skills to learn in any line of business is risk-benefit analysis, which is another example of a time when trial and error can be a costly process. It can also be quite difficult to attribute these relatively abstract concepts to a number of potential outcomes. The Future Risks and Opportunities Toolkit is a very comprehensive document will walk you through various steps and methods needed to calculate the likelihood of various options, and identify any potential problems that may arise, enabling you to make an informed decision and avoid any unnecessary risks.

Investopedia

If you regularly read up on business or finance-related topics, then you are likely already familiar with Investopedia, which maintains one of the most comprehensive financial dictionaries on the web.

What you may not realise is that Investopedia also provide detailed guides on a variety of finance-related topics.

While the range of topics Investopedia covers is not as broad as the likes of the Khan Academy, they do offer guides on more specific subject matter related to taxes, investment, financial theory, and so on, so if you’re looking for very specific information rather than a general overview, this is where you should look.

Podcasts

While the Khan Academy is a great resource for a laying a broad foundation of knowledge, and Investopedia helps you find answers to specific questions, anyone who is a true expert in their field will understand both established mainstream theory, and new or alternative views.

So while you certainly want to get most of your information from clearly reputable sources, it is also useful to hear from those who may not be as well known, but who have expertise and experience that could benefit you. Podcasts are the perfect way to do this, not only because there are so many to choose from, but also because they tend to get alternative viewpoints on the most topical issues, ensuring that you are kept in the loop with regards to the latest developments in your field.

Ted Talks

Ted Talks tend to delve into their subject matter in a single video, placing them somewhere between a free online course and a podcast.

Ted Talks tend to delve into their subject matter in a single video, placing them somewhere between a free online course and a podcast.

Ted Talks cover an extremely broad range of topics, from personal stories of social issues to easy explanations of complex scientific subjects. As there is no overarching narrative to the Ted format, it can be easy to forget what a valuable resource they are. But since they can be hosted by almost anyone, you can find a Ted Talk on almost any subject these days.

Self Coaching

One of history’s oldest and most popular ways to hone your abilities in any field is to get a mentor. But finding a good mentor who you respect and who is willing to take you under their wing is not always an easy thing to do. And although a mentor is not a necessity, you still don’t want to miss out on any possible feedback or insight.

This self-coaching document has been designed to walk you through a series of questions, depending on whether things are going well or not-so-well at work. It may not be the same as a real mentor, but it can teach you how to self-reflect and criticise constructively.

Partnership Analysis Toolkit

Who you decide to do business with can determine whether or not you are successful, so ensuring that all of your partnerships are working in your favour is a crucial step in protecting yourself from being brought down by somebody else. This Partnership Analysis Toolkit was designed for the health sector in Australia, although the material is not specific to that sector. Using this toolkit can help you determine if a partnership is a healthy one, or whether you may have conflicting interests down the line and need to part ways.

Business Development Toolkit

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There’s no point in developing the individual skills needed for business development without actually studying business development as a concept as well. This toolkit by business psychologist Alan Bradshaw walks the reader through the various stages of developing a business, covering everything from how to choose a premises, to building rapport with clients.


Business development is a broad topic filled with lots of different tactics, theories, and techniques. It is not an exact science, and not everything will apply equally across the board. The key thing to remember is that business development is a never-ending learning process. Not all of the information you learn will be useful to you right now, but by casting a wide net and learning as much as possible, you can prepare yourself for anything the business world might throw at you.