Introduction to Business Development Process
An entrepreneur has identified the business Development Process he or she wanted to start and raised the capital. After due registration and identifying the premises, one starts the operations. Running and sustaining a business is as difficult as starting one. For a Development Process, every day is a challenge that has to be tackled and needs to have strategies to keep going.
10 Tips For Business Development Process
Here are the ten successful tips for Business Development Process
Invest in good human resources; they are a vital asset
Depending on the nature of the industrial raw materials, premises and equipment may be required for starting a business development meaning and for on-going operations. However, the most important asset for any organization is its human resources, whether it is a small retail outlet, a medium-sized manufacturing unit or a company providing financial, technical or media services.
Automation may have streamlined the operations in many industries, reduced labour requirements and improved efficiencies; however, robots and automated software are no substitutes for human effort and talent; therefore, it needs to be nurtured. Even in a retail operation whether it is food, groceries, books and stationery, textiles and a variety of other sectors, the quality of the salesman matters, his or her pleasing manners, ability to communicate with customers and understanding their requirements are vital for Business Development Process and income. The golden rule is that pay handsomely for the best talent, even if that means reduced income for the business owners for a while. Without these talents, the company cannot hope to make a dent in the market.
As the company grows, a full-fledged human resources department may have to be set up to manage payrolls, appointments, ensure that employees are satisfied and sufficiently motivated. In many industries such as IT and Business Development Process Outsourcing (BPO), attrition rates are high not only because there is a huge requirement for talented professionals but could also be due to poor HR management. Huge costs are involved in training a new employee at the entry and mid-management levels. If the company is not able to keep their employees for some time, it will have an impact on the projects and hence in customer satisfaction. Keeping attrition rates low and motivating employees through leadership and organizational programs will go a long way in its business development.
Ensure cash flows, profits will follow
Many entrepreneurs invest their life savings or even borrow to start a Business Development Process or expand operations. However, care should be taken in managing the finances. If the company doesn’t have enough cash flow or revenue stream, then day-to-day expenses and monthly expenses such as salaries, rent, consumables, payment to third-party service providers would be affected. When employees and other stakeholders don’t receive their payments on time, it will negatively impact the company operations.
Cash flow is like the blood in our body; it needs to constantly circulate in the company’s system to take care of all routine expenses. Some banks provide working capital requirements through an overdraft facility (OD), but that will be against some collateral provided by the entrepreneur either in gold, property or shares of major companies. Any such financial support availed comes with an interest cost which should be covered by the revenue received. Many online start-ups launched with much fanfare peter out soon, not because the ideas were inherently unviable, but there was no proper revenue model worked out. In the absence of such a model, the company will be incurring costs but not generating income.
In the beginning, the owners or promoters may not be able to take home any money, and gradually they need to build a reserve to grow the Business Development Process.
Advertising and the media-get noticed to grow
No business can survive without getting noticed by the people. Whether it is a mom-and-pop store in the neighbourhood or a company having regional or nation-wide operations, or pure-play online business development and marketing, consumers need to notice. Hoardings, banners, newspaper and TV advertisements, online promotions all may be required to an extent to make the companies and brand presence in the consumer minds.
Initially, there may not be a huge budget for market promotion activities; however, brand or product awareness is vital for sales growth and can’t be avoided. Even small retail outlets or businesses sent out flyers to nearby homes and commercial establishments to make their presence felt. Some companies use hoardings on vehicles specially designed for them and employ young boys and girls to distribute leaflets or play some audio-video promotional clippings to attract the crowd and to distribute leaflets.
Importance of the Unique Selling Proposition (USP)
A company’s product or service may not appeal to a consumer just on qualitative merits but has to provide some value to the consumer. Hence, experts point out that consumers may not be willing to spend for a product on better user experience or increased engagement even if they find the product good and useful.
It should be perceived quantitatively as providing a lower-cost solution, helps reduce drudgery as in a dishwasher or washing machine and improved convenience parameters. Or it could be environmental benefits from driving a noiseless battery-charged car or an organic food free of pesticides and insecticides.
Importance of brand building
Any commodity available in the market may qualitatively be as good as the other. But consumers perceive brands to be always providing value and quality to consumers every time. That is the reason why the industry needs to develop brands to grow. Branding begins from the creation of a logo, the unique selling proposition (USP), positioning in the market, whether it is an entry-level, regular or premium category and what all images and ideas should be associated with it.
Real estate firms focusing on sea-view properties highlight the lifestyle and refined taste of natural surroundings. The premium motorbike targeted at teenagers and the youth could focus on the power and passion of owning such a vehicle.
However, brands create a huge responsibility for the company to invest in research to bring out innovations and modifications to the products. In fact, many companies don’t even spend 1% percent of their turn over on R&D, which is very vital for their growth.
This Are Not A Business Development And Marketing Or Sales
Companies or entrepreneurs have a tendency to equate sales promotion activity with business development activity. Both are different- business development meaning is the macro picture, while sales are the micro part of it. Business development and marketing development encompasses all the efforts to grow the business to a new level.
As in economic theory, normal supply-demand dynamics work if the output is not varied much so that the quantity sold will fall somewhere on the supply-demand curve. However, if the demand curve has to shift to the right, more consumers have entered the market, creating a huge demand for the product. Likewise, salespeople for a particular product are more focused on achieving better sales in a chosen territory and distributor network. However, the business development and marketing team may work on creating new tie-ups, business partnerships, develop customized products for markets or start a new manufacturing activity in a farther region not accessible easily from the headquarters.
Maintain good relations with government and regulatory authorities
Any business cannot survive without the assistance and support provided by the state and federal governments. Many state governments aggressively woo entrepreneurs to invest more in start-up or incubation facilities or invite large and medium scale businessmen by providing subsidized electricity, an infrastructure facility, tax concessions, etc.
Sometimes land at a very low lease or rent is provided to large investors so that their manufacturing activity generates more employment and business activity in the region. This, in turn, leads to better tax collection and revenue for the government. This, in turn, helps them to carry out citizen-friendly services such as roads, hospitals, parks, and cleaning public places.
A business institution may have to deal with a plethora of government and semi-government agencies related to taxes, environmental clearance, fire, safety, labour, among others. Tax evasion is not ethical or advisable, but tax avoidance or reducing the incidence of taxation as per investment schemes suggested by the government can be opted to be seen as a good corporate citizen. Many entrepreneurs come into the limelight when they have declared the highest taxpayers of the year.
Get in touch with clients and customers
Unlike product companies, those providing service and turnkey solutions need to engage with clients to understand their requirements and feedback constantly. Otherwise, the company may be perceived as only bothered about gaining Business Development Process and not interested in building relationships. Contacts can be maintained through personal visits, phone calls, email and social media platforms.
If the company has expertise in operations, provides free advice, updating clients on best business practices, and can be invited to attend workshops and presentations by experts.
In business-to-business (B2B), it is essential to be in touch with top decision-makers in the target company as there is no idea which team or group may be making the purchase decision. It could b procurement, product management, engineering, business development, or any other hidden personality in the organization.
Using the fear strategy
Most often, the best strategy to close a deal will be to sell on the ‘fear’ strategy. If you don’t take this offer, the competitor might take and gain in the marketplace. The company could set an artificial deadline stating that the client could miss out on a fast-approaching high-visibility opportunity (conference, big announcement, deal). A competitor is already in the arena and is likely to miss the trend. Or a particular offer that closes by the end of the month and the possibility of a high increase in cost thereafter, all these strategies may be adapted to close deals in the case of companies that have a tendency to postpone decisions although they are convinced about the requirement of the product or service.
Seeking legal counsel, make deals carefully
A company may have to tie-up for marketing, outsourcing their requirements, and various other services related to Business Development Process development. If it is a joint-venture (JV)deal to create and market a product or service, make sure the deals are right. A legal counsel may be required to scrutinize the documents, and some background check of the partners in the deal may be warranted. There should be a proper checking of the track record in honouring commitments and promises. Many companies have been weighed down by a bad deal and later regret it. This will lead to loss of market share and a fall in shareholder returns. Some companies expand through franchise networks. Here to a caution should be exercised, identifying financially sound entrepreneurs with exposure to the domain and previous track record in doing Business Development Process or exceptional career record.
Business Development Process development is a continuing exercise for a company irrespective of how old or its position in the industry vis-à-vis other competitors. A company needs to diversify its operations in due course as its core product market could become saturated, not enabling the company to grow. It may have to risk charting into new territory with accrued reserves and some financial support from outside.
A good mix of debt and equity are resorted to by companies to grow. However, shareholder value is perceived by the investors on a variety of parameters, and also market timing is important in the case of public issues and rights issues. If the market is in a recessionary mode, there may not be many takers for the shares issued or in case of falling interest rates; the debt could be a good option if the company sees a good revenue model for its new projects. Ultimately, it boils down to the vision the promoters have about the company, not for the short term but 10 or twenty years down the line. It will have a bearing on all the initiative that they take now.
This has been a guide to Business Development Process. Here we have discussed the basic concept with ten successful tips for Business Development Process. You may also look at the following articles to learn more –