What is Business Development?

Too often, I have encountered business managers hiring Sales people and classifying them as Business Developers. The same holds true when managers call their Sales people Marketing Professionals. Main reasons behind this misclassification are twofold: First, many people DO NOT understand what the differences are between sales, marketing, and business development. Second, organizations do not accurately recognize which of these functional areas need help to drive revenue and how they compliment each other. These misunderstandings of disciplines cause unrealistic expectations and failure to achieve goals.

Business Development (Biz-Dev) is often misunderstood. It is often times mistaken as purely a sales role and other times as a marketing initiative. Well, it is a little of both, but it is also much more. Understanding what Biz-Dev is and what it does can focus the strategic direction of an enterprise, which ultimately creates new opportunities. Biz-Dev can be sales oriented, but it also can act as an operational function to support sales. Biz-Dev supplements marketing, sales, operations, and management. All of these functions are dependent upon each other. Biz-Dev is part sales, part marketing, part strategy, part planning, and part management. Biz-Dev can also work on promotion of an enterprise or even relationship building functions.

Isn't a business developer's main job expected to generate sales? Isn't the lifeblood of business driven by sales? Yes, the ultimate business goal of an enterprise is to gain and grow sales. Even non-profit organizations need to raise money to survive. Without sales there is no revenue, without revenue there is no working capital, no working capital means no sustainability, and so forth. However, all units in an organization affect the outcome of sales. A company must define its purpose and objectives within their business plan. Upper management must communicate directives to staff and control processes. Employees are accountable to perform duties within their unit of responsibility. All units must work cohesively with their output contributing to the common goal of the company. For example, marketing cannot initiate a promotional campaign without input from finance, otherwise budgets and production costs will soon run into chaos.

Simply said, Biz-Dev is management process that uses resources available to an organization and coordinates plan activities to achieve goals. Sometimes the goal is increased sales, but other times an organization needs improvement or aid in another part of its operation. Examples that are not exactly sales oriented include business planning, administrative refinement, market research, finance, general management, and more. The bottom line is Biz-Dev can perform multiple initiatives to achieve a goal that will improve a functional business process resulting in opportunity. Think of Biz-Dev as project management for sales.

Understanding the various roles Biz-Dev can perform will improve the focus of your enterprise and help achieve its goals.

Hiring A Business Development Consultant - Mistake Or Opportunity?

I just finished searching the web for business and marketing consultants, and even as a professional Business Consultant, I was left confused and skeptical. The profession seems to be filled with those who over-promise, have little experience, and some who only want to sell you anything but knowledge based on experience. Fortunately, under the rubble, there are those who have spent a lifetime in business and who are practicing professional consultants with a great deal to offer the right customers. Since this is my business, I decided it might be time to offer my observations on why you might need a professional consultant, and how you can benefit.

I am a Business Development, Strategic Planning, and Marketing consultant. I specialized in helping small to mid-sized companies review their current activities and providing Critical Analysis, Strategic Planning and Implementation guidance in my areas of expertise. My goal is to help small business and mid-sized companies grow by understanding where they are today, where they want to go, and exactly how to get there.

With the disclosure out of the way, let me provide my guidance on hiring a business consultant, what to look for, and what to expect for your time and money.

1) EXPERTISE: The single most important reason to hire an outside business consultant is to bring in expertise that you do not already have in house.

Most people have a background in their industry, and many have experience in two or three industries. Some people even have experience with 10 or 15 products within that industry, but knowledge, experience and hands on management of a broader range of products, from over a hundred companies, and building marketing and distribution in diverse markets such as North America, Europe and Asia is experience few people have.

When you look for a consultant you want someone who has a breadth of knowledge and experience that exceeds that which you already have. Along with bringing a new or different perspective to your analysis and strategic planning, a consultant should bring knowledge that is outside the scope of your current environment.

By bringing in someone with a wide range of knowledge and experience in their area of expertise you supplement your current knowledge base. Most companies already have excellent people on staff performing their duties in the areas of business development, marketing and sales. Limitations occur because of the 'box' in which we work. You and your staff are running full speed ahead to keep up with the demands of your business. In many cases, you are putting out fires as quickly as they ignite (if you're lucky). This environment dictates that you focus on the job at hand. When you and your staff meet, you are discussing real problems that need immediate solutions. There is little time to research what other companies are doing and what is successful or not for them.

A consultant should bring an 'out of the box' perspective to your table the moment they walk in the door. They may not understand the minutia of your business immediately, but through discussion and some research they will bring new perspective and ideas to your problem solving and business planning process. Their expanded world view will open new doors of opportunity for your organization and offer ideas that have proven successful in other environments.

2) ECONOMICS: The second most likely reason to hire an expert business development consultant is saving money.

Hiring the expertise you need for every aspect of your business development process is not only impractical, but impossible.

When we need professional expertise we either outsource or bring on new staff. Today, in this economy, hiring new staff is a luxury most small business cannot afford. Outsourcing is a good alternative, and in the case of consultants, a highly cost effective alternative.

In addition to bringing immediate knowledge, consultants bring all the benefits of outsourcing. Taxes and Benefits are the responsibility of the consultant and never carried as overhead by the company. Costs are controlled and can fit your budget. Hiring and firing are as simple as picking up the phone. No job search, no severance. Consultants are usually available when you want them and expendable when you do not. For many that description is a little uncomfortable, but a professional consultant is an independent business person (or company) who works at the pleasure of YOU.

In addition to all the benefits of outsourcing, a professional consultant brings immediate payback. Duplicating the expertise of a good consultant might require 3, 5 or even 8 different positions to be filled by experienced managers. Each position requires training and integration into the organization. One expert not only provides the knowledge-base of those positions, but also hits the ground running.

Finally, regarding a good consultant's hourly or daily fee. My experience is that they are usually priced at the level of a senior partner in a law firm or regional accounting firm. When compared to the cost of hiring that same expertise on a long-term basis, they are almost always a bargain.

When hiring a consultant, clearly define your objectives and identify the deliverables he or she will provide. Always receive a firm bid quote. Then consider; can we do this in house? If so, what is the cost in using our own manpower, including the cost of pulling that manpower off other projects? If not (which is usually the case), then ask if the deliverables and benefits are worth the cost?

3) USABLE DELIVERABLES: You want a deliverable that can be used over a long period of time throughout the organization.

In most cases, you hire a business development consultant to help you solve a specific problem or more often help you define a plan of action for taking you where you want to go. In such cases, you want someone who can deliver in writing a road map for future activities. To do this, they must be able to guide you through a careful and thorough review process in which both you and the consultant identify what is working and what is not, and where the holes are in your present plan.

A good consultant will then be able to lead a strategic planning process in which the consultant, you and your staff collaborate on developing an expanded plan in which your ideas and wishes are combined with the consultant's to create a plan that is much better than anyone alone could create.

Finally, a qualified expert consultant will be able to create a written plan that includes a full marketing plan and budget that can be used as a guide, a road map if you will, to take you where you want to go.

This document should not be an academic study, but a dynamic real-world document that reflects the hands-on expertise of your organization and the consultant, and is used, reviewed, and updated on a regular basis.

4) OBJECTIVITY: You must have objectivity that ensures the advice you receive is in YOUR best interest.

You want a consultant that is objective with no conflicts of interest or hidden agendas. In order to give you the valuable information you're paying for, your consultant must have only one allegiance - you.

This doesn't mean that the consultant you hire hasn't, or won't in the future, work for companies in your industry. In affect, that experience and diversity of knowledge is what gives them value. It does mean that they sign a confidentiality agreement; they do not discuss or disclose any proprietary information to anyone outside your organization; and they are not obligated to another company in any way that would degrade their work for you. ­­­­­­­

What you want is someone who has the experience to be called an expert, and professional ethics to match their expertise.

5) HANDS ON EXPERIENCE: Finally, you want someone who has experience in the field. As a small business manager or entrepreneur you need experts who understand the challenges you face, and who have had to meet and solve those challenges.

As a small businessman in my first company (a drafting and engineering company) I hired someone who had been a high level manager with a very large engineering firm. I thought they would bring expertise in how to run my business. What I got was someone who was used to managing assistants and departments, but who had no real knowledge of how to get the job done. In other words, he understood big business and big budgets, but he didn't know how to roll his sleeves up and deal with my problems. After spending much time and money, I finally realized my mistake. After that, I made sure the advisors I hired had the hands-on experience of an entrepreneur and knew what running a small business was all about.

When you hire a consultant you want someone who has been there, built and managed companies, analyzed markets, and implemented and managed business development, marketing and sales campaigns in a wide range of markets for diverse products, for small to mid sized companies. You want a professional consultant with hands-on experience who understands your problems and can offer real world advice and solutions.

The best way to ensure you have an experienced professional that can truly help your organization is talk with them. A qualified consultant will have a history that speaks to your market, will have references, and will be able to communicate with you in a way that tells you they know what they are talking about. You will hear their competence in their answers to your questions and in the questions they ask you.

What I suggest is after you read their materials, visit their website, and complete your due diligence, call the individual(s) you think are qualified and talk with them. Ask questions specific to your business and industry, and listen carefully to the answers. If the answers are full of fluff and hyperbole know that the service you receive will likely be the same. If, on the other hand, you hear information that feels real, has substance, and reflects an understanding of the subject, you may have found someone who can truly help you shortcut the learning curve of building your business, help you reduce costs, and help you significantly move your small business or mid-sized company forward.

Some final comments about hiring a business development consultant:

Consultants may be experts, but they won't know everything about every industry. In most cases, you will know your industry and business better than they ever will. What a good business development consultant brings to your table is a diverse range of experience that can apply to your situation. They bring new ideas, and the ability to think outside of the box, which, when combined with your specific company knowledge, catapults your organization forward. Don't expect them to know upfront all your industry statistics or demographics, that they can obtain through research. What they will know is how to solve the broader questions of where you want to go and how to get there.

Professional consultants are full time and have been for a long time. They are not part time consultants and not 'between jobs.' Their expertise is born of long term work and effort, and it is displayed in the service they provide you.

The best consultants work on a fee basis, with costs quoted and known upfront. Proposals should be in writing and itemized to identify a projects objective, scope, and timeline. Transparency and no-surprises are exactly what you're looking for.

Good luck and good marketing.

 

Business Process Management Training

In business process management training, qualified executives look to the future and prepare. One important way to do this is to develop and train managers so that they are able to cope with new demands, new problems and new challenges. Indeed, executives have a responsibility to provide training and development opportunities for their employees so that the employees can reach their full potential. The cost of training represents a major investment, so executives are justifiably concerned about the effectiveness of the training.

Companies spend billions of dollars every year to educate their work force, and most of this money is spent on in-house training and development. It is important that management education is effective and efficient. Therefore, there is need for a systematic approach to manager and organization development. The term manager development refers to the progress a person makes in learning how to manage. Managerial training, on the other hand, pertains to the programs that facilitate the learning process. However, it is quite common to refer to management or manager development when talking about programs or approaches.

Before specific training and development programs are chosen, three needs must be considered. The needs of the organization include the objectives of the enterprise, the availability of managers and the turnover rates. Needs related to the operations and the job can be determined from job descriptions and performance standards.

Data about individual training needs can be gathered from performance appraisals, interviews with the jobholder, tests, surveys and career plans. Manager development and training must be based on a needs analysis derived from a comparison of actual performance and behavior with required performance and behavior. Analysis of the deviation from the standard might indicate that the manager lacks the knowledge and skills for forecasting and that conflicts among subordinate managers hinder effective teamwork. On the basis of this analysis, training needs and methods for overcoming the deficiencies are identified.

Business Development Metrics

So many professional service firms we meet bemoan the track record of most of their folk in developing new work and new clients in attractive niches. More than occasionally a practice leader confides that their technically competent team knows only how to "feed on the carcasses I kill" or "live like a leech on me".

Want things to change?

Well remember the management consulting mantra is "if you can't measure it, you can't manage it".
What gets measured attracts attention. If you want more of a particular behaviour or contribution, make sure you notice it, then recognise and reward it. Make heroes of those who do business development effectively. All tough to do, except anecdotally and sporadically, without tracking and dimensioning performance.
Here are some business development and client relationship metrics worthy of measurement, they will help you notice what matters.
Client relationship management:
o fees under management, exclusive of personal billings - that is, contribution to client retention and development beyond personal fee benefit
o fees under management, outside personal billings and own workgroup - that is, contribution to management of client relationships outside direct workgroup under supervision
o fees under management, outside personal billings, own workgroup, and practice group - that is, relationship management value contributing to the rest of firm and indicative of spread of fees and services.
These are relatively easy to measure.
You may not track the data for others, but it's worth doing if you want to dimension and reward - then get more - new business.
Client development - new business:
o new clients introduced/sourced - fee value this year, fee expectation next two years, fee potential next two years
o new work/types of matters from established clients - fees relating to classes of business not previously sourced from this client - fee value this year, expectation next two years, fee potential next two years
o win-backs - that is work won back from key competitors - value of current year fees, expected next two years fees sourced from named competitors
o new services selling - that is current year fees and expected next two years fees from new services availed by both established/new clients in target areas.
Activity emphasis achievement:
o tracking current year fees and expected next two years fees deriving from specific "emphasis" services - for instance, if environmental law is one of/the agreed service emphasis for next year, fees relating to that activity.
Too often, in our quest for objectivity, we measure only that about which we can be absolutely accurate and precise. However, we can get a quantitative handle (not to mention all the qualitative indicators) on aspects of performance which matter as much - and sometimes more - than the readily accounted and measured.
From a financial forecasting and future strategic health perspective, these metrics can be useful. To manage and promote business development and fee formation, these measures will help you establish contributions of an individual.
Just as a direct, current contribution to the financial health of the firm matters - measured through fees and other items - dimensioning individual and practice group contributions to business development and strategic success matters.

Essential Lessons on Small Business Development and Management

Business owners are looking for solutions for development or management of their businesses, but are advisers, coaches and consultants focusing business owners on things that don't produce rapid improvements?

Before going on it's important to consider these simple questions with answers...

1. Has the rate of business failures reduced in the last 5, 10 or even 20 years?

2. Do business owners now enjoy more time and money as a result of all the knowledge on business development and management?

3. What sort of results PROVE a strategy or methodology works, that you should adopt in your own business?

4. Finally, would you like to own a small or medium business that works in part or completely without you?

The last question is the most important...

If you're a small or medium business owner who answered "Yes" to this question, then this information will be of great interest to you.

The answers to the first questions would be, "No" and "No". The answer to question 3 could be varied, but should be, "Big profit jumps in months (not years)", or a better answer could be, "Significant and dramatically better time and money outcome in months".

Strategy choice determines progress in business.

If you're in business, you're always using a strategy. It could be to 'work hard' 50+ hours a week, or focus on your financial numbers, or any other of number of strategies... but answer this, has the strategy you have been using produced significant and substantial, measurable improvements in your business in a few months? If not then your strategy must be flawed as months is too long NOT to have made progress.

Here's what's missing...

Business owners typically look at their financial numbers as a source of insight into choosing a strategy to develop their business - e.g. cost cutting.

Financial numbers show the outcome of a whole series of business processes. In all businesses there is a time line of events or processes that occur.

The inquiry happens first, then soon after a quote (usually in writing) or conversation takes place. Then sometime after that (a minute, hour, day, week or multiple months) a sale is generated. Once a sale is generated this doesn't mean the work or supply is started (unless its a retail business). The supply may begin after ordering of materials, or it could be that the work isn't started for weeks or even months.

After the work is started and then completed typically an invoice (or receipt or bill) is issued then at sometime in the future payment is received.

All of these events form a time line that is variable for all businesses, but the time line still exists.

When it comes to management and development its essential to know all the numbers in the time line of events by measuring all stages. That way you can make decisions in time.

Looking at the financial data is looking at the last step of many processes in the time line, but only after they have all occurred days, weeks or even months prior. Its too late then and as a result stress is created, which is primarily caused from the unknown.

Let's look at an example.

If you knew your business serviced or supplied 50 customers a week, that could equate to a certain income based on them spending an average amount (which can easily be measured). If your conversion rate of inquiries to customers was 33% then you would be generating 150 inquiries a week on average. If you look at financial data only, and if your time line from inquiry to receiving money was 30 days, then you would always be 30 days behind any decisions you make to develop or manage your business. This is poor management and very reactive.

If in one week your total inquiries dropped to 120 and you didn't know that, it would show up in your financial data a month later. If your inquiries stayed at 120 and you needed to average 150, then your sales would drop 20%, your level of staff needed in supply would be over capacity by 20% and your income will drop in the bank account by 20% in weeks to come. All of which you may find out too late.

A financial report is only a third of the management reporting you need.

To say a financial report of P & L and Balance sheet is a management report is ignorant of the fact sales and production reports are necessary. When you measure all 3 areas of a business you start to be empowered to make decisions about strategies that transform a business in a few short months.

Knowing how and what to measure and when becomes the true science of business development and effective management and is a unique skill in itself. If you want to know more on this and how to measure in any business that's a topic for another day.

Tim Stokes is a small business management with his company Business Building Mentors specializing in business training services for SME businesses. Business Building Mentors grows off-line businesses very fast by showing them how to rapidly increase net profits without having to increase their staff, costs or overheads.