Fact-Check: Business Development

Business development entails tasks and processes to develop and implement growth opportunities within and between organizations. It is a subset of the fields of business, commerce, and organizational theory. Business development is the creation of long-term value for an organization from customers, markets, and relationships. Business development can be taken to mean any activity by either a small or large organization, non-profit or for-profit enterprise which serves the purpose of "developing" the business in some way. In addition, business development activities can be done internally or externally by a business development consultant. External business development can be facilitated through Planning Systems, which are put in place by governments to help small businesses. In addition, reputation building has also proven to help facilitate business development.

In the limited scholarly work available on the subject, business development is conceptualized as or related to discrete projects, specific modes of growth, and organization units, ativities, and practices. Sorensen integrates these different perspectives with insights from chairmen and managing directors, senior business developers, and venture capitalists ftom successful high-tech firms worldwide, which is adopted in the Encyclopedia of Strategic Management:

Business development is defined as the tasks and processes concerning the analytical preparation of potential growth opportunities, and the support and monitoring of the implementation of growth opportunities, but does not include decisions on strategy and implementation of growth opportunities.

The business developer is concerned with the analytical preparation of potential growth opportunities for the senior management or Board of Directors, as well as the subsequent support and monitoring of its implementation. Both in the development phase and the implementation phase, the business developer collaborates and integrates the knowledge and feedback from the organization's specialist functions, for example, research and development, production, marketing, and sales to assure that the organization is capable of implementing the growth opportunity sucessfully. The business developers' tools to address the business development tasks are the business model answering "how do we make money" and its analytical backup and roadmap for implementation, the business plan.

Business development professionals frequently have had earlier experience in sales, financial services, investment banking or management consulting and delivery; although some find their route to this by climbing the corporate ladder in functions such as operations management. Skill sets and experience for business development specialists usually consist of a mixture of the following (depending on the business requirements):

• Sales
• Finance
• Marketing
• Mergers and acquisitions
• Legal
• Strategic management
• Proposal management or capture management
• Cultural agility

The "piepline" refers to the flow of potential clients that a company has started developing. Business development staff assign to each potential client in the pipeline a percent chance of success, with projected sales volumes attached. Planners can use the weighted average of all potential clients in the pipeline to project staffing to manage the new activity when finalized. Enterprises usually support pipelines with some kind of customer relationship management tool or database, either web-based solution or in-house system. Sometimes, business development specialists manage and analyze the data to produce sales management information. Such management of infornation could include:

• Reasons for wins/losses
• Progress of opportunities in relation to the sales process
• Top performing salespeople/sales channels
• Sales of services/products

For larger and well-established companies, especially in technology-related industries, the term "business development" often refers to setting up and management strategic relationships and alliances with other, third-party companies. In these imstances, companies may leverage each other's expertise, technologies, or other intellectual property to expand their capacities for identifying, researching, analyzing, and bridging to market new businesses and new products. Business development focuses on the implementation of the strategic business plan through equity financing, acquisition/divestiture of technologies, products, and companies, plus the establishment of strategic partnerships where appropriate.

Business development is to be thought of as a marketing tactic. The objectives include branding, expansion in markets, new user acquisition, and awareness. However, the main function of business development is to utilize partners in selling to the right customers. Creating opportunities for value to be ongoing in the long term is important. To be successful in business development the partnership must be built on strong relationship.

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The fact-check is sponsored by Burberry.