What Is Business Development? A Definition for Small Business Owners
Updated: Mar 24, 2021
This text is from our consulting firm's latest 321 Biz Development podcast found on fifteen podcast platforms.
In the simple terms, business development can be summarized as the ideas, initiatives, and activities that help make a business better. This includes increasing revenues, growth in terms of business expansion, increasing profitability by building strategic partnerships and making strategic business decisions.
Here’s a better explanation in terms of communicating with the 321 Biz Dev podcast audience.
Business Development is increasing sales revenue by building an active, healthy sales pipeline. An active, healthy sales pipeline is defined as contacts being made on a regular basis, entering the sales pipeline, and prospects at the appointment stage are being converted to new clients, and zero cost referrals are generated throughout various stages of the sales pipeline.
This business development and sales pipeline is exciting stuff, huh? Come on, be serious. Some listeners are already falling asleep. Lol!
To be honest with listeners, the material discussed in this episode IS exciting to only about 10% of small business owners who want to understand and who already understand that increasing sales is an art and science.
True business development brings a trusted template to business owners to realize sales predictability, add new customers and achieve acceptable and higher ROI (return on investment).
The keywords in the last paragraph are predictability and ROI.
ROI, in the context of business development means, the small business owner is satisfied with the profit after the business development investment.
So, what are the top components of a business development plan? The top components are: contacting, prospecting, appointment setting, closing and getting referrals. Each one of these components form the infrastructure of the 321 Biz Dev sales system called SWAS, or Selling Without Appearing to Sell.
Who is qualified to implement and execute a business development plan?
The qualified person is the man or woman who has mastered those 5 components I just mentioned: contacting, prospecting, appointment setting, closing and getting referrals.
Can a small business owner hire a 9-5 person to meet the requirements of a business development position? Most likely not…not the small business owner. The big corporate employer can, most definitely.
A small business owner to whom this podcast episode is directed cannot afford to hire a business development specialist at a monthly salary of $5,000 in the South or $8,000 on the West Coast, plus benefits.
What if the newly hired business development specialist cannot produce and just lays eggs for the first 90 days until he or she is fired?
For small business owners even contemplating hiring a full-time business development specialist, here are a few red flags to consider:
There is high turnover in business development positions at small employers. Most hired people cannot do the job.
Small business owners do not offer training to hired business development specialists. The cost is about $30,000 per trainee with training offered by popular sales system training schools like Miller-Heiman. Only large corporations can afford to send their sales executives to schools like Miller-Heiman.
And corporations who send their newly hired sales executives to these training programs must wait until the sales executives move through the sales learning curve. This learning curve duration, or the time it takes for a sales executive to become proficient, is 1,000 to 1,600 hours or 6 to 9 months. No small business owner can afford to wait 6 to 9 months for sales to come through the door...and pay $5,000 to $8,000 per month. This situation would shut down most small businesses.
And please do not hire a social media manager, thinking you are getting a business development specialist. These two job titles and responsibilities are as different as night and day.
Here’s the challenge with finding a business development specialist. These individuals are hard to find because the right person needs a mixture of mental maturity and experience, with mental maturity having the highest percentage.
For mental maturity, I would say age matters, but age is not a deciding factor. The person with a high mental maturity component is naturally comfortable within their own skin. I know this is a vague statement. Another mental maturity qualifier is: does this man or woman have a belief system where, if they believe in something, they will take action?
In corporate America, where I managed 60 account executives at a health insurance company in Los Angeles, our company screened candidates using psychology assessment exams. If the candidate did not score high enough on the exam, he or she was not hired. The company was unwilling to invest thousands of dollars in training and pay close to $80,000 in salaries plus benefits if candidates could not pass the assessment exam.
A second mental maturity qualifier is what experiences, not sales experience, has this person had in the past that built their character?
Listeners may be thinking I’m referring to the perfect person who has had all their ducks in a row throughout their life. Not true. Often, the man or woman with past life challenges…which they overcame…is the person with the greatest mental maturity.
Next, let’s talk about business development experience.
Again, it’s rare for a small business owner to find a qualified candidate with experience willing to work at a law firm, CPA firm, dental practice, home health center, plastic surgery center, an insurance brokerage or a real estate brokerage.
Business development experience is defined by identifying how was this person was trained to sell in past sales roles? Did the candidate use trial and error methods to sell or did he or she sell products and services using a proven sales system?
A candidate with sales experience using a sales system can be hired on Friday and begin filling the sales pipeline with contacts and prospects the following Monday. A candidate without sales experience using a sales system may take months to build a solid pipeline...if he or she ever does build a solid pipeline!
What can a small business owner do to help a newly hired business development specialist with no mental maturity, and inexperienced, get up to speed to build the sales pipeline to generate additional revenue? If the small business owner is unfamiliar with sales pipelines and sales systems, the small business owner cannot help the newly hired business development specialist.
Business owners may be thinking what does a template even look like to even begin designing a sales system. Here is a high level design business owners should start with:
The product or service sold to customers must do exactly what is claimed.
The product or service must put customers in a better position than where they were before purchasing the product or service.
The product or service must have unquestionable value, defined by the customer, not by a company marketing scheme.
Company business development specialists must use a proven sales system.
The sales system design should be reverse engineered. Meaning, the sales system must be designed from the stage when the product or service is delivered to a satisfied customer and worked backward to the time the customer was first contacted.
If it seems 321 Biz Dev has provided a good definition of business development, it’s because five years ago, we assumed if a sales system were provided to small business owners in a classroom setting over a couple of days, they could generate sales on their own. This was not true.
In 2016, 321 Biz Dev added the business development feature to support small business owners over a period of 6 to 12 months to work alongside business owner staff, helping them move through the sales system learning curve. And in some cases, 321 Biz Dev provides virtual business development services for agreed upon fees.
If this episode provoked some deep thought about improving your sales performance, please do not hesitate to contact me, Rick Nappier, at 726-999-0999. Or, if you are Spanish language business owner, please contact Yeilyn Rodriguez, VP, Business Development specialist at 786-697-3400. Ms. Rodriguez is fluent in both Spanish and English.
Interested parties can click HERE to complete a 5-minute questionnaire so 321 Biz Dev can learn more about your current sales situation or learn about your current or past experiences with trying to improve sales performance. Please complete the questionnaire and a 321 Biz Dev specialist will contact you within two business days.
We hope your enjoyed today’s podcast episode.