What Exactly Is Business Development?

What Exactly Is Business Development?

The practice has been around for as long as I can remember, but it’s only had a name for the past 20 years or so. Biz Dev. Business Development.

Businesses used to be focused on being independent. It was a badge of honor to do everything yourself. That was especially true of small business. A hard charging small business owner never wanted to rely on anybody else or anything else to achieve success. It was that self-made man syndrome. Thankfully, somebody figured out that was a stupid strategy.

Larger business had long practiced collaboration, sometimes even with competitors. They just have to be careful to avoid being accused of collusion. That was then. This is now.

Today, the word is interdependence, not independence. Enter the practice known as business development.

Business development is the practice and process of growing a business fast by partnering with other businesses to enter a market that might otherwise be unreachable.

Some have speculated that modern biz dev began in Silicon Valley where everybody knew everybody, and where employees often went from one company to another. I suspect that with the advent of the Internet and high technology, Silicon Valley propelled the process faster than ever before, but businesses have partnered for a long time. It was an informal, individualized process though that hinged mostly on the owner of one business seeking out the promotional help of another business man. Long before the “biz dev” title took form, we simply referred to it as “cross promotion.”

Back in the 80’s during the early years of the video revolution consumer electronics stores sold blank VHS and BETA videotapes. I was working for a consumer electronics/record and tape retailer. The owner and founder was a creative guy. He got an idea to have 3M, makers of the Scotch brand of tape, including videotape, bundle a 6-pack of tape. Then, he got Coca-Cola – the local bottler – to give away a 6-pack of COKE with the purchase of a 6-pack of VHS or BETA blank videotape. It was an outstanding cross promotion tool. We sold truckloads of blank videotape, 6 at a time.

Did it penetrate a market not otherwise available? No, not really. It just moved a lot more blank videotape. Sales skyrocketed. It could be argued that we sold blank tape to people who might not have otherwise purchased it…so that would fit the “new market” definition. But that’s a subtle, but important distinction between cross promotion and business development.

Marketing and sales types don’t likely care because we all want to drive business. We want more sales, more customers and higher profits.

Fast growth is achievable because alliances and partnerships give us the ability to reach more people, and sometimes to reach completely different people. When it’s done well, biz dev doesn’t seek just it’s own, but it seeks to benefit the strategic partners. This is where so many companies get it wrong. They know what they want, but they don’t consider what their potential partners or alliances want. Biz dev is not a one-way street. Not if it’s going to be effective in driving business fast. And not if it’s going to be sustainable growth.

Business development isn’t a gimmick. It’s not a method of spiking business. Promotion spikes business. Biz dev is a methodical, sustainable, ongoing practice that can elevate a business to heights that would otherwise be unattainable.

In 2000 the Wall Street Journal published an article about Staples. John Mahoney was the CFO of Staples at that time.

“In the world of the Internet, you never know — your friends can be your enemies, and your enemies can be your friends,” says John Mahoney, Staples’ chief financial officer.

Bam! That’s biz dev.