Business development activities can be done internally or externally by business consultants.  Business development can 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 that are long-term is very important.

 

To be successful a partnership must be built on strong relationships.  A strategic partner is more likely to share similar values and goals, which can lead to a win-win relationship, if negotiated under a mutually beneficial contract.  Relationships built upon an us against them mentality often fall apart at the first sign of trouble.  Strategic partners are more willing to invest capital resources in exchange for a long-term commitment, which also reduces their overall risk.

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The business development process should also include analyzing and choosing a growth strategy:

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1. Market Penetration - The least risky growth strategy for any business is to simply sell more of its current product to its current customers.

2. Market Development - Next is to devise a way to sell more of your current product to an adjacent market.

3. Alternative Channels - This growth strategy involves pursuing customers in a different way such as, for example, selling your products online.

4. Product Development - A classic strategy, it involves developing new products to sell to your existing customers as well as to new ones.

5. New Products & Customers - Sometimes, market conditions dictate that you must create new products for new customers.  This often is the most risky strategy because a business has to learn a new product and market at the same time.

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