Business development is conceptualized as or related to discrete projects, specific modes of growth, and organizational units, activities, and practices.
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.
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 successfully. 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; although some find their route to this area 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):
- Mergers and acquisitions
- Strategic management
- Proposal management or capture management
The "pipeline" refers to flow of potential clients which 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 the 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 an in-house system. Sometimes business development specialists manage and analyze the data to produce sales management information. Such management of information could include:
- reasons for wins/losses
- progress of opportunities in relation to the sales process
- top performing sales people/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 managing strategic relationships and alliances with other, third-party companies. In these instances the companies may leverage each other's expertise, technologies or other intellectual property to expand their capacities for identifying, researching, analyzing and bringing to market new businesses and new products. Business-development focuses on 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 very important. To be successful in Business Development the partnership must be built on strong relationships.