True Business Development for the Small Business - the Solution
successful introduction of the Whole Product into the Market involves an expanded defination of Business Development
Business Development for the SMB
1. The Goal of Business :
The goal of any business is to profitably generate revenue. All functions, responsibilities and company efforts are focused and dedicated to generating revenue. This mantra may be buried under more esoteric goals relative to the particular department/ function. However, the underlying goal of the company and the theme of each department, and function should be “to generate revenue”.
2. What is Business Development?
Perhaps we should define Business Development in its broadest sense. Business, as defined is “the act of engaging in commerce, manufacturing, or a service; profit-seeking enterprise or concern.” Hence, the Business Development specialist would develop programs, processes and efforts to enhance the business of the particular company.
3. Business Development functions in different sized companies :
All companies have the need to perform specific functions to survive in business. The typical company needs to engage in functions that include research, design, engineering, manufacturing, marketing, sales, business development, finance, operations and management.
In large corporations, there is typically an entire department that provides each function. In small companies, and especially in start-ups, although the same needed functions must be addressed and performed; there are fewer people to perform these tasks. This example defines the personnel make-up and structure of different sized companies.
The larger companies will hire highly specialized individuals who focus on a small segment of the business functions, or even a small specialty within a particular function. An example of this structure would be an employee who specializes in opt-in marketing over the corporate ebusiness website, within the marketing department.
In the smaller companies (SMB) or in the start-up, the personnel would be made up of the founders, who are generally specialists in their field, and who have developed a new, unique product or service. In the hi-tech arena, these founders are typically engineers. The other company members would be cross-disciplined, multi - experienced individuals that can accept multiple company function responsibilities – generalists who understand the basics and operational functions of business. Hence, fewer individuals, providing more functions form an efficient nucleus of the company and are usually individually responsible for their areas of expertise, and are involved in all decision making
4. Time frames of Business Development :
Also, in large companies, the Business Development function may be aimed at building strategic relationships with vendors or customers, developing alliance partners, and strategic planning of future endeavors. These projects typically are long term in nature and progress over 1-2 years.
In the SMB or start-up, the Business Development function focuses back on the “generate revenue” theme and provides efforts to realize that goal. As opposed to the time frame of the large corporation, the BD function takes place NOW. This activity must be cross-referenced with marketing, sales and business analysis, with a good understanding of the engineering, manufacturing, operational, finance and management functions.
The Business Development person, with the correct broad background of experience and skill sets, has a “cognitive overview and understanding” of the company - its strengths, weaknesses, competitive advantage, shortcomings, as well as the industry and the market.
From this “mix” the competent Business Development person can visualize opportunities to generate revenue. These opportunities may involve direct selling, channel distribution, alliance partners, design or manufacturing changes, product positioning and marketing. This person will analyze product attributes, market position, competition, distribution channels and customer characteristics to create opportunities to generate revenue.
As mentioned, the time frame in which the SMB Business Development person operates is NOW. Often, when start-up companies obtain angel or 1st round funding, they focus on developing and “baking” their new product or service. This is natural, because without a viable product, there is nothing of value to sell.
However, most start-ups are so focused on the engineering side of the business equation that they do not properly address the “selling” side of the business. Silicon Valley is littered with the corpuses of start-up companies that exhausted their early stage funding in developing their product, only to realize that they did not have the continued resources, talent or time to profitably engage the market.
With a properly defined Business Development function in place, the following benefits can be realized, providing:
a. Operating capital derived from revenue generation (sales).
b. Proof-of-concept validation to enable the acquisition of additional rounds of funding
c. Competition / Partner analysis in early stage can lead to timely, necessary and critical modifications as defined by market demands.
d. First Mover advantage
Business Development activities, matched to the SMB needs, should begin early in the company’s life and be supported and emphasized throughout the growth of the business, as these activities will be key to the success of the venture.
The Marketing Mix - the Solution
The successful movement of the Whole Product through the Product Life Cycle involves the conscious utilization of marketing. In popular usage, "marketing" is the promotion of products, especially as it refers to advertising and branding. However, in professional usage the term has a wider meaning, which recognizes that marketing is Customer centered. MetaMatrix Group feels that marketing, or Customer-centered efforts, should begin at the initiation of Engineering Design and Development. Meeting the needs of groups of customers can be divided into four distinct elements that make up the Marketing Mix. This definition has become so universally recognized that these four elements, the Four P's, have passed into the language.
The Four P's:
• Product: The Product Management and Product Marketing aspects of marketing deal with the specifications of the actual product or service, and how it relates to satisfying the end-user's needs and wants.
• Pricing: This refers to the process of setting a price for a product, including discounts. The price need not be monetary - it can simply be what is exchanged for the product or service, e.g. time, or attention.
• Promotion: This includes advertising, sales promotion, publicity, and personal selling, and refers to the various methods of promoting the product, brand, or company.
• Placement / Distribution: This element refers to how the product gets to the customer - direct, point of sale placement or retailing. This fourth P has also sometimes been called Place, referring to the channel by which a product or service is sold (e.g. online vs. retail), which geographic region or industry, to which segment (young adults, families, business people), etc.
The four P's marketing model can be utilized for all product introduction initiatives. Mainstream consumer products, Industrial products, services, high - value consumer products and channel relationships all benefit from following this format.
As well as the standard four P's(Product, Pricing, Promotion and Place), MetaMatrix Groupe feels that Services Marketing calls upon an extra three Ps, totaling seven and known together as the “extended marketing mix.” These are:
• People: Any person coming into contact with customers can have an impact on overall satisfaction. Whether as part of a supporting service, such as installation of a product or being involved in a total service, people are particularly important because, in the customer's eyes, they are generally inseparable from the total service. As a result of this, the employees must be appropriately trained, well motivated and have the correct demeanor for successful customer interaction. Fellow customers are also sometimes referred to under "people", as they too, can affect the new customer's decisions (e.g., referrals, testimonials).
• Process: This involves the actual providing of a product or service to the Customer. Professional sales processes and the behavior of employees can be crucial to customer satisfaction. The sales process and how it is deployed can enhance the customers’ experience and satisfaction - or totally destroy the sales effort.
• Physical Evidence: Unlike a product, a service cannot be experienced before it is delivered, which makes it intangible. Therefore, potential customers could perceive greater risk when deciding whether or not to use a service. To reduce the feeling of risk and improve the chance for success, it is often vital to offer potential customers the chance to see what a service would be like. Providing physical evidence, such as case studies or testimonials, can remove doubt from the prospects’ minds.