Career Overview: Business Development
Business development is a combination of strategic analysis, marketing, and sales. Business development (or "biz dev") professionals can be involved in everything from the development of their employers' products and services, to the creation of marketing strategies, to the generation of sales leads, to negotiating and closing deals.
The job of the business development professional is typically to identify new business opportunities-whether that means new markets, new partnerships with other businesses, new ways to reach existing markets, or new product or service offerings to better meet the needs of existing markets-and then to go out and exploit those opportunities to bring in more revenue.
Since the field is a cousin of marketing and sales, even when an organization doesn't have a stand-alone business development department or employees with the phrase "biz dev" in their job titles, you can bet that folks in sales and/or marketing are handling business development responsibilities. You can find biz dev jobs in all industries-at everything from tech startups to huge pharmaceutical companies. What the work entails, exactly, depends on how big a company is and what industry it's in.
What You'll Do
Your job in business development may involve any or all of the following:
The first aspect of the business development professional's job is typically to identify new business opportunities.
This means several things, in terms of what you'll do. First, you'll need to stay abreast of what's happening in your industry-what your competitors are up to in terms of products and service offerings, pricing, marketing strategies, and so on. Second, you'll need to make sure you understand what your company is up to on an ongoing basis-to understand your company's strategy, how your company compares to its competitors, and how it's perceived in the marketplace. Third, you'll need to understand the market for your company's offerings-who comprises it, and how it may be changing.
Next, as a business development professional, you'll need to think creatively about everything you know about your company. This is the part of the job in which you identify possible ways to improve your company's sales, which can mean identifying anything from new market segments (or individual potential clients), to new sales channels to sell through, to other, related products or services in the marketplace with which your company's products or services can be combined into synergistic, "co-branded" offerings.
The next part of the job is prioritizing the new business opportunities you've identified. To do this, you'll need to compare the potential returns of each new opportunity to the costs your company would incur to exploit it. Which means spreadsheets-lots of spreadsheets.
Finally, you have to bring the new opportunities you've identified and prioritized to fruition. In other words, you'll be negotiating with those at other organizations who can help you take advantage of the opportunities you've identified. And, if you're good at what you do, you'll be closing deals with those other organizations to increase your company's bottom line.
One thing you'd probably be doing as part of a biz dev career at an enterprise software company, for instance, is identifying and signing partnership deals with IT consulting firms that implement enterprise software for their clients-deals that will give those firms you partner with a cut of your company's revenue from any new sales of your software that they can bring in. Or, say you're in biz dev at a big publishing company that's looking to deliver a new, younger market to its advertisers; in this case, you might be involved in acquiring a smaller publisher that already has expertise in marketing to a younger audience, as well as established distribution channels for getting products to that market.
Business development involves varying degrees of sales and strategy. In some companies, biz dev people may focus on getting new corporate sales accounts, while in others they may lead new product development. At larger companies such as Oracle, Cisco, or Microsoft, one of biz dev's many responsibilities may be to decide which smaller companies the company should acquire next to ensure that it retains its market strength in the future.
Working in business development is an excellent way to become adept at business strategy while gaining hands-on experience in negotiating deals and managing partner relationships. Business development jobs are also highly cross-functional, requiring close collaboration with various internal and partner-company teams such as sales, engineering, and marketing to ensure that a deal is consummated. With its focus on strategy, biz dev steers the direction of a company-the deals forged today determine what the rest of the company will be working on tomorrow.
Who Does Well
You'll need strong business acumen to do well in a business development career. To understand the competitive landscape, you'll need strong research skills. To analyze new business opportunities to pursue, you'll need excellent quantitative and analytical skills. To negotiate with other companies you might potentially do business with, you'll need excellent people and communication skills. And, of course, to close deals, you'll need the killer deal-closing instincts possessed by the best sales types.
If you're interested in business but don't want to go the traditional route of working for a consulting or investment banking firm or getting an MBA, biz dev may be a good alternative. The best way to get into business development is by first gaining experience in finance or corporate sales.
The minimum degree requirement for an entry-level position in business development is a BA or BS. For more senior positions, an MBA is often preferred, along with five or more years of previous business development or sales experience.
Business development positions at high-tech companies may require a technical background, or sales experience in a related field. Strategic-planning or corporate-development positions usually require a minimum of two years' experience in investment banking or consulting.
Networking with friends or alumni will give you an advantage getting your foot in the door. If you're asked in for an interview, be ready to demonstrate your knowledge of the company's business and show that you're familiar with its competitive landscape. Be sure to play up any experience you have in closing deals or managing relationships. And remember that recruiters will be seeking a keen eye for detail, solid communication skills, and analytical ability.Job Outlook
In the long term, business development opportunities should grow, especially in expanding industries such as pharmaceuticals & biotech and technology. The growth in business development careers is being driven by a variety of factors. For one thing, businesses are doing more and more on the Web, meaning there are more and more opportunities for alliances, partnerships, and other business activities between and among companies doing business on the Web, Internet companies, and Internet services companies. At the same time, there's a growing need for biz dev types to seek out and close business deals in new markets. And as companies increasingly strip themselves down to only their core components, they rely on business development to do the deals that allow them to outsource non-core business functions.
Recently, job seekers looking for biz dev positions have found themselves in an extremely tight market. But as the economy improves, we're already seeing growth in biz dev career opportunities.
Those with an aptitude for landing and structuring deals-lawyers, for instance, or investment bankers-have the best shot at landing plum business development jobs.Career Tracks
In order of increasing sophistication, the three overlapping layers within business development are sales, partnerships, and strategic planning. Most biz dev jobs blend all three, although one area may be emphasized.
At some companies, business development might be better described as business-to-business sales. In many cases, the business development team and the sales team are one and the same.
Cold-calling or prospecting for potential clients, members, or partners is often a task that falls to entry-level biz dev employees. These employees often have to hone their own sales pitch to convince other companies that a partnership would add value to their businesses.
As in traditional sales jobs, there's often an account-management aspect to business development-coordinating a variety of partner relationships and deal types, each at a different stage.
Companies of all sizes in all industries are building their businesses around partnerships-and it is business development's responsibility to initiate and manage such relationships.
Often the biggest challenge facing business developers is negotiating the terms of partnership deals. Getting another company interested in a partnership is just the beginning-drafting a contract and negotiating its terms is a process that can drag on for months.
Once both parties sign the contract, business development must work with other teams in a company (e.g., product management, marketing, and operations) to oversee the successful meeting of the terms of the partnership.
Some business development jobs aren't called that at all. Instead, they're called "strategic planning" or sometimes "corporate development." Strategic planning jobs are found mostly at large, established companies seeking to expand and diversify their business. Just like management consultants, strategic planners spend a lot of time thinking about top-level strategy issues such as what new business activities their company should pursue, how it should position itself and market those activities, and which technologies it should invest in.
At some companies, strategic planning may be carried out by the corporate finance department. In such cases, biz dev jobs may resemble investment banking functions such as mergers and acquisitions. For instance, if a company wants to acquire a new business unit, strategic planning may analyze the market to find a suitable business to acquire, determine an appropriate asking price for the company, and follow through with the negotiation process.
If the acquisition takes place, strategic planning may help integrate the two companies. This task may be as simple as processing a stack of paperwork or as complex as relocating and reorganizing the activities and personnel of the two companies.
Strategic planning may also involve institutional investment-that is, parceling out the company's money to fund outside startups. In this way, strategic planning can be a bit like working in the venture capital industry. For instance, when high-tech companies invest in high-tech startups, strategic planners may perform due diligence on potential partners, determine how much to invest in a particular venture, and negotiate a stake in a company.