More and more often today, Business Development and Sales are terms that are used interchangeably. However, there is an important distinction between the two. “There is a fundamental difference between business development and sales and it is called leverage and value generation,” says Joe Mayer, co-founder and managing partner of Mayer Business Group, an executive coaching and business consulting group in Solon. “Sales is an activity focused almost exclusively on driving revenue; business development is more strategic, big picture thinking such as developing a new channel or partner strategy.”
In general, business development will identify strategies that create leverage for growth by enhancing the product and service line-up and sales strategies. “Unlike larger companies that undergo strategic planning initiatives to develop a few key goals for the year, smaller businesses don’t have a GPS system that tells them where to go,” says Mayer. “When an opportunity arises, they jump on it no matter if it leads them in the right direction for growth. By responding daily to the immediate opportunities in front of them, small businesses can have 365 different goals a year. They can quickly lose sight of the big picture, and that’s where a business development plan can make a huge impact,” says Mayer.
Mayer recommends taking a step back and creating a plan on how you want to develop your business as well as setting concrete quarterly or yearly sales goals to ensure and measure progress. “The strategic planning process will help you identify what products to sell and who to sell them to,” says Mayer. “Selling really starts with knowing where value is created. Ask yourself, ‘What can I do to find more of those people in that market niche which creates value by buying high-margin products or services from my company?’ The last thing you want to do is sell more of a product that doesn’t create sufficient margins.”
“The biggest mistake by far that I see business owners make is not knowing their numbers. Nine out of 10 owners, if asked, cannot tell you what their profit margins are on their products or which of their customers creates value for them. If you don’t know these numbers you are basing your strategy and sales goals on faulty information and you are making decisions in the dark,” says Mayer.
Joe Mayer is one of COSE's experts. Learn more at www.cose.org/expertnetwork
This article originally appeared in the June 15, 2015, edition of Small Business Matters.