Readiness, Reach, Revenue—A Business Development Framework

My basic assumption about the business development role in a company is that it should be about developing the business. It’s not sales. Sales is about developing and working a pipeline, getting contracts signed, and invoicing customers for product/service. This is extremely valuable to a business, but business development is a different endeavor.

I believe that business development should be framed by reach, readiness and revenue.

Reach: If you want to develop a business, you need customers, so how can you reach them? If they’re on another continent or in another market where the business doesn’t operate today—or maybe a market where you can’t get to scale without some help—can you get there with an alliance, JV or other structured agreement? Business development is about reaching a market full of good customers, which entails a smart, thorough evaluation of the market and the opportunity associated with entering it.

Readiness: Are you ready to deliver great customer experiences? What resources do you need to be sure you deliver on your brand promise? Business development should drive the readiness of the company, which likely means collaboratively working across the organization so that the business can systematically drive happy customer outcomes in the market you’ve just reached. Businesses that have started with a direct sales approach often have capacity that could be used to support a new partner-oriented way of doing business, so you need to find that capacity and put it to good use. For example, does your co-lo facilities have CPUs and bandwidth that go unused during the night? Can they be put to use during that time? What about the people on the tech support team or trainers? And, as an aside, part of this process (earlier in the process) is also evaluating whether the business is ready to enter a market at all, or based on readiness, how else you may enter the market.

Revenue: Developing a business is also about attracting good talent and paying them. So any BD process—from early exploration and diligence until contract negotiation and ultimately partner enablement—has to produce revenue so good talented people can get paid for their hard work. Strategic alliances, OK, maybe they’re sometimes needed. But I’m not sure that’s business development. All the effort and investment of developing a business should result in predictable, significant, good-margin revenue.

Reach, readiness, revenue… that’s it.