Author:
Lou Sokolovskiy
Founder/CEO, Opus Connect
lou@opusconnect.com

 

Mastering the Art of Business Development Blog Series 
Article One: Business Development in a Nutshell

Welcome to Mastering the Art of Business Development, a series of articles based on my personal experience coaching friends and colleagues on business development strategy. My name is Lou Sokolovskiy and I am the Founder and CEO of Opus Connect and a business development professional with 20 years of experience. Opus Connect is a professional organization for M&A executives. We produce over a hundred M&A industry-focused events worldwide each year in order to facilitate deeper and more meaningful relationships among our members and prospects.

Everyone has heard of business development. Some of us practice it on a daily basis, while others shy away from it for a variety of reasons. Wherever you are on this spectrum, this series of articles will help you improve your skills and take your career and your life to the next level. In the coming months, we will explore tips and tools as well as create a personal strategy or plan that maximizes your potential.

I’d like to start out with a basic concept – the definition of business development. “Business development” is a loaded term in today’s day and age, and can mean different things depending on who you ask. Ask ten “VPs of Business Development” or similarly business card-ed folks what it is, and you’re likely to get just as many answers.  “Business development is sales,” some will say, concisely.  “Business development is networking,” others will say, vaguely.  “Business development is hustling,” the startup folks will say, evasively.[1]

To me, business development is much more than just sales or networking. Sales generally has a very narrow focus on the end-goal of getting customers to purchase a widget or service. It is transactional in nature and is essentially a one-way street, although in some cases, salespeople will try to create and/or maintain a good relationship so they can sell more widgets/services in the future. In contrast to sales, business development is a two-way street in which one builds relationship channels leading to mutually beneficial relationships with people who you can also do business with. Under this framework, closing a deal or making a sale is a byproduct, not the primary focus.

Another common misconception of business development is that it is equivalent to networking. Networking is a helpful tool to feed your funnel and spark new connections by doing activities, going to events and meeting people. Networking is an essential part of business development when you are starting out and need to build a solid base, but after years of doing it you may even reach a point where you truly no longer need to develop new contacts. Thus, networking is a possible component of business development but it is really just the tip of the iceberg. There are many other tools that make up business development.

My personal definition of business development is: The creation of long-term value by establishing and maintaining mutually beneficial relationships.

The best way to understand this definition is through a real-life example. Joe is an Opus Connect Advisory Board Member who is consistently involved in our activities and events. Joe is in charge of business development in a middle market investment bank, and one of his goals is to engage clients for valuations. His target market is private equity firms, business owners and executives, and other M&A professionals. His role as an Advisory Board member at Opus Connect is a tool he uses to create a relevant value-add for his audience. A value-add is something that helps a person or organization pursue or improve their goals. For example, a lawyer who sends a referral to an accountant would be adding value to the accountant’s network, or offering him a “brownie”, as I like to say.

Returning to our example of Joe, let’s say that Joe picks up the phone to call Tom, a director of a private equity firm, to pitch him valuation services. Unless Tom needs those services at that moment and does not already have someone in mind for the job, he might not be inclined to engage with Joe at that time. On the other hand, if Joe calls Tom to offer him an opportunity to speak at an Opus Connect event, or to attend an event where he can learn something or meet new potential partners, Joe is adding value to Tom’s business. Tom will probably be much more interested in taking Joe’s call, and also will likely develop a sense of gratitude for Joe’s assistance. This ultimately has the potential to translate into a business transaction and/or referral.

Additionally, because Joe dedicates time and energy into helping Opus Connect, he has also established a long-term, now mutually beneficial relationship with me. I am always eager to help Joe out by making introductions, highlighting him at Opus Connect events, or setting up business dinners with valued contacts. Joe is creating long-term value (i.e. potential future revenue from clients, success and prestige for his firm, possibility of promotion or additional income) by offering relevant business opportunities to his network while simultaneously building and maintaining a variety of relationships.

So there you have it, business development in a nutshell. Next time, I will dive more deeply into the ways that business development can benefit your business and your lifestyle, such as increasing your income and advancing your career.

[1] What, Exactly, Is Business Development?, Scott Pollack, Forbes Online, March 21, 2012.