Founder/CEO, Opus Connect
Mastering the Art of Business Development Blog Series
Article Two: Why Is Business Development so Important?
In my last article, I defined the term “business development” and provided some insight into the concept with an example. While the benefits of doing business development may be clear to some, many people ignore or minimize its value. There are two possible explanations for this: (1) They cannot see the present value of doing business development because results are often delayed, and/or (2) they feel that they are not good at business development, it is outside of their comfort zone, and therefore they shy away from it. Regarding the first explanation, while it may be a challenge to see the immediate benefits of doing business development, it is important to understand that there are real, tangible benefits and that business development can greatly impact your life. The goal of this article is to illuminate some of those benefits.
It is no secret that people who work hard and invest their time into a venture generally perform better than those who don’t. Want to get a good grade in school? Study more. Want to make more money or get promoted at your firm? Bill more hours. While there is no doubt that hard work and sweat is a necessary component of success, in many cases business development can help you achieve results sooner and enhance your results significantly.
Here is a list of 8 ways that engaging in business development can amplify your success:
1) Financial Benefit
This is the most obvious benefit. What separates a service partner from a rainmaker at a law firm? The ability to bring in clients which, in turn, generates more revenues for the firm. Business development can also help you directly generate leads that convert into clients for your own business. Whether you are feeding your funnel with new contacts, re-engaging your current clients, or getting referrals from your network, business development can pay off.
2) Better Lifestyle
Eventually, if you have a bigger book of business you can work less hours and hire people under you to service the clients that you bring in. You can also be more selective about the clients you take on, choosing only those that you genuinely enjoy working with and that produce higher margins.
3) Leverage/Last Out
If your company is laying people off and you have your own book of business and/or a significant network, you likely won’t be the first to go. Also, you will be in a good negotiating position because you will be more desirable to other companies and firms.
4) New Employment Options
If you need or want to find another job, having a network makes it much easier. Referrals from people who are familiar with your work ethic and experience can go a long way.
5) New Ventures
Having a network makes it easier to transition into a different career with your skills and academic background. For example, a successful M&A lawyer could become an investment banker, or a successful investment banker could start her own private equity firm.
6) Career Advancement
Employees who are bringing in business are more likely to make partner or get promoted earlier.
7) Serve Current Clients Better
In the last article, I talked about value-add or “brownies”. Business development is a tool to help you provide brownies to your network. For instance, if you have a large network, you can be an excellent resource for your clients by referring them to qualified professionals. An M&A lawyer could assemble an entire team to close a deal. She could get an accountant on board, or other needed experts. Or perhaps she isn’t sure that the transaction should close, but creates value for the client by bringing together experts to help the client consider other strategic options, such as dividend recap instead of a sale.
8) Expand Knowledge Base
If you become more knowledgeable about what other people do and what they need, then you can help them better or connect them to people who can help them. For example, I attended a political conference in which I learned about ethanol production from coal in an optional panel. Later on, I was speaking with a CEO who mentioned ethanol production from coal. I started a discourse with him based on my knowledge I gained at the conference, and he was shocked that I knew anything at all about the subject. Apparently there are a very limited number of people in the United States that have any sort of knowledge about ethanol production from coal. He hired me on the spot to consult him for $500 an hour.
The bottom line is that business development can help you take your goals to the next level. You might be good at what you do and work hard, but in today’s world that simply isn’t enough. Whether you’d like to make more money, get promoted faster, add value to your network, or move to another career entirely, business development is an essential skill. In my next article, we will begin to discuss how you can improve your business development skills with some specific tips.