Small businesses face a new competitive environment and must guard against missteps that suffocate business development.
A significant transition is taking place with small business. There are new rules, fewer opportunities and more competition. Future prospects aren’t any better unless companies are willing to make changes in their business development methodology to grow revenue. Small businesses need to pursue new and larger opportunities but lack the business development skills to guide them from opportunity identification to capture.
Here are seven deadly sins of business development to which small businesses often fall prey.
1. Lack of executable business development plans. Vulnerable companies use their initial business plan to reach existing levels of revenue but never plan well for the next phase of growth. To survive, a small-business leader must build a proactive business development organization with operational and tactical growth plans that are actionable and realistic.
2. Inconsistent customer engagement models. Most small businesses begin using the seller organic growth model and are only able to increase revenue by working longer hours. Few companies move directly to a consultative business approach favored by customers. Lacking their own plans and processes to make this change, companies are constantly in a reactive mode, responding to whatever their customers’ plans and processes might be.
3. Inadequate business development process. Most business development teams for small businesses do not know how to effectively call on customers. Without an efficient opportunity identification and qualification process, they can’t make those decisions early on. The tendency is to cling to opportunities and submit hail-mary proposals, even when the business is not positioned well.
4. Unable to identify, recruit and hire quality business development staff. Small businesses either possess good business development personnel or they don’t. If they believe they have the talent or have identified individuals with potential, the tendency is to meld these folks into a business development team with no idea whether the team will make the numbers. Selecting a business development staff is a difficult proposition, particularly for those outside the field. If sourcing business development talent from outside, a small business might encounter more problems. Without assessment experience, hiring managers discover their selected hires prove their faking-it factor is much greater than their business development ability.
5. Poor business development leadership. In small business, the strategic business development leader is often the owner or president of an organization that might also include a tactical business development manager. However, the worst mistakes result when the best individual is promoted to manager, and he neither possesses the skills nor experience to perform in this role. This person prefers to be out working on the next deal not trying to herd cats on the business development team. The net result is the loss of your best business development person, a frustrated manager and an ineffective organization.
6. Lack of understanding of their customers' buying process. Many small-business development teams do not fully understand how and why customers buy. They neither know who the decision-makers are nor when a decision will be made. Not understanding the process leaves you at a disadvantage against competitors who engage the customer early, develop relationships, obtain valuable input and affect requirements.
7. Incomplete knowledge of customer needs. What drives the client to choose your small business over others? Not knowing the answer is possibly the gravest sin. Trivializing client problems without asking questions and listening is where most small businesses fail miserably. Without a relevant dialogue to really understand client issues before presenting capabilities or solutions limits the effectiveness of your business-development organization and positions your team along with everyone else's.
If you discover that any of these seven deadly sins sound familiar, find a resource you can trust to fill the gaps. Growth is not a given in the current business climate. Whatever got you where you are now might not get you where you need to go.