1. What does business development entail?
In its simplest terms, Business Development is creating partnerships that increase revenue for both businesses. When thinking about how business development can help your small business, ask these two questions:
- What businesses service the same customer base I do without being a direct competitor?
- How can we work together to better serve our customers while driving more revenue for both parties?
Creating all the partnerships...🤝
2. How does POWr leverage Business Development?
Like most businesses, POWr sells plugins directly to customers. But you can also find our plugins on site builders like BigCommerce, Shopify, Weebly, Wix and several others. Business Development’s role is to source new businesses who service the same customer base and establish a partnership that benefits both parties.
This feels like a mutually beneficial partnership 👩💼👨💼
3. Can you provide an example for SMBs?
There’s a very popular sushi restaurant in my neighborhood in San Francisco. People from all over the city come to this restaurant, and there’s a line out the door almost every evening. This causes the wait time for a table to quickly jump from minutes to hours.
Less than a block away, there’s a neighborhood bar, where the sushi restaurant often recommends that customer wait for their tables. On the surface, this is a good relationship for both businesses, but could it be better? Both businesses should be asking themselves how they could improve their relationship, increase revenue and drive an increase in customer satisfaction.
- What if the sushi restaurant and bar worked out a discount for guests while they wait?
- What if the bar started to carry a couple of Japanese beers or sake to compliment the upcoming meal of the shared customers?
- What if the sushi restaurant provided a simple appetizer, like edamame, for their guests waiting at the bar?
- What if the bar paid a referral fee for every customer the sushi restaurant sent them?
- What if the sushi restaurant paid a referral fee every customer the bar sent them?
- What if the sushi restaurant regularly called the bar to update patrons on their wait time?
All of these are simple ways the bar and sushi restaurant could partner to better serve their customers, anticipate their needs, and drive more revenue for both businesses.
Mmm. Sushi. 🍣
4. What should be the goal of a SMB’s business development efforts?
You should consider the following goals in any Business Development partnership:
- Partnerships should drive customers and revenue in both directions.
- Both businesses should be anticipating your shared customers’ needs and providing a solution.
- Any relationship that isn’t providing increased customer satisfaction for both businesses is a bad deal.
Revenue - check! Customer needs met - check! Satisfied customers- double check! ✅
5. For SMBs just starting out, networking and building vital business relationships may seem overwhelming. How do you suggest they go about developing their network and fostering important relationships with potential clients and investors?
Start with one idea, one deal. Focus on a complimentary business where your products or services can benefit your common customers.
Find the key decision maker and set-up time to speak. The phone is an okay place to start, but nothing replaces face-to-face meetings when it comes to establishing trust and encouraging honest and open communication.
Come prepared with a couple of well thought out ideas on how you can work together to drive more sales for both parties. It’s best if you have some real-life examples to illustrate your point.
Brianstorm on some new ideas. Your potential partner has experiences that will benefit your relationship.
Settle on a strategy you both like and create a test with clear goals you both agree on. “I do this, you do that, and if we achieve a revenue of X then we will do it again. If we do not, let’s see what went wrong or what we can change and try it again.”
You know, just networking like a boss 😎
6. What are the pitfalls a SMB should be aware of when forming these partnerships?
There are two risks most often associated with Business Development:
- A failed partnership means lost time, which is lost revenue. For this reason it is smart for any business development efforts to be well thought out, cross-examined and challenged. Play devil’s advocate with yourself and your ideas. Set clear, quantifiable goals with your partner, and schedule regular check-ins to share how you both are doing.
- Partnering with the wrong business can damage your brand. Do your homework on your potential partners. Look for customer reviews and references. Schedule meetings in-person when possible. Finally, use your head and trust your gut.
Unfortunately, there’s no guarantee against failure, but these suggestions will help increase your chances for success.
Maybe that partnership isn’t a great idea after all 🤔
7. Why is business development important for SMBs?
The right partnerships can have a compounding effect on your business. With a little work, you’re being exposed to customers who are interested in complementary products or services. They are already in the purchasing mindset, and a trusted business has referred them to you. Successful partnerships reduce marketing costs and deliver customers ready to purchase right to your doorstep.
Now I understand! 🙌
8. It’s often said that we learn more from our mistakes than our successes, have you found this to be accurate of your own experience in business development? Can you share an example?
The most important lesson I’ve learned is that the best business development deals almost always involve an equal investment by both sides. Any deal that is overly onerous to one partner or requires significantly more work by one side, will almost alway fail. Make sure you and your partner both have skin in the game.
Now this is not always possible. I’ve made deals as the smaller partner approaching a larger one where we took on the vast majority of the work just to gain the partnership with the larger business. By by doing this, we took on most of the risk. We were highly motivated to make the partnership work, but the larger business was not and ultimately the deal failed.
One way around this type of disparity is to establish a minimum commitment. Structure your partnership in a way that you as the smaller company gets to keep all of the revenue until your costs are covered. Once you’ve reached that point then the revenue will be shared by both partners.
Learning lessons. Taking notes. NOT playing solitaire. 😬
9. What’s the best advice you’ve received regarding business development?
A former manager that I still look up to once told me, “The deals we did yesterday, we wouldn’t do today. The deals we do today, we won’t do tomorrow.”
This applies to several aspects of your business, but I’ll focus on two.
- The first is, as your business grows, your needs will change and so will the partnerships you pursue. This can be due to the size of your business, a changing customer base, new products, changes to your industry, and other factors.
- The second is, as you learn, the business development deals you choose and develop will only get better. Experience is the master teacher in partnerships as it is in every other aspect of business and life.
Can’t wait to utilize all this great advice! 😃
10. What encouragement or advice would you like to offer SMBs?
Start small and stay focussed on a couple of easy wins. Nurture and grow them, learning from any mistakes you make along the way. Once you have a win or two under your belt, build a structure or format to your deals that you can replicate and use for various partnerships. Finally, build a pipeline of new opportunities, and prioritize them based on which appear to have the highest potential revenue.
Business Development is not unlike sales in that it is a numbers game. You won’t close every deal, so you need to keep your options open and a large list of opportunities ahead.
Nurturing my successes and watching them grow 🤗
Kemp Mullaney manages Business Developement at POWr. He has over 18 years of experience in software and has dedicated the last 6 years to small business services. When he’s not in the office, you’ll often find Kemp camping under the Redwoods or sailing on the Bay.