I am always surprised when I attend various industry networking events how many people ask me when I tell them what I do, So what do you do in business development? And these are people generally in the technology or Internet space which is where I do most of my networking. This lack of understanding of business development is usually much worse in more general circles. I’m not sure why.

One explanation is that, in general, the hard work involved in actually generating revenue in a company is not considered glamorous or interesting. People look to the brilliance of the product team or the stellar financial track record of the CEO or executive team as the primary reasons for a company’s success. It’s only if the numbers fall short that people question the ability of the company to generate revenue. I often think of the famous qu0te form the play and movie, “The Odd Couple” when Oscar offers the explanation of where gravy comes from, “It comes when you cook the meat!” Many people believe that if you have a great executive team and a great product or service, that revenue comes just by opening the door for business.

Not true! In order to generate revenue on a sustainable and reliable basis, a company must have an effective business development team and strategy.

Another explanation is that business development is considered by many to be just a more polite word to describe sales. And, after all, no one wants to admit that they are in sales!

While sales is a large part of business development, to assume that sales fully describes the roile generally misses an essential part of the business development role which is strategic in nature. Forming partnerships and alliances and developing business with clients that are strategically significant is generally not a sales function. By strategically significant, I mean customers who not only generate revenue t0day but continue to generate expanding revenue in the future. In financial services, for example, closing business at a highly respected, bell weather institution such as Goldman Sachs is strategically significant because it will make closing business at other financial institutions much easier because Goldman Sachs is considered a leader in the industry.

In my view, business development is a holistic function that incorporates skills and tactics form several disciplines across an organization. In a small entrepreneurial environment, business development responsibilities must be shared across every facet of the organization, first, as a necessity of survival, and then, subsequently, for growth. Engineers must design products that the market actually want instead of what they consider to be cool. Receptionists should be considered to be in charge of first impressions and have an essential role in the attracting new business rather than just answering the phones. Human resources manger should be hiring people that help make the company grow not just because they are perfect for the role. The legal and accountant teams need to execute their responsibilities so that business growth is encouraged rather than stifled. Business development is then everyone’s responsibility and job. Without this realization, revenue will be sporadic and difficult to forecast and generally fall below expectations.

I thought I would look up a Wikipedia(tm) definition of Business Development and then compare that to my own.

I think this version is pretty good except it doesn’t really talk about actually generating revenue. Business development includes all of the functions mentioned in the Wikipedia(tm) entry except that it also always includes actually generating revenue based on the strategies and partnerships that have been created. In a start-up, this revenue should represent foundation clients and/or customers upon which future revenue growth can be built. In a larger organization, this revenue creation should be in new markets or represent a significant demonstration of the company’s value proposition against the competition.

But, at the end of the day, the success of business development is measured in revenue growth. And, if done correctly, revenue growth over a sustained time frame.