Development of a small business
Development is an interesting word particularly in relation to business. What exactly do you do in terms of your Business Development? Is it focused on increasing sales or is it mainly externally driven concentrating on customers, markets, competition and products / services. Or, are you looking more inwardly, and seeking to improve the processes, systems, procedures, documentation and skills of your organisation.
Both functions are incredibly important but deliver a different type of value. The first is about increasing turnover, the second is about reducing costs and increasing productivity. This is a very simplistic view and there are many other related factors that also impact on the success or otherwise of a business, but I’d say generally that’s it.
If you have such roles in your business (or something similar) that’s great, and it means that you can measure the impact through performance management of individuals or Key Performance Indicators for the business to ensure you continue to be the best you can be.
I must admit I do talk about development quite a lot in my role as Head of Business Support at and in my previous roles at Winning Pitch and Business Link. It’s important to understand the aspirations and ambitions of the owners of small businesses in order that you can help them. One of the key questions is “In what ways are you looking to develop your business?” That gives you an excellent insight into their objectives and what they see are the main areas to focus on.
In fact, that’s usually a summing up question I ask at the end of all my first meetings – “What are your top 4 priorities right now?”. The answers to that question really do help you to understand where the decision makers really want to take the business.
Nine times out of ten, the word “growth” will appear. The vast majority of businesses in Lancashire do want to grow. So for the purposes of this article let’s assume that development equals growth, or at least growth is driven by the need for business development and vice versa.
In order to better understand your growth potential, including identifying barriers and opportunities, it’s worth noting where you are on the 7 stages of a business (development) life cycle. It goes like this:
Seed – Your business is just a thought or an idea, but an opportunity has been spotted and you want to use your skills, knowledge expertise and interest to start a business. You’ve done some research and you think people will buy from you. And, you want to be your own boss!
Start Up – The business is born, it’s an entity and you have products and / or services and some customers. You’ve probably underestimated how much money you need and the demand for what you offer isn’t what you thought it would be. You are trying to establish your brand and reputation whilst balancing the books and doing everything else.
Growth – The business is now recognised, trade is increasing, new opportunities are arising but there could be more competition. You are increasing your team and now managing people and need to develop leadership skills, the business runs more formally as you have developed effective processes.
Established – The business is thriving, customers and suppliers are loyal, sales are growing and you are still recruiting more staff. You need to stay focused on the bigger picture (your mission) as it’s easy to get complacent with customers and the competition.
Mature – Sales and profits are only stable but competition is fierce, new products and services may be needed as there are critical decisions to be made on the future of the business. What got you to this position may not keep you there and you need to re-evaluate how the business is run. You are looking for new opportunities.
Exit – You are now looking at ways to cash in on the years of effort, hard work and sacrifices. You want the best possible deal for you and your stakeholders and are now weighing up the options. Note- that an effective exit plan should begin at least 2 years before the due date. There will be a lot to do.
Knowing where you are in terms of the maturity of your business and what may be coming next from a growth perspective, definitely helps the planning process and in understanding the resources you need to ensure success. At whatever stage you are its recommended that you seek external support in the form of a coach, mentor or consultant to help you and your business to grow and to guide you through what can be a tricky (and often) lonely journey.
At nxo we have developed a very effective framework for ensuring that companies are able to develop and grow their business effectively. This incorporates where are you now; both internally and externally; where do you want to be and the plan you need to implement to get you there; and a real focus on mission, vision, values and the culture of the organisation.
At whatever stage of growth you are at, these components are the only real differentiators from your competitors and will ensure that your success is profitable and sustainable. And don’t forget to make sure that everyone within your company is a “Business Development Manager”.
“The sales department isn’t the whole company, but the whole company better be the sales department” – Philip Kotler.