In today’s market conditions, a company can stay afloat only if it constantly develops its business and strives for self-improvement. In this article you will learn:
- How to develop your business from scratch.
- What options exist for the development of business.
- How to develop an effective strategy.
- What mistakes should not be made?
- How to get public funding for your business.
Financial prosperity the company can achieve only if it has a plan for business development. Financial success will be determined by the company’s ability to answer the question: what level of business development and profit growth is expected in the foreseeable future (for example, in a year or six months).
Finding an idea for your business is probably the most difficult part of business activity. Only after thorough market research has been done, can you begin to work on organizing the process itself. A brand new idea should be found for the business that no one has worked with before you. In this case, the chances of successful business development increase many times over. There is another option: to engage in the development and improvement of an existing product. For example, you can start selling something at lower prices than your competitors or try to improve the quality characteristics of the product. When choosing business ideas, you should ask yourself: Do I have any knowledge and skills that could be useful in creating a business? Do I know of any undeveloped market niches where there is very little competition? Do I have large-scale ideas at the level of solving the problems of the government or large representatives of business?
Next, you need to develop a business development plan, the content of which may correspond to the following points:
- design (an abstract idea turns into a specific product);
- creation of a test version, the development of a layout;
- protection of rights, if necessary patenting the idea or development;
- questions of the organizational plan: the number of employees in the state, the location of production facilities, warehouse space, etc.
- marketing strategy of how to develop business, how to sell the product or service.
Once a business development plan has been created, you should move on to deciding on the sources of funding for your business. Depending on the direction and goals of the business, there are several financing options:
- government sources,
- innovation and venture capital funds,
- large enterprises,
- special organizations that support startup projects and facilitate the development of new businesses.
It is also possible to take out a business development loan or to pledge any valuables as collateral. In order for the organization or foundation to understand what they are investing in and what the prospects are for your project, they must be familiarized with the business plan. The plan should reflect the following aspects:
- marketing strategy;
- the items of expenditure on which it is planned to use the investment or loan funds;
- justification of the financial benefits of the investor or lender;
- at what expense the loan taken will be covered.
A self-compiled business development plan must be professionally evaluated. Here you should think through in advance how to protect yourself from the possible plagiarism of your idea. Next, you need to test the market and test your idea. To do this, you can release a test version of the product or survey the target audience. These steps are necessary to identify what the requirements for the product may be to determine the timing of implementation and to foresee possible problems.
The next step is the formation of the staff. You should be personally responsible for this process. There must be a clear testing system, questionnaires, and a plan for interviewing applicants. If necessary, suitable specialists should receive additional training or appropriate courses. Once the employees have begun to perform their job duties, you should carefully control the quality of their work. Regular reports on the work done during the week can be introduced.
Now let´s proceed to the advertising campaign. First of all, it is necessary to take care about the presence in a wide information field. Information about the company should appear on various Internet resources and in various media. Your main goal at this stage: in every possible way to promote your brand and stimulate business development. The Internet space should cover both social networks and sites with free ads. When cooperating with advertising agencies, do not invest all your money at once. To begin with, test the effectiveness of one advertising campaign. Do not forget to create a system of motivation for customers. For example, one way to attract customers could be a free delivery service. You can also think of a system of discounts, set special prices, depending on the number of purchased goods. The main task is to create a wide circle of regular customers.
Business Development: 3 Possible Options
Option 1. Increasing Volumes
Increasing volumes is a proven and most optimal method of business promotion and development. It consists of:
- the development of a network of outlets,
- production of a wide range of products,
- optimization and expansion of services, etc.
The advantage of this method is that it does not require searching for new specialists or partners. The company interacts with already proven professionals who meet its requirements and demands. However, as the company grows in volume, it will still have to deal with additional costs. In addition, engaging in business expansion and volume building is beneficial because your company already has a stable position in a particular market segment. At the same time, you minimize the risk of losing your own funds and investments. The controversial point of this method is that the company does not go beyond its segment in the market, which can be called a rather unidirectional investment. On the other hand, this can be seen as an advantage, as narrow profile specialists are always highly valued.
Option 2. Enlarge The Company
A market economy always implies competition. This phenomenon stimulates intensive business development to strive for constant improvement of goods quality and services provision level. In order to control the behavior of large market players, there are anti-monopoly laws. Laws that prevent monopolization are in the interest of the state. They prevent the monopolist from taking over the whole market.
Nowadays the theory of competitiveness is still important and relevant for market development. But it is usually viewed from a somewhat different angle than before. Earlier the actions of the company aimed at monopolizing the market were assessed negatively due to their possible unlimited power over prices. Today, completely different factors play an important role. High prices are not always in the interest of the monopoly itself. Owners realize that raising prices attracts new competitors into the market segment which may shake the market position of the monopoly company itself.
It is more reasonable to prevent competition by not raising the price level above the level affordable to the mass consumer. Thus, modern companies are much more profitable to carry out business development through the strengthening of their position thanks to the cooperation with other companies. For example, one of the options for the beneficial merger of several companies may be the creation of a joint-stock company. The company has a common capital and blocks of shares of a certain value. Each participating company becomes the owner of a block of shares and ceases to be an independent legal entity.
Option 3. Investing
A common mistake made by many businessmen is to invest large sums of money in one type of business, the production of uniform products or services. Such entrepreneurs do not take into account the risks associated with changes in market conditions. Risks increase when an entrepreneur invests outside funds rather than his or her own personal savings. Demand is a fickle phenomenon, while the responsibility to creditors remains. The world business practice has developed a way of business development, which helps to avoid such dangers. This method consists of the diversification of capital. For example, consider businesses that specialize in the production of meat products. A profitable investment for them could be an investment in the fish business. Real estate companies can invest in a business related to construction or repair services. Businesses operating in the field of mobile communications can invest their funds additionally in the production of related products.
It is up to the board of directors or shareholders’ meeting to decide where the funds will be invested. An important factor is the competitiveness of the company. It should be taken into consideration that risks of losing capital are much lower when the funds are “spread out” among various market segments. In the normal functioning of the market, there is a small probability that there will be a decrease in demand in all market segments at the same time. If there is a decline in demand in one market sector, however, investors have an emergency opportunity to redirect money from one segment to another. Due to the diversification of capital the company has more chances to stay afloat in a difficult market situation.
How to Build a Business Development Strategy
One of the most well-known and actively used models for planning a company’s activities is the basic, or benchmark, business development strategy. For almost all entrepreneurs the most important thing is business development, which takes place purposefully and continuously. A wisely chosen strategy can help the company to reach a new level in its development. It is possible to distinguish nine basic elements on which strategic planning of the company’s activity is based. These elements stimulate the strategic development of business and bring the company closer to the realization of its potential.
These elements include:
- the mission of the business:
- a set of values that define the foundations of the successful functioning of the company (main objectives and ways to achieve them);
- structural and organizational features of the company:
- division of the company into departments
- clear delimitation of job responsibilities (performed works);
- advantages over competitors of technical, intellectual, or financial nature;
- products that meet consumer demand and through which the company strengthens its position
Bio: Rebecca Carter works at UKessays as a content writer. She has a Bachelor’s Degree in Business Administration and during her study developed an enthusiasm for writing about the latest trends in digital marketing and the business world. When she is not writing Rebecca enjoys being in the mountains and volunteering.