Business development is the process of identifying, pursuing, and implementing growth opportunities for a business. It can involve expanding into new markets, developing new products or services, forming strategic partnerships, increasing customer loyalty, and improving profitability.
But how do you create a business development plan that can guide your actions and help you achieve your goals? What are the essential components that you need to consider?
In this article, we will explain what a business development plan is, why it is important, and how to create one using a simple framework. We will also provide some tips and examples to help you craft a successful business development strategy for your business.
Key Takeaways
- A business development plan is a document that outlines the objectives, strategies, and tactics for growing a business.
- A business development plan should include the following components: situation analysis, SWOT analysis, goals and objectives, strategies and tactics, budget and timeline, and evaluation and measurement.
- A business development plan should be aligned with the overall vision, mission, and values of the business, as well as the needs and expectations of the target market.
- A business development plan should be flexible and adaptable to changing circumstances and opportunities.
What is a Business Development Plan?
A business development plan is a document that outlines the objectives, strategies, and tactics for growing a business. It is a roadmap that describes how a business will achieve its desired outcomes and overcome its challenges.
A business development plan can be created for different purposes and timeframes. For example, it can be:
- A short-term plan that focuses on specific projects or initiatives for the next 6 to 12 months.
- A long-term plan that covers the overall direction and vision for the next 3 to 5 years.
- A departmental plan that addresses the specific needs and goals of a particular function or unit within the business.
- A personal plan that defines the career aspirations and professional development of an individual employee or leader.
Regardless of the scope and duration of the plan, it should be aligned with the overall vision, mission, and values of the business, as well as the needs and expectations of the target market.
Why is a Business Development Plan Important?
A business development plan is important because it can help a business:
- Clarify its goals and priorities
- Identify its strengths, weaknesses, opportunities, and threats
- Analyze its competitive advantage and market position
- Develop effective strategies and tactics to achieve its goals
- Allocate resources and assign responsibilities
- Monitor progress and measure results
- Adjust to changing circumstances and opportunities
A business development plan can also help a business communicate its value proposition to potential customers, partners, investors, and stakeholders. It can showcase the benefits and solutions that the business offers, as well as its unique selling points and differentiators.
How to Create a Business Development Plan
There is no one-size-fits-all approach to creating a business development plan. However, a common framework that can be used to guide the process is:
- Situation analysis
- SWOT analysis
- Goals and objectives
- Strategies and tactics
- Budget and timeline
- Evaluation and measurement
Let’s look at each component in more detail.
1. Situation Analysis
The first step in creating a business development plan is to conduct a situation analysis. This is an assessment of the current state of the business, its environment, and its market.
The situation analysis should answer questions such as:
- What is the history and background of the business?
- What are the products or services that the business offers?
- Who are the customers or clients that the business serves?
- What are their needs, preferences, pain points, and expectations?
- Who are the competitors or alternatives that the customers or clients can choose from?
- What are their strengths, weaknesses, advantages, and disadvantages?
- What are the trends, opportunities, challenges, and threats that affect the industry or sector that the business operates in?
- What are the legal, regulatory, social, economic, technological, environmental, and political factors that influence the business?
The situation analysis can be done using various methods and tools, such as:
- Market research: This involves collecting and analyzing data from primary sources (such as surveys, interviews, focus groups) or secondary sources (such as reports, statistics, publications) to understand the characteristics, behaviors, and preferences of the target market.
- Competitive analysis: This involves identifying and evaluating the strengths, weaknesses, strategies, and performance of the main competitors or alternatives in the market.
- PESTLE analysis: This involves examining the external factors that affect the business, such as political, economic, social, technological, legal, and environmental factors.
- Porter’s five forces analysis: This involves analyzing the competitive forces that shape the industry or sector that the business operates in, such as rivalry among existing competitors, threat of new entrants, threat of substitute products or services, bargaining power of buyers, and bargaining power of suppliers.
The situation analysis should provide a clear and comprehensive picture of where the business stands, what it does, who it serves, and how it compares to others.
2. SWOT Analysis
The second step in creating a business development plan is to conduct a SWOT analysis. This is a tool that helps identify the strengths, weaknesses, opportunities, and threats of the business.
The SWOT analysis should answer questions such as:
- What are the internal factors that give the business an advantage or disadvantage over its competitors or alternatives?
- What are the external factors that create favorable or unfavorable conditions for the business to grow or improve?
- How can the business leverage its strengths and opportunities to achieve its goals?
- How can the business overcome or minimize its weaknesses and threats to avoid or reduce risks?
The SWOT analysis can be done using a simple matrix, as shown below:
| Strengths | Weaknesses |
|---|---|
| Factors that give the business an edge over others | Factors that limit the business or make it vulnerable |
| Examples: – High-quality products or services – Loyal and satisfied customers – Strong brand reputation – Innovative and creative solutions – Skilled and motivated staff | Examples: – High costs or low profitability – Limited resources or capacity – Poor customer service or retention – Weak online presence or visibility – Lack of differentiation or uniqueness |
| Opportunities | Threats |
|---|---|
| Factors that create favorable conditions for the business to grow or improve | Factors that create unfavorable conditions for the business to decline or fail |
| Examples: – Growing or untapped market demand – New technologies or trends – Positive customer feedback or referrals – Strategic partnerships or alliances – Regulatory or policy changes | Examples: – Declining or saturated market demand – New competitors or substitutes – Negative customer reviews or complaints – Competitive pricing or promotions – Regulatory or policy changes |
The SWOT analysis should provide a realistic and balanced assessment of the strengths and weaknesses of the business, as well as the opportunities and threats that it faces.
3. Goals and Objectives
The third step in creating a business development plan is to define the goals and objectives of the plan. These are the desired outcomes that the business wants to achieve through its growth initiatives.
The goals and objectives should answer questions such as:
- What are the specific, measurable, achievable, relevant, and time-bound (SMART) targets that the business wants to reach?
- How do these targets align with the overall vision, mission, and values of the business?
- How do these targets address the needs and expectations of the target market?
- How do these targets differentiate the business from its competitors or alternatives?
The goals and objectives can be categorized into different levels, such as:
- Strategic goals: These are the long-term and overarching goals that reflect the vision and mission of the business. They are usually broad and qualitative, such as increasing market share, enhancing customer loyalty, or improving brand awareness.
- Operational goals: These are the short-term and specific goals that support the strategic goals. They are usually narrow and quantitative, such as generating a certain amount of revenue, acquiring a certain number of customers, or launching a new product or service.
- Individual goals: These are the personal and professional goals that motivate and empower the employees or leaders involved in the plan. They are usually related to skills, knowledge, performance, or career development.
The goals and objectives should provide a clear and coherent direction for the business development plan. They should also be SMART, meaning:
- Specific: They should state exactly what needs to be done, by whom, when, where, and how.
- Measurable: They should have clear indicators or metrics to track progress and measure results.
- Achievable: They should be realistic and attainable, given the available resources and capabilities.
- Relevant: They should be aligned with the overall vision, mission, and values of the business, as well as the needs and expectations of the target market.
- Time-bound: They should have a defined start date and end date, as well as milestones and deadlines.
4. Strategies and Tactics
The fourth step in creating a business development plan is to develop the strategies and tactics for achieving the goals and objectives. These are the actions and methods that the business will use to execute its plan.
The strategies and tactics should answer questions such as:
- What are the best ways to reach and attract potential customers or clients?
- What are the best ways to communicate and deliver value propositions to existing customers or clients?
- What are the best ways to create and maintain competitive advantages over competitors or alternatives?
- What are the best ways to optimize resources and processes for efficiency and effectiveness?
The strategies and tactics can be based on different frameworks or models, such as:
- The 4 Ps of marketing: This is a framework that focuses on four elements of marketing mix: product (or service), price, place (or distribution), and promotion. It helps determine how to create value for customers by offering solutions that meet their needs, setting prices that reflect their perceived value
-
- choosing channels and locations that reach customers effectively, and using various methods and media to promote awareness and interest.
- The Ansoff matrix: This is a model that helps identify growth opportunities based on four strategies: market penetration (selling more existing products or services to existing markets), market development (selling existing products or services to new markets), product development (selling new products or services to existing markets), and diversification (selling new products or services to new markets).
- The value chain: This is a tool that analyzes the activities and processes that a business performs to create value for its customers. It helps identify the primary activities (such as inbound logistics, operations, outbound logistics, marketing and sales, and service) and the support activities (such as procurement, human resource management, technology development, and infrastructure) that contribute to the business’s competitive advantage and profitability.
The strategies and tactics should be aligned with the goals and objectives of the plan, as well as the strengths, weaknesses, opportunities, and threats of the business. They should also be specific, measurable, achievable, relevant, and time-bound.
5. Budget and Timeline
The fifth step in creating a business development plan is to estimate the budget and timeline for implementing the plan. This involves allocating resources and assigning responsibilities for executing the strategies and tactics.
The budget and timeline should answer questions such as:
- What are the costs and benefits of each strategy and tactic?
- What are the sources and uses of funds for the plan?
- What are the milestones and deadlines for each strategy and tactic?
- Who are the roles and responsibilities of each person or team involved in the plan?
- How will the progress and performance of each strategy and tactic be tracked and reported?
The budget and timeline can be presented using various formats and tools, such as:
- A spreadsheet: This is a tool that organizes data into rows and columns. It can be used to calculate costs, revenues, profits, cash flows, return on investment, and other financial metrics for the plan.
- A Gantt chart: This is a tool that visualizes the schedule of tasks and activities for the plan. It can be used to show the start date, end date, duration, dependencies, progress, and status of each task or activity.
- A RACI matrix: This is a tool that clarifies the roles and responsibilities of each person or team involved in the plan. It can be used to show who is responsible ®, accountable (A), consulted ©, or informed (I) for each task or activity.
The budget and timeline should provide a realistic and feasible estimate of the resources and time required for implementing the plan. They should also be flexible and adaptable to changing circumstances and opportunities.
6. Evaluation and Measurement
The final step in creating a business development plan is to define the evaluation and measurement criteria for assessing the effectiveness and impact of the plan. This involves setting key performance indicators (KPIs) and metrics for monitoring the evaluation and measurement criteria should answer questions such as:
- What are the key outcomes and impacts that the plan aims to achieve?
- How will these outcomes and impacts be measured and quantified?
- What are the data sources and methods for collecting and analyzing the data?
- How often and how will the data be reported and communicated?
- How will the feedback and insights from the data be used to improve the plan?
The evaluation and measurement criteria can be based on different frameworks or models, such as:
- The balanced scorecard: This is a tool that measures the performance of a business or a plan from four perspectives: financial, customer, internal process, and learning and growth. It helps align the objectives, strategies, and tactics of the plan with the vision and mission of the business, as well as the needs and expectations of the stakeholders.
- The logic model: This is a tool that illustrates the logical relationship between the inputs, activities, outputs, outcomes, and impacts of a plan. It helps clarify the assumptions, resources, processes, results, and value of the plan.
- The SMART criteria: This is a tool that evaluates the quality and relevance of the goals and objectives of a plan. It helps ensure that they are specific, measurable, achievable, relevant, and time-bound.
The evaluation and measurement criteria should provide a clear and consistent framework for assessing the effectiveness and impact of the plan. They should also be aligned with the goals and objectives of the plan, as well as the budget and timeline of the plan.
Conclusion
A business development plan is a document that outlines the objectives, strategies, and tactics for growing a business. It is a roadmap that describes how a business will achieve its desired outcomes and overcome its challenges.
A business development plan should include the following components: situation analysis, SWOT analysis, goals and objectives, strategies and tactics, budget and timeline, and evaluation and measurement.
A business development plan should be aligned with the overall vision, mission, and values of the business, as well as the needs and expectations of the target market.
A business development plan should be flexible and adaptable to changing circumstances and opportunities.