In my over 25 years experience in business development for Financial institutions, IT enterprises, Law Firms and Medical Practices there is an unfortunate, common repetitive pattern/tendency that costs unnecessary money and reduces efficiencies considerably.
This tendency can simply be defined as “unproductive” business development practices. While it can be stated simply it is NOT a straightforward problem in the least. Not appropriately, consistently and diligently creating and implementing a business development plan can and does cause significant financial and productive leakages to a business entity. For a small or growing company, business or practice, such a business development oversight can and often is very detrimental in many ways.
I have identified 5 of the most common unproductive business development practices. I hope that, if you can identify any or all of these within your business entity, you recognize the red flag and take heed.
The 5 Major Business Development Don’ts are the Following:
1) Don’t Randomly Advertise. Sounds weird, but it is NOT. One of the most common mistakes and seemingly harmless ones is to advertise a company, product or service without a clear target.
Unless you are a large entity, advertising expenditures should be seriously confined for specific targeted campaigns. Brand recognition advertising for smaller and or new practices is NOT an optimum use of resources.
2) Don’t Just “Get” Business- Instead Get the Right Business.
A common mistake in small to medium size companies is to “accept” any client even if the fit is not perfect, i.e. a client project that is not cost effective or a “difficult problematic client” or a client whose request is out of the range of expertise.
This can be a seemingly difficult situation, especially, if there are cash flow issues within a company. However, ultimately, saying no to these clients is the most cost effective solution.
3) Don’t Leave Your Business Growth to “Chance”
Many small businesses and medical practices get “caught up” in servicing clients when ample clientele is at hand, thus, ignoring future business needs. For small to medium size businesses this is one of the major causes of cash- flow problems. There should always be a consistent everyday effort to bring in new clients. This ensures a constant source of new clients as they progress through the customer life cycle.
4) Don’t Ignore Your Previous Clients
One of the biggest sources of potential revenue for any business, medical practice or law firm is satisfied past clients. There are three ways that these clients can generate new revenue for a business: firstly, by cross-selling other products or services that are complementary to what they bought last time; secondly, by up-selling services or products that enhance their growth or customer satisfaction; thirdly, referrals. Satisfied customers are one of the greatest sources of new business. However, in order for this to be successful you must cultivate a “relationship” with your clients via warm calling, holiday cards, emails, gift certificates etc and you must ASK! Previous Clients are the quickest most effective way to gain new clients… do not ignore this financial resource at your fingertip!
5) Don’t Confuse Business Development/Sales/Marketing
Sales and Marketing are quite distinct from Business Development. Simply put Sales represents the completion of a client prospecting stage, Marketing is the means to communicate value and awareness of a product or service, while Business Development represents the holistic/big picture for business growth. More specifically, business development concerns the tasks, processes and preparation for business/opportunity growth. Business Development is in essence the means to obtain the plan and targeting for growth. Having this plan/bigger picture helps to refine the client/service/product penetration and thus expedites and streamlines the sales and marketing efforts.
Ironically, most sophisticated and large companies have well funded business development departments, however, it is the start-ups, small and medium size enterprises that actually need a business development team or process the most.
It is my sincere expectation and desire that should you identify any of these “red flags” in your business it will start a thinking process and adjustment of your entity’s activities and strategies.