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Business Development Mistakes To Avoid

  Business development is is an effective way that can be done in developing the business that we live. Some of the largest companies like Apple, Tesla, Spotify are all using business development to exponentially grow their businesses.

Business Development Mistakes To Avoid

But as powerful as business development may be, if used incorrectly it can actually stunt your growth or even harm your business. 

So, in this article we're gonna talk about the five top business development mistakes you absolutely meet to avoid if you want to be successful. 

First business development mistakes.I see a lot of people making is that they're going for deals that are too small. So to kind of explain business development, it's when two parties work together in a long-term relationship where it benefits both sides. 

Now, because the nature of business development is very long term, if you go after deals that are too small you might have to put in too much work but you don't get much in return. 

For example, if you spend let's say three months working on a deal with Spotify, which is huge, then in the end, if you have a partnership with Spotify, depending on what it is, it can totally blow up your business in a good way. 

Now if you work with, let's say, a small music platform nobody has heard of and they're only getting, maybe they only have 10,000 users, well, compared to Spotify, even if it takes three months to do this small deal, you may not get the same reward, because the platform that you're working with is too small to get a positive ROI, because a platform is too small to make it even worth it. 

Now if you're doing any type of business development there are two important things you need to consider. Number one, how long is the sales cycle? 

Meaning how long is it gonna take you to sign somebody up and work with them from a business development perspective? 

And number two, what is the potential reward? Is gonna be a high reward or is it gonna be a low reward? So you always want to take those two things into account, because if you're gonna put a lot of energy into a long-term partnership you got to make sure it's actually going to be worth it. 

Business development mistake number two, and that is not thinking long term. Business development is all about long-term partnerships. You want to think of the relationship and your potential profit in the long term. 

And I'm not talking about three months from now or six months from now. You want to think about what is it gonna look like one year from now, five years from now, 10 years from now. 

If you do a business development deal now. How long can you reap those fruits of labor? An example would be 4kids Entertainment, which is a licensing company in North America, and Pokemon. 

So, Pokemon was originally all Japanese. Where they had to anime, merchandise, video games, things like that. 

So 4kids Entertainment basically took all that, got the licensing deal with Pokemon, and brought all that stuff over America. And if you're from America, like I am, that's probably why you saw Pokemon on TV on Saturday morning cartoons when it first came out in 1996. 

So in this kind of long-term partnership, it's a win-win for both sides. Because 4kids Entertainment, they basically took something hot in Japan, they brought it to America, and they reaped the rewards over years of time. Because, they got the licensing rights to create the toys and merchandise. 

And that was the biggest revenue driver for Pokemon and it still is. Pokemon wins because from a long-term perspective if they don't know how to break into the North American market and the English-speaking market, well, they have a partner that will do all the work and they collect a percentage of the revenue. 

And now you may not know, but Pokemon does all this on their own. They don't have to work with a partner because they're big enough to have branches all over the world. 

But at the time in the 1990s, it was a win-win partnership on both sides. So if you're thinking about your business development deals, you've got to think about what it's gonna look like in the long run. 

A lot of people are too focused on trying to get the sale now and they go after the wrong prospects or when they handle the sale cycle they're thinking too short term and trying to close as fast as possible. 

But, actually it's better to build a proper relationship and understand both sides strategically. How both sides can benefit in the long run. 

Business development mistake number three, and that is not building a lead generation machine. Now in business development, obviously one of the most important aspects is to generate leads. 

And when I say leads I mean generate appointments with ideal customers. And that's done through either -- email, LinkedIn messages, cold calling, or if you're doing any type of marketing, you might do an ad or have SEO or blogs and bring leads coming in and get the business development person on the phone to talk to that person. 

When you're a business development person, sometimes maybe you generate some leads or the company has leads for you and you start working on these deals. 

Then when you're so busy working on the deals, you might forget to do lead generation, so that when you finish the deals or maybe those deals fall through and you don't close anything, well, you have to start from zero again.
If you don't have a lead generation machine, consistently pumping in new leads every single month. So if you're doing any type of business development, especially if you're the one who has to close the deal, you want to make sure you have some type of system, whether you're doing it or another person is doing it where they're consistently going out to generate leads every single month.

Because even if you have a pipeline of opportunities already and deals that you're working on, you always need to keep bringing in new deals, new deals, new deals, because some deals fall through the cracks and they don't work anymore or the customer's not ready, and that totally happens.

Not everybody's gonna say yes. So that's why you gotta replace those deals with new fresh leads. And you never know, the new leads might be much bigger, than the current deals you're working on.

So, that's why you got to build a lead generation machine. No matter what the case is. Business development mistake number four, and that is being too desperate.

Now a lot of times, when you're starting out in business development or maybe you're working at a company that's a startup and it's smaller, people don't know who you are, when you want to work with a larger company, sometimes people be a little too desperate or business development people that is.

And that means when you're working on a deal and you're trying to negotiate the terms of a deal, if you are in a, if the other person has a lot more leverage over you, they're gonna ask for discounts, better terms, whatever is better for them in the long run, they're gonna keep pushing for that, because they know that they have more leverage.

Now if you're too desperate and you don't hold your ground, they're gonna keep taking, taking, taking, they keep moving that line and take as much as possible from you to the point where the deal is barely worth it for you.

So, that's why whether you're just starting our or maybe you already have some experience you never want to be too desperate. You want to know what's the absolute minimum that you're willing to accept in terms of payment, in terms of what price you're offering, or maybe it's a percentage of revenue or profit.

You always want to make sure that you have an absolute minimum and you don't go past that and you don't want to be at your minimum either.

You want to be doing something that's fair for you and fair for them. So don't be too desperate just to close a deal. Hold your ground and keep your profit margins healthy. Business development mistake number five, and that is too focused on selling.

Business development is pretty much the same as sales in some capacity. And a lot of times business development people will focus too far into selling and trying to close the deal.

But in fact when you're pushing too hard and you're forcing someone into a position that maybe they don't want to be in or maybe they weren't even supposed to be in in the first place, well, a lot of deals will fall through, you lose trust with the prospect and that's just not good because that's less revenue for you.

Instead, what you want to do instead of focusing so much on selling, and selling is important obviously, but you want to focus on helping first. You want to make sure you understand the prospect's problems, their pains, their challenges, their aspirations, and you want to figure out how your product or service can help them get to where they want to go.

And so when you are more focused on selling and you're more focused on helping the customer, achieve their desired results instead of trying to fill your pockets as much as possible, then the entire selling and business development experience for that client is gonna be totally different from what they have experienced in the past.

And when you are perceived as different and you're perceived, that someone is genuinely trying to help and you're not just trying to be selfish and extract as much money as possible, then people can feel that, people can see that, and ultimately it's gonna lead to a better long-term partnership in the future.

The most important thing is you want to think of it long term. You can't just take someone's money and run away in business development because it's not like sales. In sales maybe you could do that.

You sell something, you take it, and you run, which is not always the best thing to do, but you could do that. But for business development, if it's a partnership where two companies are working together, you're gonna want to create terms and deals where both sides win.

So don't always focus on selling, you do have to close, but you want to focus on how you can help your prospect or customer, client as much as possible and bring them so much value, that they're of course gonna be willing to work with you and recommend your products and services to other people as well. 

Read more: 4 Mindset Shifts That Have Changed My Life

So with that said, those are gonna be the top business development mistakes. I see people making and how you can fix them.

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