Business Development is an ongoing task of the board of directors together with the executive management. Business development is based on the observation of the institution’s market and socio-economic environment and the reflection of new findings and ideas on the strategy and objectives of the institution. The objective of business development is to ensure the sustainability and existence of the support institution and if applicable, the continuous growth and development.
The basis for any business development is the initial business plan, where the foundation team has defined the mission (purpose) and strategic objectives of the institution for the coming 3 5 years. The strategic direction and objectives were set with reference to market research findings and the general socio-economic environment at this point in time.
After the set-up the institution will “test” in how far it can fulfil the strategic objectives in the chosen target market. One can imagine many conditions where a revision of the initial objectives and targets may prove necessary: economic crisis in one of the target markets, new access to potential clients through a new staff member’s contacts, new funding programme of an international organisation, saturation in one of the target markets after three years of activity, etc.
See a real life example on business development “Achieving Order out of Chaos”
The board of directors will review the strategic direction and objectives regularly every year and whenever major changes seem to become relevant.
How can the board of directors and the executive manager know whether the strategic direction needs to be revised or not?
Tip 10 Information sources for revision of strategic direction
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Analysis of unsatisfactory financial results (budgets, cash-flow, balance sheet) |
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Analysis of programme evaluations and internal evaluations |
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Industry or market surveys (published in journals, public reports, chamber newsletters..) |
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Information about trends, opportunities, threats from professional network and contacts |
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Analysis of sales activities and client feedback |
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Comparison with strategic directions of partner organisations, same professional support institutions in other regions or countries |
If the board of directors or the executive manager identify an important reason for reviewing the strategic direction, the board will need to undertake a reasonable market research. The management needs to be able to judge whether the changes and/or new business ideas constitute an opportunity and employ the strength of the institution. The management will then identify any weaknesses and threats and decide if those are manageable or not.
Similar to the marketing plan in the initial business plan the findings of the market research and analysis need to be used to answer the following questions:
· What has been done to identify needs (market research)?
· What is the identified need/demand?
· Are there already existing solutions (competition)?
· Did you identify unsatisfied needs, what is your competitive advantage?
· What are your weaknesses and did you identify any threats?
· Who is going to pay for the new or expanded service/product?
In case the board of management votes for the shift in strategic objectives or the integration of new objectives these changes need to be written down and attached to the business plan.
Following the setting of new strategic objectives, the management needs to elaborate an operational plan and define in detail any new programmes and activities.
Every change in strategic direction and/or objectives will impact the resources management of the institution and has to be considered by the top management. Furthermore, the marketing and sales plans and activities need to be adapted.