What is Business Development? - Definition & Basics

Instructor: Sherrie Lawson

Sherrie has taught over 20 courses in Business, Management, or Leadership and has a Master's in Organizational Leadership.

This lesson will introduce you to the concept of business development. Learn about the components that make up business development and how to use them in a business strategy.

Business Development: Definition and Components

Business development is an ever-evolving concept that can be approached from different perspectives. At its basic level business development is defined as growing a business by making it more competitive, expanding products or services, and/or focusing on specific markets. In other words, business development is the practice of growing a business beyond its current state.

Business Growth
Biz growth

There are three main components that business experts generally agree form the base of business development: markets, customers, and relationships. In order to grow a business beyond its current state, it is important to focus on one or more of these areas. The type of business and the direction of growth determines where the focus is placed.

For example, if you have a frozen yogurt shop and want to develop it by increasing sales or opening more shops, you could focus on the type of customers that patronize the business, the latest trends in the frozen yogurt market, and/or the relationship the yogurt shop has with its current customers, its employees, or even partnerships with other businesses.

The Market

Let's continue using the frozen yogurt shop as an example. Placing focus on the current market could help in developing the business. You would need to research things like the latest trends in flavors and nutrition. Are there new popular flavors or toppings? Is there a yogurt you could offer that has fewer calories or sugar but still has good flavor? Is there a demand for specialty events like office yogurt parties that you could add as a catering service? If so, these could be offered as additional products and services. Becoming informed about the current market demands will help you determine how to develop or grow your business.

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