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A Perfect Fit: Create the Right Business Development Strategy for Your Organization
By Marsha Lindquist
What size and type of business should you pursue? What size and type of business are you? When you’re considering taking on new business, you need a business development strategy. Rather than using a scattershot approach, you want to create a strategy in which the size and type of business you go after is determined by a clear understanding of your own business, including your resources, historic strengths, and customer base.
Your strategy will help you fill your business environment with a small, controlled pattern of pursuits that limit and focus your activities, making them more effective. Why is this important? Realize that no one can be an expert in all things; however, you probably are already very expert in at least one area, maybe even in a few key areas. When you concentrate your attention and resources on just those efforts, you will better use your resources, and your business development efforts are more likely to succeed.
You’ll find that all potential business fits into four basic categories, only three of which are desirable efforts to pursue. When you create your strategy, and you’re deciding on your targets, you need to ask of each potential client or project, “Does it fit into one of these first three? If so, which one?” Make sure you’re getting the business from the right category in the appropriate amounts.
1.An easy fit – Easy fit work is work you currently do and do well. It’s the proverbial “low-hanging fruit”—work that you do for existing clients. Your organization has a reputation for doing good work in this area, which is probably the foundation of your business. Even if you were to go after a larger-than-usual project, it would still be an easy fit because you’ve worked for these clients before on a smaller scale, and they already know and love your work. Easy fit should be forty to seventy-five percent of the business you pursue.
2.A reach fit –As the name implies, this type of new business is a bit more of a reach. It’s the same kind of work you’re currently doing, but you’re doing it for new clients. In this case, the size of the project matters less than that you’re doing it for someone new. Twenty to fifty percent of the business you pursue should be reach fit.
3.A stretch fit – Stretch fit business involves working with current clients on a type of project you may never have attempted before. In this case, your clients already know what you’re capable of, and are willing to take a chance that you’ll be as good at this new work as you were at whatever you’ve done for them before. Business coaching can be an example of a stretch fit if you have consulted with a client before but haven’t coached that particular individual. Target one to twenty percent of your business to fit in this category. The first year you’re going after stretch fit work, you shouldn’t be spending a lot of time and money on it, maybe as little as one to two percent, and don’t expect a lot of revenue from it, either.
4.No fit at all – In this area, you’re in foreign territory; there’s simply no “fit” when you’re doing new work for new clients. An alarming number of companies will pursue a piece of business they’ve never done before from someone who doesn’t know who they are. Such a pursuit is highly unlikely to produce work for your organization and should therefore be avoided.
Seek Balance and Give it Time
When you’re creating your plan for pursuing business, it’s less important that your percentages in each category add up than that you seek to balance them rationally according to your business’s strengths and history. For example, in your first year of pursuing more stretch fit work, plan on it bringing in a very small percentage of your revenue, and project your percentage of easy fit work to be quite high in order to sustain your business.
The easy fit and reach fit work will always be your base. When you plan where your revenue will come from, it should always consist of mostly easy fit work and, to some extent, reach fit work. Very little should be stretch fit work unless you’ve been going after it for some time.
When does reach fit and stretch fit work become easy fit? Just because you stretch out and do something new for a year doesn’t make it automatically easy fit work for you the next year. Before you begin to think of it as easy fit, continue to think of stretch fit work as stretch fit work until you’ve done it repeatedly for three to five years. You can’t count on stretch fit work making up much of your revenue stream. On the other hand, after three or four years of going after stretch fit work, if you’re seeing more of it coming in, you may feel confident enough to increase that number and lower the percentage of easy fit work.
Keep Your Organization “Fit” for Duty
In your business development plan, spending on these three efforts should be in proportion to where the revenue is coming from. So if a large portion of your revenue comes from easy fit work, then a large part of your development dollars and time should be spent on new easy fit business.
Once you have a business development strategy, you may never need to reassess the proportion of your fit categories if the configuration you’re currently concentrated in pays off for you. There’s simply nothing wrong with spending your time and energy on trying to get the same kind of work you have always gotten. The best dollars you’re going to see in your revenue stream are from current clients who know what you do and want more of it.
However, if organizations always refused to do what they do best for new clients or to work on new projects with existing clients, they could never outlast their competition. Your business strategy should stretch your organization at least a little bit at a time so that it can grow. Take a little risk when you’re planning, but lessen the potential negative effects of that risk by building that stretch into a business development plan with a healthy proportion of easy fit work. When you follow these guidelines, you’ll quickly have a business that’s “fit” to become the industry leader.
About the Author
Marsha Lindquist, CEO of The Management Link, Inc., has over 30 years experience as a business expert in Government contracting She has enhanced her clients’ cost competitiveness, improved their contractual positioning, and solidified overall strategies with companies including BP Amoco, DynCorp, and Northrop Grumman. Marsha adds value by telling you what you need to hear. For more information on her, please visit: www.TheManagementLink.com or email her: Marsha@TheManagementLink.com.
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