In today's fast-paced business environment, the importance of corporate development cannot be overstated in the lower middle market.

The lower middle market is defined as companies that have a revenue range of $5 million to $100 million. These companies often have unique challenges in comparison to larger companies when it comes to corporate development.

This article outlines best practices you need to follow to build a successful corporate development team in the lower middle market.

Define your team's role and responsibilities

The first step in building a corporate development team is to define their role and responsibilities. This includes identifying the key objectives and goals of the team, as well as the specific functions they will be responsible for. The team should have a clear understanding of their role in the organization and how they contribute to the overall success of the company.

Succession Planning

One of the primary challenges for lower middle market companies is effective succession planning. It's essential to have a plan in place to ensure a smooth transition when a founder or key executive leaves the company. Having a strong corporate development team can help with this planning, ensuring the company's sustainability in the long run.

Hire the right people

The success of any corporate development team is dependent on the skills and expertise of its team members. When building your team, it's important to identify individuals who possess the necessary skills and experience. These skills may include strategic thinking, financial analysis, business development, and negotiation skills. Additionally, the team should be made up of individuals who have a strong understanding of the industry and market dynamics.

Leverage your existing network

Your existing network can also be a valuable source of potential candidates. Reach out to your peers in the industry and ask for recommendations. You may also want to post job openings on LinkedIn or other professional networks.

Hire a business broker

Business brokers can help you find potential candidates for your corporate development team. They have extensive networks and can connect you with individuals who have experience in M&A, business valuation, due diligence, and other related fields.

Invest in training and development

To ensure your corporate development team is always at the top of their game, it's important to invest in their training and development. This may include providing opportunities for professional development, such as attending industry conferences or pursuing advanced degrees. Additionally, offering ongoing training and mentoring programs can help team members stay up-to-date on industry trends and best practices.

Foster a collaborative culture

To build a strong corporate development team, it's important to foster a collaborative culture. This means encouraging team members to work together, share ideas and insights, and collaborate on projects. This not only helps to build stronger relationships within the team but also promotes innovation and creativity.

Measure success

Finally, to ensure your corporate development team is successful, it's important to measure their performance. This means tracking key metrics such as deal flow, financial performance, and customer satisfaction. By tracking these metrics, you can identify areas where the team is excelling and where there is room for improvement.

Building a strong and effective corporate development team in the lower middle market requires a clear understanding of their role and responsibilities, hiring the right people, fostering a collaborative culture, investing in training and development, and measuring success. By following these best practices, you can build a team that is capable of driving growth and success for your organization.