Sales vs. Business Development: What's the Difference?

Sales development and business development are different functions within a company that both work to increase awareness and sales. Sales development focuses on identifying leads, researching and developing them and moving them along the sales cycle toward a closing. Business development involves finding new growth opportunities for the company and forming strategic partnerships that open up new markets. In this article, we discuss the differences between sales and business development within a business.

Differences between sales and business development

Here is a list of differences between sales or business development to help you understand each department's unique place in a company's operations:

Impact on the company's profits

Both business and sales development contribute to a company's success by bringing in more revenue, but they do so in different ways and within different time frames. The sales development function involves reviewing leads, researching them, determining which ones are most likely to convert and sending those on to a salesperson to close. In the business development department, staff members look for new avenues to grow through partnerships with other entities.

Focus on the present vs. the future

In sales development, the focus is on what the customer or client can buy from the company immediately and what the company can deliver immediately. With business development, professionals develop relationships to give the company new audiences to sell to in the future.

For example, a sales development team for a company that makes household tools, such as hammers and screwdrivers, might respond to an inquiry from a hardware store about putting products on the shelves in the store for direct sales to consumers. The company's business development department might work on a 10-year contract to sell tools to the state for the maintenance staff members who upkeep government buildings.

Customer's perspective

Customers working with the sales division are likely at one of three stages in the buying process:

• Awareness: They may be looking for a solution to a problem that the company can solve. Using the example of the tool company, a customer at this stage knows they need a new hammer and is looking at what the company offers.
  

• Consideration: They may have already identified several solutions and are evaluating all the options. At this stage, the customer has looked at six different hammers and is deciding which one they want.
  

• Decision: They may have selected the solution they want and decided what they are willing to pay for it. At this stage, the customer knows which of the six hammers they want and are comparing prices at various retailers.

The business development team might work on new products to offer to customers who are in the first stage of looking for solutions. In that sense, business development is sales. However, the main purpose of this department is not sales transactions. It is to work with the research and development team to develop a new tool design for the customer to evaluate in the first stage of buying while they are considering all the possible solutions.

Timeline of the impact

The sales development role is part of the day-to-day creation of revenue. As inbound leads come in, sales development qualifies them and sends the best prospects on to closers. This process happens daily to keep the company operating. Sales development goals are usually defined in monthly, quarterly or annual terms.

Business development is a more long-term project. This department works on strategic partnerships and new products that may take a year or more to come to fruition. The time required to generate revenue from those efforts might be even longer. Business development contributes to the long-term future of the company rather than the day-to-day operation.

Related: Understanding the Basics of Strategy Development

Focus on current products vs. technology

The sales development department focuses on the products the company can deliver to the customer immediately. The business development department focuses on the technology available to develop new solutions for the customer. The sales department in the tool company example would focus on getting the current product line out to stores and consumers. The business development department would create new and improved tools to offer in the future.

Related: How To Build Business Development Skills

Day-to-day tasks of a business development manager vs. sales manager

The sales team of a company calls on customers and prospective customers, answers inquiries about current products, works on contracts and conducts product demonstration presentations. The business development team researches potential new venues through which to sell the products in the future. This group also looks for new products and solutions that might be welcome in the market.

Related: 10 Tips for Giving a Great Presentation

The level of advancement

A position on the sales team is often the entry-level step for an employee coming into the company. A move into the sales development department could be the next step, while others could move directly from sales representative into business development.

Business development is a more advanced type of sales, and many business development professionals start as sales representatives. An employee in the tool company might join the business as a sales representative, calling on hardware stores. As their knowledge of the products grows, and they have a greater understanding of the industry as a whole, they might move into sales development and then business development to help bring new tools to the market.

Related: 18 Excellent Sales Qualities for You To Develop

Transactional vs. relational

Sales business development is a transactional interaction, meaning that it involves the sale of goods or services between a seller and a buyer. If everything goes well for both parties, the result will be a seller who makes a profit and a customer with a product that meets their needs. Business development is a relational activity. The goal of the business development department is to identify, cultivate and grow relationships that will open up new paths for opportunities in the future. The result of successful business development is strong, mutually beneficial relationships.