What is business development?
Business development, sometimes called sales development, is a concept that refers to the general strategy of business expansion, profits and more within an organization. These functions support the success of other departments, like sales or marketing.
Business development associates and managers are responsible for connecting sales to qualified leads. To do so, they perform activities such as identifying and creating potential sales relationships, establishing strategic partnerships, developing business strategies and researching market trends.
Job titles for business development
Business development roles may include titles such as:
- Business development manager
- Business development representative
- Sales development associate
- Business development specialist
- Director of business development
Related: What Is the Function of HR in a Small Business?
What is sales?
Sales refers to the process of completing transactions and generating revenue. Sales representatives are responsible for connecting with clients or customers to guide them through the transaction process, the end goal being to make a sale.
Sales representatives often act as the face of the organization and help create lasting customer relationships. Daily activities might include connecting customers with items that match their buyer personas, developing sales strategies and following up on warm customer leads. In addition to sales associate roles, sales team members may also work in roles that deal with account management or customer success.
Job titles for sales
Sales roles may include job titles such as:
- Sales representative
- Sales manager
- Account manager
- Customer success associate
Related: Sales Quotes: Six Thoughts to Start Your Day
Business development vs. sales
Business development and sales perform similar functions within an organization since they share the general goal of expanding business and reaching profit goals. Both contribute to the sales process and, as such, are both responsible for satisfying sales quotas or goals. These roles are so similar that some refer to them interchangeably, with some employees in organizations even performing both roles.
Roles in either function have overlapping skills and tasks. Employees in both roles must have significant knowledge of their relevant markets and be able to research leads effectively. They should both make quality connections with customer leads regardless of inbound or outbound activities.
Although some organizations do not distinguish between these roles, they do perform different functions. The primary differences between business development vs. sales are which part of the sales process they support. Sales processes have different stages that precede the final sale.
The beginning of a sales process deals with more outbound activity, while the transaction phase deals with inbound activity. Business development is responsible for the initial outbound part of the sales process, while sales handles later inbound tasks and transactions.
The relationship between business development and sales is supportive and collaborative. To maximize business growth potential and maintain a competitive market presence, it’s important to ensure that sales and business development are well-aligned and functioning well together.
Sales vs. business development process
The business development and sales process follows several steps. It begins with outbound activity that involves researching and ends with connecting customers to products and making transactions. These steps outline how business development and sales roles interact with the sales process:
1. Prospect
The business development team starts the sales process with prospecting. This is an early research stage in which business development associates generate ideas to find potential customers. This might mean getting input from sales and marketing teams, reaching out to existing potential customers or developing new business strategies to respond to other customer demands.
2. Connect and qualify leads
In this stage, the business development department researches their relevant markets. This means outbound contact with cold leads to inform business strategies. Business development associates qualify new leads, which means determining if their buyer persona fits your service or product. To do so, associates can connect to cold leads by phone or email and ask questions that indicate customer and product alignment.
3. Research
Once business development teams have established the direction of their business strategy, they can begin more in-depth research into their prospects and products. This is important to understanding the perspectives of the various prospects that match the buyer persona. Business development associates can use this research to collaborate with marketing teams and develop marketing strategies.
This step is also where the sales department steps in, as business development can communicate with sales development and sales representatives to inform them on sales strategies. This ensures that sales representatives are provided with the most effective strategy related to buyer personas and product knowledge.
Related: Best Practices for Email Marketing in Your Business
4. Present
At the presenting stage, sales representatives begin approaching identified prospects or warm leads according to the strategies determined by business development. For example, a sales representative may provide a formal demonstration or presentation if selling a service or product to a larger organization. In other cases, sales representatives can approach warm leads more casually with conversations over emails or phone calls that follow up from business development preliminary connections and leads.
5. Handle objections
Sometimes, potential customers may object to sales representatives’ presentations or pitches. Therefore, business development should identify potential objections regarding product value or necessity during research steps and prepare sales accordingly. This means that sales representatives can perform any additional research or preparation. That way, they can anticipate and respond to any questions and objections.
6. Closing deals
The sales team is primarily responsible for closing deals or sales. Closing deals is the main goal of sales representatives, with sales quotas often used as the main performance marker. Sales representatives develop professional relationships with customers and clients and guide them through the transaction process. Depending on the type of organization, the transaction may be a sale, contract or deal.
7. Ongoing development
Following the transaction, an account or customer success manager usually receives the lead or the account. Even though the transaction is complete, this lead is still considered warm. Ongoing development is necessary for maintaining customer relationships and satisfaction. It enables customers to purchase the same or different services as the sales team reconnects with them.
Read more: An Intro to Sales for Business
Advantages of separating business development and sales
If your organization doesn’t already separate business development and sales, your business might benefit from the advantages that the distinction offers.
Division of labor
Although business development and sales have similar functions, their day-to-day activities don’t have much overlap. If a business combines these activities into one role, then that employee is responsible for a vast range of tasks. An overloaded employee can lead to inefficiency since switching rapidly between activities can lead to mental strain, burnout and lower quality of work.
With distinctive business development and sales roles instead, employees can focus on fewer and more related tasks. This can lead to higher quality work over more efficient periods of time.
Labor specialization
When companies divide labor as described above, employees specialize in their roles. Over time, employees may become highly qualified experts. This is ideal for accommodating individual employee strengths. If one employee is a more naturally skilled sales representative, then it makes sense for them to specialize in sales and develop their abilities to become an expert. Likewise, a more analytical employee may be better suited to specializing in business development where they shine in research and strategy.
Effective sales processes
With highly saturated and competitive markets, it can be hard to connect with and attract customers. To create more quality inbound leads, it’s essential to have a sophisticated business development strategy. A dedicated business development process can enable in-depth research and generate higher-quality leads.
Business development vs. sales FAQ
What is the difference between a sales manager and a business development manager?
The sales manager, focused on generating revenue, is in a leadership position in the sales department. A business development manager leads the business development team to develop business partnerships, identify sales relationships and develop business strategies. Both managers aim to create and develop sales leads but oversee different aspects of the overall sales process.
Is business development a sales job?
Business development overlaps with sales in some ways, such as market research, lead identification and generally expanding business. Although these terms may be used interchangeably, and some organizations may not differentiate between the two, they have separate functions in organizations.
Who reports to a business development manager?
Business development managers usually lead a team of associates and delegate business development tasks to them. Associates may interact with sales and marketing teams and managers but ultimately report back to the business development manager. Business development managers likewise interact with managers or associates from the sales or marketing departments, but they generally report to upper management like the executive director.
