What is Business Development and How is it Different from Sales?
In many companies, there are two separate but related functions: Business Development and Sales. Early in my career I worked in Business Development at OneList, which became eGroups, which was acquired by Yahoo!
Both are necessary to the current and future success of your business. As an independent entrepreneur, you want to learn how to do both in the context of your core expertise.
Sales involves qualifying prospective clients/customers for the CURRENT products or services you offer. Consultative skills and creativity are essential here, yet the focus is qualifying a client in or out efficiently so as to maximize the return on sales resources, which are generally limited. In many companies, sales people are focused on very specific products and if they can’t sell that, they move on. I call this operational sales. The product and pricing is generally pre-defined, and the sales person has very limited discretion to change it.
Business development is focused more broadly on the future growth and value creation within the business. As such, business development requires skills in strategy, consultative sales, marketing, finance, operations, & team building so that you can identify, create, and develop opportunities to grow the business. In many companies, business development focuses on relationships with channel partners, joint venture partners, alliances, and/or potential acquisitions.
In business development, conversations with clients are often in the discovery stages. The product and pricing are in flux and evolving quickly. The best business developers find new ideas and work to converge on the right product quickly so that those products can be handed off to the operational sales force.
Another distinction is the time horizon of the two functions. Sales is often considered a shorter term focus — bringing in the revenue for the next few months or quarters, while business development is looking out years ahead.
As the CEO of your own business, you need both. You need a mix of clients and sales today, while developing the future business.
In a professional service business, business development is really about YOU — identifying your personal desires for growth and putting plans in place to grow in the direction you choose — personally, professionally, and financially.
