Business Development vs Sales: Differences, Similarities, and Roles to Hire

Business development and sales are often used interchangeably, but they are actually two distinct functions with different goals, processes, and skills required for success. While both ultimately aim to grow your business, understanding the key differences is crucial for building an effective revenue-generating machine.

In this comprehensive guide, we‘ll dive deep into the world of business development and sales. We‘ll explore the specific roles and responsibilities of each function, the skills and experience to look for when hiring, and best practices for enabling seamless collaboration between the two teams. Whether you‘re a startup founder structuring your first sales hires or a growing company looking to optimize your sales organization, this article will provide expert insights and actionable advice.

What is Business Development?

Business development is the practice of identifying and pursuing strategic opportunities to drive long-term value for an organization. The role of business development is to create opportunities for the business to grow and profit, whether that‘s by forming partnerships, entering new markets, attracting new customers, or expanding the value of existing customers.

Professionals in business development roles take a broad view of the company‘s products, services, and target markets. They look for untapped opportunities and work to develop mutually beneficial relationships with other organizations through networking, researching industry trends, and staying on top of the competitive landscape.

According to Scott Pollack, author of What, Exactly, Is Business Development?, the four main goals of business development are:

Strategic partnerships
Driving sales
Entering new markets
Increasing profitability through efficiencies

Business Development Responsibilities

The day-to-day of a business development professional can vary greatly depending on the size and type of company, but common responsibilities include:

Researching and identifying new business opportunities, including new markets, growth areas, trends, customers, partnerships, products and services
Generating leads and building a robust pipeline through cold calling, networking, and email outreach
Qualifying leads to determine likelihood of conversion into paying customers
Building long-term trusting relationships with prospects and existing customers
Developing and delivering pitches and presentations to share the company‘s offering
Collaborating with internal teams like product, marketing and customer success to optimize sales strategy and processes
Negotiating and structuring deals, then handing off to the sales team to close

Business Development Skills

A career in business development can be incredibly rewarding, but it also requires a unique set of skills to thrive. Some of the most important skills and qualifications to look for when hiring for a business development role include:

Excellent verbal and written communication skills
Strong research, prospecting and lead generation abilities
Adept at relationship building and networking
Persuasion and pitching skills to gain buy-in from prospects and internal stakeholders
Project management experience to shepherd complex deals and partnerships
Creative problem-solving mindset
Ability to thrive in a fast-paced, often ambiguous environment
Adaptable and able to pivot strategy quickly
Business acumen and strategic thinking capabilities
Resilience and perseverance to handle rejection

According to the U.S. Bureau of Labor Statistics, the median annual wage for sales and related occupations, which includes many business development roles, was $41,600 in May 2021. However, compensation can vary widely depending on the industry, company size, and seniority of the role.

What is Sales?

If business development is all about opening doors and building relationships, sales is focused on sealing the deal. Sales professionals work closely with qualified prospects to demonstrate the value of the company‘s products or services, overcome objections, negotiate terms, and ultimately close the sale.

The sales process typically begins once a lead has been qualified by business development as having a high likelihood of making a purchase. This hand-off point can vary depending on the company – some have business development handle the entire sales process up until the final contract signing, while others transition to a dedicated salesperson much earlier.

Sales Responsibilities

A typical day in the life of a sales rep can include:

Contacting leads qualified by the business development team
Conducting discovery calls to understand the prospect‘s unique needs and challenges
Delivering product demos or sales presentations
Preparing and sending proposals with pricing and terms
Negotiating contracts and securing sign-off
Coordinating with other departments like legal, finance, and customer success to finalize deals and ensure smooth onboarding
Managing ongoing customer relationships to generate repeat business and referrals
Accurate forecasting of sales revenue
Consistently achieving or exceeding monthly, quarterly, and annual quotas

Sales Skills

Success in a sales role requires a potent mix of soft skills, business acumen, and discipline. Top skills to look for when hiring salespeople include:

Confidence and poise in verbal and written communication
Active listening and ability to ask probing questions
Skill at building rapport and relationships
Strong understanding of customer needs and pain points
Adept at overcoming objections
Ability to negotiate to create win-win deals
Persistence to keep deals moving through a long sales cycle
Comfortable discussing finances
Highly self-motivated and adept at time management
Persuasive presentation and product demo abilities
Technical savvy, especially when selling complex solutions

While sales compensation varies widely, sales roles tend to be heavily commission-based to incentivize performance. Top salespeople can earn well into six figures between base salary and commissions. According to data from RepVue, the average base salary for a SaaS sales rep is $56,286, with an average on-target earnings of $115,994.

Business Development vs Sales: Comparing the Two Roles

Now that we‘ve defined business development and sales, let‘s explore the key similarities and differences between the two functions.

Similarities

Business development and sales share the same ultimate goal: growing the company‘s revenue. Some of the key similarities include:

Communicating the value of the company‘s products and services
Building and maintaining positive customer relationships
Working closely with internal teams to optimize processes and address roadblocks
Utilizing strong interpersonal skills to influence and persuade
Thriving in a fast-paced, often high-pressure environment
Requiring a deep understanding of the company‘s offerings and target markets

Differences

Despite the overlap, business development and sales are two distinct functions with notable differences:

Business Development	Sales
Strategic, long-term focus on finding new opportunities	Tactical, near-term focus on closing deals and hitting quotas
Develops relationships with potential customers or partners	Maintains relationships with highly qualified prospects ready to buy
Focuses on the "top of the funnel" prospecting and lead generation	Focuses on "bottom of the funnel" late-stage deal cycles
Drives new revenue from new markets, products, or partnerships	Drives revenue primarily from existing markets and offerings
Hands off qualified opportunities to sales to close	Closes deals directly and is responsible for won revenue

Another key difference is in how the roles are measured and compensated. Business development professionals are typically evaluated on metrics like number of qualified leads generated, number of meetings set, and potential deal sizes. Compensation tends to be more heavily salary-based, sometimes with a smaller variable component tied to individual or team quotas.

In contrast, sales roles are laser-focused on bookings and revenue generated. Quota attainment is the north star metric, and compensation plans almost always include a significant commission component. According to a survey by Salary.com, the average variable pay for a sales rep is $30,000 on top of their base salary.

Organizational Structure: Combined vs Separate Teams

One of the biggest questions companies face is whether to have separate business development and sales teams, or one combined team responsible for the entire funnel. According to a survey by the research firm TOPO, 26% of B2B organizations have completely separate sales and business development teams, while 74% have at least some overlap in roles.

So what‘s the optimal model? As with most business questions, the answer is: it depends. Let‘s break down some of the key pros and cons of each approach.

Combined Business Development and Sales

Pros:

Streamlined communication and handoff process, since the same team owns the full funnel
Deeper relationships with prospects from initial outreach through close
More flexibility in assigning resources based on the pipeline
Easier for representatives to develop a broad skill set spanning prospecting to closing
Simpler reporting structure and less overhead cost

Cons:

Difficult for team members to specialize and hone specific skills
Risk of burnout and turnover as representatives must juggle competing priorities
Challenging to scale the business, as the same people are responsible for generating pipeline and closing deals
Lack of clear career paths, as there are fewer opportunities for vertical growth within each function

Separate Business Development and Sales Teams

Pros:

Enables each team to focus on their core strengths – prospecting and deal closing
Creates an "assembly line" that can generate a consistent flow of leads for sales
Scales more efficiently, as business development can focus on filling the top of the funnel as sales handles increasing deal volume
Provides clear metrics and career paths for each function
Easier to test and optimize each part of the funnel separately
More accurate pipeline forecasting and revenue projections

Cons:

Requires clear processes for lead qualification and handoffs to avoid leads falling through the cracks
Can create an "us vs. them" mentality between the two teams
Necessitates more collaboration and communication to ensure the teams stay aligned
Higher management overhead and cost
Harder to provide a seamless experience for customers

So when does it make sense to specialize? According to sales leader Trish Bertuzzi, separating business development and sales is the way to go once your business reaches a certain level of complexity in terms of deal size, sales cycle, and lead volume.

She recommends splitting the two functions when:

Your average deal size is over $10,000
Your sales cycle is over 30 days
You need to generate more than 100 leads per rep per month
Your solution requires significant technical knowledge to sell

If your company is still early-stage and sells primarily transactional deals, a combined team may be more efficient. Splitting the roles too early can actually hinder growth, as you have costly specialized roles that aren‘t being fully leveraged. As the business scales, separate teams can provide the focus needed to keep the pipeline full and deals moving.

Enabling Collaboration Between Business Development and Sales

Regardless of your organizational structure, business development and sales must be tightly aligned to achieve revenue growth. When the relationship breaks down, you risk business development handing over subpar leads, or sales reps dropping the ball on well-qualified opportunities.

Some strategies for enabling smooth collaboration include:

Defining a Service Level Agreement (SLA): An SLA clearly outlines the lead qualification criteria, hand-off process, performance metrics, and follow-up cadence between the two teams. It gets everyone on the same page and creates accountability on both sides.
Establishing Consistent Communication: Hold regular stand-up meetings or check-in calls for the two teams to share updates, exchange feedback, and solve challenges. Encourage business development to shadow sales calls to gain insight into customers‘ needs.
Using a Common Tech Stack: Implement tools like a CRM, sales engagement platform, and lead scoring system that both business development and sales can leverage for seamless data flow and visibility.
Aligning Incentives: While each role may have different performance metrics, consider having a shared quota or commission pool that rewards the entire revenue team for hitting goals. This fosters a "one team" mentality.
Celebrating Wins Together: When a big deal closes or the team hits a milestone, celebrate as a united front. Acknowledging that success is a result of collective efforts helps build camaraderie and trust.

The Future of Business Development and Sales

As technology continues to transform how companies go to market, the relationship between business development and sales is evolving. Some of the key trends shaping the future of these roles include:

Automation of Prospecting: New tools are emerging to automate lead generation, outreach, and follow-up tasks traditionally handled by business development. This will allow teams to scale their efforts and focus on higher-value activities.
Rise of AI: Artificial intelligence is being used to optimize lead scoring, surface insights about prospects, and even guide sales reps in their deal strategy. AI won‘t replace the need for human relationships, but it will make teams more efficient and effective.
Shift to Virtual Selling: With the rise of remote work, more of the sales process is happening virtually through video conferencing and digital proposals. Business development and sales teams need to adapt their strategies for building relationships and trust in this new environment.
Blending of Sales and Customer Success: As subscription-based business models become more prevalent, the line between closing a deal and managing the ongoing customer relationship is blurring. Business development and sales teams need to work closely with customer success to ensure a seamless handoff and long-term customer retention.
Emergence of Revenue Operations: Many companies are moving towards a unified revenue operations (RevOps) function that encompasses sales, marketing, and customer success. RevOps is responsible for driving alignment and optimizing the end-to-end revenue engine, which requires tight collaboration between business development and sales.

Regardless of how the specific tactics and technologies may change, one thing is clear: business development and sales will continue to play critical and complementary roles in driving growth. By investing in the right people, processes, and tools to enable these teams to work together effectively, companies can build a powerful revenue-generating machine.

Key Takeaways

We covered a lot in this deep dive on business development vs sales! Here are some key points to remember:

Business development is focused on generating new opportunities, while sales is focused on closing deals and generating revenue.
While there is overlap in skills, business development and sales roles require distinct strengths and experience.
The optimal organizational structure – combined or separate teams – depends on the company‘s stage, deal complexity, and growth goals.
Regardless of structure, close collaboration between business development and sales is critical for success. This requires clear processes, consistent communication, and aligned incentives.
Emerging trends like automation, AI, and the rise of RevOps are transforming the relationship between business development and sales, requiring new skills and ways of working together.

Ultimately, both business development and sales share the same goal of growing the company. By understanding the unique roles and interplay between these functions, companies can build aligned revenue teams that drive long-term success.

Business Development vs Sales: Differences, Similarities, and Roles to Hire