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Business Development vs. Sales

Instructor: David Whitsett

David has taught computer applications, computer fundamentals, computer networking, and marketing at the college level. He has a MBA in marketing.

In this lesson, we'll define both terms - business development and sales - and then highlight how the two terms are closely related and often used interchangeably (which may not be correct).

Defining The Terms

For the purpose of our discussion, let's define selling as the business process that culminates in a sale, or an exchange of a product or service for money. If you think about the steps a salesperson or a company goes through when selling something, there are many different elements. Assuming that the company has already done the research and developed a product that people actually want and need at a reasonable price, what's the next step? How do you get the word out about your product? Are there partners in the marketplace that could help you sell your product because it benefits them in some way?

This is where business development comes in - the finding of customers, markets, and relationships with partners in order to sell the product. Now when you hear this, you may say that business development sounds somewhat like marketing, which has typically been thought of as creating awareness and demand for a product or service. The truth is that in most small businesses with a sales force, even a sales force of one, marketing and business development are part of the sales process. For the small sales team, marketing and business development are considered part of the prospecting process (identifying potential customers). You have to find a target to sell your product to and it's easier to sell something to someone who has awareness of your product before you walk in the door. It's also easier if a small sales staff works with partners who can help the sell product for them - that acts as a force multiplier.

Marketing is integral to the overall business plan
Business plan

A small business owner might send a salesperson to set up a booth at a local Chamber of Commerce event, hoping to create awareness and maybe even making a contact that could lead to a sale. This activity has aspects of both business development and marketing and the salesperson is the one doing it, so a small-business salesperson ends up wearing many hats.

Trade shows are a business development activity
Conference booth

In a larger business entity, the functions of marketing, business development, and sales might be handled by many different staff members. The marketing department could include advertising and promotions, shaping the message and the public perception of the product. Marketing could also do research to determine what customers want and coordinate public relations efforts to give the company a coherent voice. Business development staff could look for channel partners, companies that can sell their products or services as part of their own offerings to customers. For example, a company that makes phone systems (i.e. Cisco Systems) could partner with a company that offers phone service (dial tone). They could work together to sell the combination of the phone systems and the dial tone to clients.

Cisco Systems has had a large and successful channel partner program for many years
Cisco logo

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