I’ve been on both sides of the table—building startups from scratch and later investing in promising ventures. One question that consistently arises is the distinction between business development and sales. Though often used interchangeably, these functions serve fundamentally different purposes in an organization’s growth strategy.

Introduction: The Common Confusion

Picture this: I’m at a coffee meeting with a founder who proudly tells me they’ve just hired their first “biz dev person” to boost sales. Minutes later, they describe a role focused entirely on closing deals and hitting monthly quotas. What they’ve actually hired is a salesperson—not a business development professional.

This mix-up happens constantly.

Why? Because both roles aim to grow the business, both involve relationship-building, and both require strong communication skills. Yet treating them as identical creates organizational confusion, misaligned incentives, and missed opportunities.

Let’s clear this up once and for all.

Defining the Core Functions

Sales is about executing transactions—converting prospects into customers through a systematic process. The primary goal is revenue generation through selling existing products or services.

Business development focuses on creating long-term value through strategic partnerships, new market opportunities, and relationship cultivation. BD professionals build frameworks for future growth rather than immediate transactions.

Think of it this way: Sales is about closing deals today. Business development is about creating opportunities for tomorrow.

Key Differences in Focus and Approach

Dimension	Sales	Business Development
Primary Goal	Generate revenue through direct transactions	Create strategic value through partnerships and new opportunities
Timeframe	Short to medium term (days to months)	Medium to long term (months to years)
Key Relationships	Customers and prospects	Partners, industry influencers, ecosystem players
Core Activities	Prospecting, presenting, negotiating, closing	Market analysis, relationship cultivation, strategic planning
Success Metrics	Revenue, deal closure rate, sales cycle length	Partnership quality, new market entry, ecosystem expansion
Compensation	Commission-heavy, tied to transactions	More base-oriented, tied to strategic milestones
Risk Profile	Moderate – outcomes are more predictable	Higher – many initiatives may not yield immediate results

During my time at my second startup, our sales team focused on hitting quarterly targets by selling our software to midsize businesses. Meanwhile, our BD team spent six months negotiating a partnership with an industry giant that eventually opened doors to enterprise clients we couldn’t have reached otherwise.

The Relationship Spectrum

People often ask me: “Where does sales end and business development begin?”

The reality is more nuanced than a clean dividing line. I visualize it as a spectrum:

Direct Sales → Complex Sales → Sales-Led BD → Strategic BD → Corporate Development

At one end, direct sales involves straightforward transactions with clear buyers. At the other, corporate development might involve acquisitions or major strategic initiatives.

Most organizations operate somewhere in the middle, with roles overlapping and evolving based on business needs.

One of my portfolio companies started with founders handling everything. As they grew, they hired salespeople for direct customer acquisition, while the founders focused on bigger strategic partnerships. When they hit 50 employees, they finally hired a dedicated BD professional to systematize partnership strategy.

Skills and Mindsets: What Makes Someone Excel?

The skills required for sales versus business development reveal much about their differences.

Great salespeople often demonstrate:

• Strong closing instincts
• Tactical persuasion abilities
• Resilience through rejection
• Customer needs analysis
• Effective objection handling
• Discipline in process execution

Exceptional BD professionals typically show:

• Strategic thinking across industries
• Patience for long-term value creation
• Connection-making between disparate opportunities
• Creative deal structuring
• Comfort with ambiguity
• Systems thinking rather than linear processes

I once advised a founder who tried converting their top salesperson into a BD role. Despite their success closing deals, they struggled with the broader strategic thinking and patience required for complex partnerships. The lesson? These roles demand different natural strengths.

When to Invest in Each Function

Many startups face the dilemma of which function to prioritize first. The answer depends on your business model and growth stage.

Consider investing in sales first when:

• Your product is market-ready with clear customer segments
• Revenue generation is the immediate priority
• The buying process is relatively straightforward
• Your market is established with known buyers

Prioritize business development when:

• Your market requires ecosystem building
• Distribution partnerships could dramatically accelerate growth
• Your industry relies heavily on strategic alliances
• You need to create new market categories or opportunities

One founder I mentored was determined to build a sales team immediately after launching her SaaS platform. After several struggling months, we realized her industry operated primarily through partnerships and integrations. Shifting focus to BD first created the ecosystem needed for sales to succeed later.

How These Roles Evolve as Companies Grow

Growth changes everything, including how these functions operate.

Early-stage startups (1-10 employees):

• Founders often handle both functions
• Focus on whatever drives immediate survival
• Little formal distinction between activities

Growth stage (10-100 employees):

• Specialized roles begin to emerge
• Sales focuses on repeatable processes
• BD explores adjacent opportunities and partnerships
• Potential tension between short and long-term priorities

Scale stage (100+ employees):

• Fully separated departments with distinct leadership
• More complex coordination required
• Strategic alignment becomes critical
• Systems needed to prevent conflict between functions

I watched one company grow from 5 to 500 employees. Initially, the distinction between sales and BD was meaningless—everyone did everything. By 50 employees, they had dedicated teams. At 500, they had VPs for both functions who sometimes competed for resources and credit. Growth necessitates clearer boundaries.

Measuring Success: Different Metrics for Different Goals

How do you know if each function is performing well? The metrics tell the story.

Effective sales measurement typically includes:

• Revenue generated
• Deals closed per period
• Sales cycle length
• Conversion rates through pipeline stages
• Customer acquisition cost
• Quota attainment percentage

Business development success often tracks:

• Partnership engagement quality
• New market penetration rates
• Strategic relationship depth
• Long-term revenue potential unlocked
• Ecosystem expansion metrics
• Strategic positioning improvements

The challenge? BD metrics are often harder to quantify and take longer to materialize. When one of my portfolio companies implemented quarterly reviews, their sales team had clear numbers to report. The BD team struggled to demonstrate progress on partnerships still in negotiation. This required creating milestone-based tracking rather than pure results measurement.

Working Together: The Power of Alignment

When sales and business development operate in silos, conflict inevitably emerges. The best organizations create alignment through:

Shared vision and understanding Both functions must understand how they complement rather than compete with each other. This starts with leadership clearly articulating distinct yet connected missions.

Coordinated planning processes Joint planning sessions help identify where efforts should be separate versus coordinated. Regular touchpoints prevent surprise conflicts.

Clear ownership boundaries Establishing which accounts or opportunities belong to which function prevents territorial disputes. Document these boundaries and revisit them regularly.

Complementary incentive structures If BD is incentivized only for direct revenue contribution, they’ll behave like salespeople. Design compensation plans that reward each function for their unique contributions.

Cross-functional exposure Having sales team members occasionally join BD meetings (and vice versa) builds mutual appreciation and understanding.

I once observed a SaaS company where the sales team felt undermined by partnerships the BD team created. The solution? They established a “partnership commission” structure where salespeople received credit for deals flowing through BD-established channels—aligning incentives and reducing friction.

TL;DR

While sales focuses on executing transactions and driving immediate revenue, business development creates strategic value through partnerships and new market opportunities. Sales operates on shorter timeframes with clearer metrics, while BD builds foundations for future growth through longer-term initiatives. Both functions are essential but require different skills, incentives, and management approaches.

As companies grow, these roles become more distinct and require careful alignment to prevent internal conflict. Understanding these distinctions helps organizations invest appropriately in each function and measure their success according to their unique contributions.

Q&A

Q: Can the same person handle both sales and business development effectively? A: In very early-stage companies, versatile individuals sometimes manage both functions. However, as organizations grow, the different mindsets and timeframes typically require specialization. The rare professionals who excel at both usually do so by context-switching between modes rather than blending approaches.

Q: How do compensation structures typically differ between these roles? A: Sales compensation usually includes a significant commission component tied directly to closed deals—often 50% or more of total compensation. Business development roles typically have higher base salaries with bonuses tied to strategic milestones like partnership agreements or new market establishment.

Q: At what company size should these functions be formally separated? A: Most companies begin to separate these functions between 10-25 employees, though this varies by industry. The key indicator isn’t company size but complexity of opportunities—when managing both transactional sales and strategic partnerships becomes too diverse for one team to handle effectively.

Q: How should startups allocate resources between sales and business development? A: Early-stage startups should typically allocate resources based on their go-to-market strategy. Product-led companies might focus 80% on sales, 20% on BD. Platform businesses might reverse this ratio. The allocation should evolve as the company grows and market opportunities shift.

Q: What’s the biggest mistake companies make regarding these functions? A: The most common mistake is evaluating both functions using the same metrics and timeframes. This pressures BD to focus on short-term deals rather than strategic value, undermining their unique contribution. Different functions require different measurement frameworks.

Quiz: Are You a BD Person or Sales Professional?

Answer these questions to discover where your natural talents might best align:

1. When approaching a new business opportunity, you prefer to:

• A) Identify the decision-maker and move directly toward a transaction
• B) Map the broader ecosystem and consider multiple potential ways to create value (Answer: A = Sales orientation, B = BD orientation)

2. You find the most satisfaction in:

• A) Closing deals and hitting targets
• B) Building frameworks that create multiple future opportunities (Answer: A = Sales orientation, B = BD orientation)

3. Your ideal working timeframe is:

• A) Clear short-term goals with definitive outcomes
• B) Longer-term initiatives with evolving potential (Answer: A = Sales orientation, B = BD orientation)

4. When facing rejection, your typical response is:

• A) Move quickly to the next opportunity and maintain momentum
• B) Reassess the strategic approach and consider alternative paths (Answer: A = Sales orientation, B = BD orientation)

5. Your colleagues would describe your greatest strength as:

• A) Driving toward closure and making things happen now
• B) Seeing connections others miss and creating unexpected value (Answer: A = Sales orientation, B = BD orientation)

Scoring:

• Mostly A’s: Your natural orientation aligns with sales roles. You likely thrive on clear goals, direct action, and tangible results.
• Mostly B’s: Your tendencies match business development strengths. Strategic thinking and relationship cultivation likely come naturally to you.
• Mixed results: You show versatility that could work in either function, potentially excelling in roles that bridge both areas.

Remember, neither orientation is superior—they’re complementary talents that organizations need at different stages of growth. Understanding your natural inclinations helps position yourself where you’ll make the greatest impact.