I started my career in sales and have tremendous respect for sales professionals. It is a craft and I have been fortunate enough to work with some true pros. I have also spent years in business development and each role can play a vital role in your company. So what is the difference and which one is best suited for your company?
I hesitate to say BD is long term and sales is short term because it leads to confusion. Some BD deals are near term and some sales cycles are longer term and asking one team to hand off a deal all too often creates tension in an organization.
In general, business development will identify and create partnerships that create leverage for driving revenue, distribution or enhance the product and business development often is a company evangelist.
Sales is focused almost exclusively on driving revenue and the same thing applies when hiring a sales leader for an early stage company versus a more mature organization.
The sales team is in front of end customer (who is paying for the product) whereas the BD team often works with the partner who owns the direct customer. Designing a compensation program for each is tricky – you want to avoid conflict for who gets credit on a deal and provide the right incentive for your long term business.
A variable compensation program will drive performance regardless of BD or sales. If you are not sure you are ready to incentivize a particular type of deal structure (e.g. proving or product offering) it is best to hold back and find a pay plan you and your BD or sales lead can live with for an agreed period of time.
Much of this aligns with the stage of company, if you believe your company is at the Scouting or Testing stage it is likely too early to put a commission or bonus plan in place. These types of plans do well in the scaling stage and a solid sales leader will provide good insight on designing a program and making necessary adjustments along the way.