Whether you’re just starting out as an independent consultant, or you’ve been at it for a while, chances are SALES is always at the top of your priority list for building and maintaining revenue. But for some small businesses, independent contractors included, it may be helpful to understand the difference between Sales and Business Development Partnerships. (Or BizDev, if you’re hip to that lifestyle.)
But isn’t sales just a form of business development? Selling certainly does develop more business after all.
Well, kind of. But business development is more of an overarching strategy that involves different methods of selling, beyond just selling one-to-one. Here are some key differences that might help you decide which method is best for your services.
- Sales Process: Put simply, traditional direct sales involves closing deals directly with each customer, while business development focuses more on larger sustainable growth through strategic partnerships that connect you to new markets through the partners sales and marketing efforts. Strategic partnerships help put more “feet on the street” to generate new leads for your services.
- Quality/Quantity of Leads: In direct sales mode, you, as an independent consultant, are required to identify, qualify, contact, and close each potential client for your services. The quality and quantity of leads is directly tied to the amount of effort you put in to find new clients. When you find strategic partners or other aligned entities willing to promote your services as part of their existing business model, you benefit from their existing sales infrastructure and client base.
- Revenue: The pricing structure between direct sales and business development is pretty straightforward. When you sell direct, you make all of the profit. When a strategic channel partner is acting as a middle man, they’re obviously going to want some of that profit for themselves. Whether that is a commission, referral fee, or percentage add-on, your decision between the two approaches depends on weighing the amount of time spent selling vs. relative revenue generated. As an independent consultant who may have little or no outside costs attached to their services, a per project reduction in profit may be easily offset through a more consistent pipeline that requires considerably less effort on your part.
- Sales Rollercoaster: In a typical sales model, many consultants find themselves on a frustrating and sometimes terrifying ride, meaning that when you are working on a client project, you may not have the discipline to devote time to looking for your next client. So when the client project ends, you have a revenue dip until you find the next project. When working with strategic partners, a consultant is more likely to build ongoing relationships with the partner and their clients, which can keep the funnel full longer down the road but may also impact a solopreneur from fully managing their own workload and time.
- Length of Sales Cycle: While a strategic partner may provide longer term relationships, the business development model will almost certainly lengthen the sales cycle when compared to the traditional direct sales transaction.
Which method of Lead Gen is best for your business: Direct Sales or Business Development?
It’s worth your time to give it some thought. In your area of expertise, do you thrive more within short sales cycles, flexible schedules and project variety? You might be a salesperson! Or do you see your success lying in long-term, relationship-based revenue that requires less lead generation on your part?
Or is it a bit of both? Either way, it’s important to truly understand the differences between sales and business development and how each approach works within your area of expertise and work style.
As a member of Your Deal Source, we can act as a strategic partner of sorts, by introducing you to multiple clients who need your services. Or we can introduce you to another trusted advisor/strategic partner who you may team up with to sell services together.