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One of the first things you need to do, when you have started your business, is to find people who may be interested in your company's products or services. They are your prospective customers. Gathering a database of these prospects is the initial step in a sales process.

Therefore a "lead" can be defined as a raw prospect who might be interested in purchasing from you, but you don't know for sure, until you follow-up with them further. 

There are a number of sources through which a lead can be obtained: campaigns, emails, your company's website, trade shows, etc. Once a lead is generated, the company's sales rep conducts follow-ups and the lead could eventually get converted to successful sale.