4 points to keep in mind when starting a B2B business

December 29, 2021

Starting a B2B business

Thanks to the internet, it’s both easier and harder to start a business today than ever before. You need very little to get up and running, and you have a global reach. However, everyone else has the same advantages, so you need to make sure that you are poised for success from the start. In addition, there are aspects of running a B2B business that can give you an advantage over entrepreneurs who are starting up B2C companies, but again, it’s other B2B organizations that you are competing with. The points below can increase your chances of success in this industry that’s full of both opportunities and challenges.

4 important things to pay attention to when starting a B2B business

The benefits of owning a business on their own can be motivating enough to get you going and make the jump to entrepreneurship. Of course, along the way you will make a lot of business mistakes and bump into some common myths of entrepreneurship which if you are not careful, may prevent you in reaching your goals. Here are some points to have in mind when you are starting a B2B business.

Personal finances

There are several good reasons to organize not just your company but also your personal finances. If you’re depending on this business for your income, it’s important to know exactly how much income you need. If you aren’t yet depending on it, you still need to know what it would take to cover all of your regular expenses. 

You may also be a more attractive prospect to some lenders and investors if your own personal finances are in order. If you want to look at ways to lower your personal monthly expenses as you get your company off the ground, you could see about refinancing some debt, such as your student loans. By refinancing student loans with a private lender, it can mean paying less each month, which you can put toward savings or other expenses.

Use your advantages

There are advantages in a B2B environment that you can make the most of. This is very different from marketing to regular customers, and there are weaknesses among many B2B companies that you can improve upon to set yourself apart from the competition. First, in general, you will face less competition than if you were a B2C enterprise. Despite the less crowded playing field in the B2B sector, disruptive startups tend to focus on B2C, so if you can introduce innovation into what you do, you may already be ahead of your competitors. 

Another advantage of B2B over B2C is that regular customers are often looking to get something for the lowest price possible or even for free. In the B2B sector, companies will pay for what they need, so your job is to figure out what that is and provide it. Yet another element that can work in your favor is the fact that many of your competitors neglect one of the most important parts of marketing, which is getting to know your customer and what they need. In particular, knowing their budget and buying cycles will be useful. The strategy of simply building something and hoping customers turn up may work a little better here than it would in the B2C world, but it’s still not the best or most reliable way to ensure that you get the kind of performance that you want.

Things happen slowly

In the B2C area, people may impulse buy even big-ticket items. However, they certainly don’t need, in most cases, to go back and consult a committee before they can make a purchase. With your B2B company, you’ll need to be prepared for the fact that nothing happens quite as fast as you might like it to. Other companies have a process for choosing and purchasing their products, and it will take them exactly as long as it takes. You can’t really speed it up, so you’ll need to make sure to build these processes into your business plan.

You’ll need a plan

You still do need a business plan just as you would with any other startup. This is where you can flesh out your understanding of how things work in the B2B world. This can be created through traditional pen and paper, with apps aimed at entrepreneurs, or a combination of the two. 

For example, your prospects may be more limited, in the thousands, hundreds or even dozens compared to what you might aim for in a B2C context. While customer loyalty and relationships are important to many different types of businesses, this is less true for B2C, where a business can thrive in some cases with a lot of quick one-time sales. 

In contrast, while starting a B2B business, you may spend a long-time cultivating leads in order to build an ongoing relationship with a buyer. This is offset by the fact that you will tend to sell either larger volumes to a single business or a higher caliber of services that you can charge for accordingly. All of these considerations need to make it into your business plan along with the usual considerations, such as how you will finance it and what your organizational structure will be. Moreover, this plan is important even if you aren’t looking for loans or investors or never intend to because it can help you be more concrete about what you hope to do and identify any potential weaknesses.

Conclusion

In the B2C area, people may impulse buy even big-ticket items. However, they certainly don’t need, in most cases, to go back and consult a committee before they can make a purchase. With your B2B company, you’ll need to be prepared for the fact that nothing happens quite as fast as you might like it to. Other companies have a process for choosing and purchasing their products, and it will take them exactly as long as it takes. You can’t really speed it up, so you’ll need to make sure to build these processes into your business plan.

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