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So you’ve thought up a fantastic business idea that you think is flawless. You’ve run the idea past friends and family members and they all think that it’s a great idea. Even your old business partner and work colleagues think that it could work, so you decide to set the wheels in motion by approaching banks, hiring a few people and getting the word out there.
Sadly, things might not pan out as you think. Most people might realize that they’ve jumped into the deep end and failed because they underestimated what it takes to grow a business, while others might be troubled because they’ve realized that they targeted the wrong audience. Once such concern that many startups typically face is differentiating between business and consumer markets. Some startups find that while they initially target the consumer, their products might be better suited for businesses or vice versa.
One of the first things you should do if you come across this situation is to study resources such as the Mansfield B2B sales process to help you understand the differences between B2B and B2C markets. To keep things short, there are four main considerations that split the two approaches; decision making, prices, business relationships and sales experience.
Once you’ve learned the differences, you can start to identify which market would be more suitable for your business. With this knowledge in mind, you can start making better decisions that will lead to a more sustainable business.
Products that are economical and made to be sold in bulk should ideally be targeted towards the B2B market. This includes mass-produced items such as small electronic parts or even food items. You’ll find that if you can scale up your operations to produce more items, you’ll typically have more stock than you can’t actually sell to the consumer without having excess left over. It requires a vast network of contacts and sale points to shift large quantities of a product, so if you have the capacity to produce a lot of items, you may want to shift your focus to a B2B business model.
However, if your products take a lot of time, dedication and handwork in order to create, then you should focus more on charging for the time spent and marketing your products to reflect the time and effort spent perfecting your craft. It’s essentially all about comparing mass-production with handmade products.
It’s difficult to determine which is better for your business because it all depends on the products and services you sell and your ability to produce results. We recommend that if you have factories and overseas production involved, you should be looking at a B2B business model. However, if your business idea involves low-volume high-quality products, then it’s almost always better to aim directly for consumers unless you can offer something compelling to a business, such as offering bespoke industry-focused design or props that will be used in large-scale movie productions.