Most businesses cater directly to consumers. However, some of the most lucrative endeavors supply or service businesses. The business-to-business model is more stable than business-to-consumer, and smart entrepreneurs are shifting their focus.
The Limitations of a Consumer-Centric Business
Most businesses rely on the patronage of their community or other customers/clients who find them over the internet. While catering directly to consumers certainly has its perks, it is also vulnerable to the whims of the market. Unforeseen circumstances can change market forces and consumer-based ones are one of the most vulnerable. Sales are not consistent and a windfall in one month can turn into a stroke of misfortune in the next. Most businesses will have problems once they encounter a dry spell of more than two to three months or if the local government decides on another lockdown.
The more successful business-to-consumer models are franchise-based, relying on an established brand’s experience to remain afloat. Starting a new business from scratch can be risky, and most entrepreneurs take losses during their first few months — or even years — of operating.
Targeting Businesses
Instead of targeting individuals, businesses can also cater to other businesses. One good example is a farm that supplies groceries. While the farm can sell their produce themselves, it will take more effort and there is a risk that everything might not get sold. However, if it sells to a grocery, most of its produce can be sold in bulk, guaranteeing a steady supply of money. Services are also better off targeting businesses. A cleaning service will flounder if it only caters to residential homes, but one corporate contract can put it in the black for years.
Of course, catering to other businesses requires stricter protocols. Because most purchases will be in bulk, uniformity and consistency are essential. Your profit margins may decrease, but the higher volume should more than make up for it. A set number of orders every month also allows you to adjust your stocks accordingly and reduce wastage. Opt for businesses that purchase outright and don’t go for just consignments. A reliable business partner should be confident in selling your wares for a profit; otherwise, the risk (by agreeing to a consignment deal) is too big.
Expanding Your Network
The business-to-business model is one of the most stable. However, catering to the needs of existing businesses or large corporations will require the right connections. Schedule meetings with the necessary people or have digital marketing companies assist you with some of the legwork involved. Getting help from marketing companies should open doors for your business. They can connect you with other compatible businesses or even large corporations. Of course, you still need to do some work on your own. A good online presence is a good start, and your own website can give potential clients a glimpse of what your company can provide and how it operates.
Business-to-business dealings are stable and reliable. Sales or contracts are set, eliminating the unknown variables that come with catering to the consumer market.