Until a few decades back, the biggest names in the startup ecosystem used to be companies that provided B2B services. The first customer that Microsoft licensed their BASIC program to was MITS of Albuquerque. The first Apple I unit was sold to a high school. Back then, entrepreneurs wet their feet in the B2B space before exploring the more voluminous B2C trade.
But thanks to the reach of the internet and social media, more and more business ventures are targeted straight at the end consumer. A game developer in the 80s would have required a tie up with a hardware maker for business. Today, a social media blast gets the work done. But is this simplicity and possibility to “get rich overnight” through B2C making people lose out on opportunities in the B2B world?
A common refrain is that B2B requires a lot more capital investment and has a larger barrier to entry. While it is not completely untrue, it is still possible to succeed in this space with minimal capital. Here is a short guide on how to go about it.
Trade Shows : Every B2B industry organizes its own trade shows to meet and connect with business prospects. Visiting such events will help you with several things – firstly, you can get a feel of what your future competitors do to get clients, secondly, you can build a database of potential prospects you can reach out to. Tools like DoubleDutch are used in trade shows across the country for you to connect with business entities who you can partner with. This experience should give you sufficient ammunition to plan your business strategy and potentially pick up prospects for your idea even before you get started.
Work On Distribution First : The high barrier to entry in B2B is a blessing in disguise. This is because once you get in, there are only a few competitors to take on and be successful. Unless you are working on a completely new product that does not exist, it is a good idea to work on distributing your competitors’ products. This way, you can build a relationship with customers even without investing on your own product. Once you build up sufficient cash-flow, you could slowly transition your customers to your own products.
Dropshipping : Marketing makes or breaks a business regardless of industry. No matter how great your product is, you may not be successful unless you get your marketing right. So before you invest a significant amount of money in making or stocking products, it is a good idea to explore dropshipping. Dropshipping is the process of shipping a product from the manufacturer to the buyer directly with no stocking. Building a successful dropshipping business will help you get your marketing strategies right. Once this is done successfully and you build a decent cash-flow, you can work on making the product yourself. This way, you can increase your product margins over time and thus build an even larger business.
A lot of entrepreneurs dismiss B2B businesses because they are “boring” or “not innovative enough”. Truth be told, this is where the money is and if you are someone looking to build a successful business venture, you better not ignore this goldmine of opportunity.