B2B businesses are among the most profitable. Businesses have larger budgets at their disposal than individuals and often require products and services on an ongoing basis. The profitable nature of having businesses for customers is attractive to many entrepreneurs, but how can you get your first B2B customers?
Selling to Businesses vs Individuals
A lot of business models are centered around selling to other businesses specifically. Examples include marketing companies and many different kinds of Saas businesses.
Other business models have the potential to work with both businesses and individuals. Examples of businesses that can be both B2B or B2C include cleaning services, catering companies, auto workshops and printers. The benefit of working with businesses rather than individuals, however, is that businesses are likely to send ongoing work on a regular basis.
A cleaning service might get hired to clean company offices on a weekly basis, for instance. Similarly, an auto workshop might get work to do ongoing fleet maintenance on business vehicles. Printers and catering companies might get once-off work from individual to print wedding invitations and prepare food – which is still a good source of income, but not ongoing. A business, on the other hand, will always have marketing materials to print and corporate functions to cater for.
Considering the benefit of B2B customers, even businesses with the potential to sell to individuals should market to business entities as well.
Turing Your Startup Ideas into a Profitable Business
There’s a good chance you’re sitting with a startup idea you haven’t acted on because you don’t know where to start getting customers. The difference between an idea and a profitable business is, after all, paying customers.
Or perhaps you already started your business on the side, but you’re struggling to generate enough income from it to make it your full-time job.
Whatever your current situation, your business will grow much quicker if you have B2B customers. B2B customers can offer you a better stream of reliable income than individuals.
But don’t get tunnel vision running after B2B customers. It can be tempting to offer a B2B customer a hefty discount because of the reliable income stream you expect to get. It’s okay to give loyal customers discount, but you’ll need to do some math beforehand.
Calculate How Many B2B Customers You’ll Need
First, calculate how much revenue you’ll need to run a sustainable business. Don’t forget to factor in all your business expenses, as well as taxes. A lot of entrepreneurs mistakenly forget to factor in taxes when calculating how much revenue they need. If you’re unsure about what you’ll need to pay in taxes, consult a tax professional to get an idea of your tax liability based on your income.
Knowing how much your business will make after tax will help you make accurate calculations. You can then proceed to calculate how much of your product or service you’ll need to sell to be sustainable.
With some business models, it’s easy to estimate how much a customer will be worth. With others, this can be much more complicated. To start out with, you just need to know how much you need to make to be sustainable, then reverse-engineer approximately how many B2B customers you’ll need to make that amount.
If, for instance, you run an office cleaning service and you charge a monthly rate between $500-$1500 for an office (depending on the size), your average B2B customer might be worth about $1000 monthly. If you need to make $15,000 to run a sustainable business and cover all your expenses, you’ll need about 15 B2B customers.
At first, calculate how much you’ll need to sell at your standard rate. Once you have a prospective B2B customer, consider if they will provide you with enough ongoing income to qualify for a discount. If not, don’t offer to give them one. Businesses often have more budget than individuals, so they might not expect a discount anyway.
How to Get Your First B2B Customers
Only go look for customers once you know how many you need and what you must charge them. Knowing this information will help you have a clearly defined goal to work towards. It’s no good getting ahead of yourself and onboarding customers when you aren’t charging them enough to be sustainable.
Once you’ve got a goal to work towards, follow the necessary steps to get your first B2B customers.
1. Define Your Target Customer
Every entrepreneur has heard this advice, so it’s nothing new. Despite that, a lot of entrepreneurs still don’t know how to accurately identify profitable target customers.
There are a few things to consider when identifying who to target as potential customers:
- What business is most likely to require your services?
- What businesses will be easier to sell to?
- What businesses will have enough financial resources to spend on your product or service?
- Will your product or service be fundamentally important to the operation of these businesses?
For example, if you run a printing shop, you might target all businesses. Most businesses could use pamphlets, so you might end up casting your net too wide when approaching potential customers.
In this case, take a step back and ask yourself, what businesses might need a lot of printed materials? Surprisingly enough, it might not be businesses in need of only corporate materials. Events planning companies, for instance, might have regular work printing event invitations and plans, which could include personal events like weddings and baby showers. Apart from this, they might also have regular work for printing event banners and advertising posters.
Event planning firms could make good customers for printing businesses because your service would be a fundamental part of what they do. Getting printed materials is a service they’ll always require. They’ll have lots of work from their different clients, so one event planner might bring in the same amount of business as 10 other customers combined.
Identify what kind of business could be the same kind of valued customer for your startup, then approach these companies first when prospecting.
2. Identify Your Selling Points
Once you know what businesses to approach, think about how you’ll sell your product or service to them. What is your business’ main selling points? A selling point can be anything that helps your business stand out above the rest.
If you run a cleaning service, it could be that you use environmentally friendly cleaning agents, for instance. Environmentally aware businesses would appreciate this thought.
Or, perhaps your main selling point could be that you offer your services after hours. If you’re looking to target offices, many customers might like the idea of getting cleaners to come in after their employees’ head home. No noisy vacuum cleaners disturbing employees while they work, or areas left uncleaned because they were being occupied by working employees.
Whatever industry your business serves, make sure your target customers will value your selling points. There’s no point in using selling point that won’t arouse interest from prospects. Explain why your selling points are valuable and how they solve a problem your competition doesn’t cater for.
Don’t Be Too General
When coming up with selling points, there are a few common ones that businesses use. Some examples include:
- X Years’ experience in our industry!
- Fully licensed and trusted service.
- Exceptional service and friendly staff.
These aren’t bad selling points in all cases, but many startups can’t brag about their industry experience.
Plus, these selling points are generalized. Your prospects have heard them before – probably more than once too. Any business can claim to have “exceptional service and friendly staff”, but this doesn’t always mean it’s true. A lot of businesses who claim to have friendly staff will inevitably have bad service and rude staff.
It’s not to say you can’t use general selling points at all, but you need to combine them with unique selling points as well. A unique selling point can often add credibility to more general ones.
3. Try Cold Calling or Emailing
It can be scary to make phone calls or send emails to businesses you have never contacted, but don’t let this put you off.
Once you have your selling points, write a professional cold email or some cold calling scripts. You don’t need to follow your cold calling scripts to the T, just have some notes on hand for reference. Also anticipate common questions your prospects might ask, and have a summarized answer ready in writing.
Alternatively, you could also visit potential customers at their location (if it’s open to the public) and hand out a business cards with a short 2-minute brief.
4. Contact the Right People
Contacting the right people can make the difference between whether you get interest or get shrugged off. Especially if you’ll be approaching bigger businesses, make sure you get through to the right person.
The right person to contact will be someone who has the authority to make buying choices regarding your product or service. If your business is somewhat technical, they also need to be someone who will understand the technical advantages of your product or service – someone who will be able to appreciate your superior product or level of expertise.
LinkedIn can be a great place to source the right people to contact. As an added benefit, it’s also a great place to reach out to these people about your product or service.
Compile a list of businesses and individuals to contact, then start making cold calls and sending emails, or connecting with people on LinkedIn.
A lot of online business advice instructs entrepreneurs to inform their personal network of their new startup. This could help in some cases, but in most cases your existing personal network won’t be enough to bring in enough customers. That’s why networking is an important step in growing your business. With enough perseverance, you should get your first B2B customers soon!