Could Starting a B2B Company Be Right for You?
First of all, what’s a “B2B?” The acronym stands for “business to business.” It’s a business that provides goods or services to other businesses. Not customers (B2C). Shopify is an example of a B2B. They provide a service, not directly to customers, but to business owners so they can make websites. Customers don’t sign up for Shopify and buy Shopify products for their personal use. They search for stores that may be hosted by Shopify, but Shopify deals directly with the people running those stores.
Other types of B2Bs include:
- Producing raw materials for others to use in their products
- Wholesale suppliers
- Software for businesses
- Supplies or software for schools and government organizations
B2Bs are generally “middlemen” for companies. Think of paper napkins at a restaurant. The restaurant owners don’t make the napkins themselves. They probably don’t buy them directly from the napkin manufacturer, either. Instead, the restaurant owners likely shop at a B2B that sells a range of restaurant-related products, including paper napkins. The restaurant owners can buy nearly everything they need from one seller instead of having to buy each product individually. In this case, the restaurant owners are the “customer.” The B2B likely has deals with the manufacturers and wholesalers of restaurant products and then resells them. They can resell them at a higher price, which restaurant owners are willing to pay for the convenience of one-stop shopping.
B2Bs are one of the fastest-growing sectors of American business. Could starting one be right for you?
DOES YOUR B2B SOLVE A PROBLEM OR OFFER VALUE?
As with any other startup, there’s no point in reinventing the wheel. Entrepreneurship is all about solving problems. Do you have an idea for a B2B that will solve an existing problem? Or will offer a better value than the current system?
Most businesses want to make more money while spending less money. It’s that simple. You’ll know you have a solid B2B idea when you can offer another business a way to do something better or more efficiently:
- Make payroll easier
- Increase the quality of employee communications
- Make shipping products more streamlined
- Create an easier point of sales system for customers
Slack is a great example of a B2B that solves a problem and offers value. As more people started working from home in 2020, companies needed a way for everyone to communicate in real-time. Group emails and texts were fine, but there had to be a sleeker, more efficient way for everyone to stay in touch with each other. Enter Slack. With this application, companies could run their own Slack channels that included designated spaces for specific teams, concerns, groups, or even pet photos. As of 2022, over 10 million people use Slack daily, including nearly half of Fortune 100 companies.
TARGET A SPECIFIC INDUSTRY
Just like you need to figure out your target customer for your B2C, you also need to figure out your B2B target. And just as there are many different demographics to consider when finding your target customers, there are many different types of businesses you can work with:
- The medical industry, including clinics, private practices, hospitals, medical equipment suppliers, pharmacies, and health insurance companies
- Schools and other educational institutions, including tutoring companies, online learning programs, textbook publishers, and school supply manufacturers.
- The finance sector, including banks, investment firms, credit card companies, money advisors, and accountants.
- Gaming and esports, including video game designers, console manufacturers, retailers, event hosts, and teams.
Our advice? Pick your niche first and let your B2B ideas flow from there. Go with an industry you’re already familiar with or plan to pursue.
LEARN HOW TO SELL TO A BUSINESS
When you run a B2B, you’re not selling your product or service to individuals. The people who buy your products aren’t thinking about their personal wants and needs. You have to sell your product or service to the people who make decisions for an entire business. And yes, that business might be just one person! But in this case, you’re not selling them something for their private use. Business decisions are not the same as personal decisions.
What does this mean for you as a B2B young entrepreneur?
Once you have your target industry, do a little research and choose a few businesses that look like they could benefit from your product. Then, go further and find out who’s in charge of dealing with outside vendors. This might be the CEO themselves, or it might be someone with a title such as, “Vendor Manager.” Go to the company’s website or LinkedIn page to figure out your best “in.” These are called your “leads.”
After that, think of your sales pitch and marketing like you would for a customer. But in this case, the customer’s priorities can usually be summarized as:
- Spend less money
- Make more money
- Be more efficient
- Make customers happier
- Make employees happier
B2B STARTUP IDEAS FOR YOUNG ENTREPRENEURS
-> Content marketing
Write and design for companies. Businesses know they need to provide new content for their existing and potential customers. Be the person who writes blog posts or takes high-quality photographs for web pages.
->Social media producer
Yes, someone will pay you to make relevant and timely TikTok videos for them.
You already help your parents for free. Why not offer your services to businesses that need help navigating the ever-changing world of technology?
If you already have (or can invest in) a 3D printer or Cricut, you can sell your printing services.
Entrepreneurship is taking over the world. It seems like everyone has a small business of their own. You can cash in on this growing trend by creating a B2B that fills a need and helps other young entrepreneurs do better.
Think about it this way. During the California Gold Rush, it wasn’t only miners who ventured out west. The smart entrepreneurs of the time opened shops, restaurants, and inns along the way. They provided goods and services to those who were focused on their own “business” (finding gold). Be the person that other entrepreneurs can’t live without by starting a B2B!
Are you a Florida-based young entrepreneur looking for a college scholarship? Click here to learn more about how the Kantner Foundation can help you!