B2B Factors to Consider When Writing Your Business Plan
When you create a business plan for a B2B (business-to-business) transactions company, you must think about several things that you wouldn’t usually focus on when writing a plan for a B2C (business-to-consumer) transactions company. Besides the obvious, B2B companies have alternate methods and strategies than that of a B2C organization. Compared to the marketing, online portals, and payment schedules of a B2C company, B2B businesses have alternate methods and strategies. You need to show that you up-to-date with the realities of the B2B marketplace by highlighting the differences between the two in your business proposal.
For beginners in knowing the differences between B2B and B2C, businesses normally buy items in bulk instead of how consumers buy them as required. These two markets differ greatly in size as B2C hosts several million customers while B2B only have several hundred or thousand. Though it’s a much different quality, this tends to form a more direct, personal sales relationship for B2B companies. This is important because building lasting relationships with clients is crucial for B2B companies and most of the marketing strategy is based on that. For example, Apple might advertise their iPhones on television ads while HP receives more attention by trying to sell their enterprise-level servers through sales and direct marketing.
In order to better connect with suppliers, your company may need more assistance with streamlining the process. For example, you might have to utilize an electronic data interchange (EDI) feed allows businesses to exchange data about things such as inventory, payment and billing information, or a method of creating invoices. If your go-to supplies vendor uses EDI, you will probably have to either implement the program or start searching for another vendor.
Online B2B Marketplaces
Every B2B marketplace allows companies from around the globe to network with one another. Some websites, such as AllActionTrade.com and TradeKey.com, allow businesses to offer trades and communicate with a multitude of distributors and consumers from all over. Depending on what you require and the avenues you’re willing to take, you can very well raise profits or reduce your costs of supplies by utilizing sites like these.
The Decision-Making Process for Buyers
Decision-making is more complex in the B2B sales process, which is why projects need validation from the company CFO’s approval. This often it comes before any money is allowed to be spent on a project. Additionally, expenditures are based on the company’s needs and return on investment (ROI) while consumers aren’t factored in to the decision as much. This can help to provide somewhat of a buffer when it comes to the margin of error in any financial analysis. You must also keep in mind that this is when the confidence of your product and your ability to explain its value factor in. If you can’t explain to a few people the useful and unique qualities of your business, the outlook of selling to the B2B is grim.
While customers pay for their product upfront, businesses usually get a type of credit that allows them to make staggered payments to compensate for the timeframe of awaiting a completed transaction. One of the common kinds of trade credit is Net 30, which allows buyers up to 30 days to pay their bill in full.
Keep in mind that if you use Net 30 with your consumers, you must be sure that you’re capable of meeting the agreement to your distributors in that passing month. To ensure that you follow up to your obligations, you should always be aware of how your accounts payable and receivable charts look in comparison to each other.
The Effect on Your Business Plan
Everything discussed in this article must be considered when compiling a business plan, with our without any outside professional assistance. Online marketing specialist, David Meerman Scott, explains that, “It’s fascinating how the fundamentals of business-to-business marketing are the same today as they were 50 years ago. It’s still about relationships although today we have new tools and techniques at our disposal.” Systematically, if your business plan sounds like it belongs in the plans of a B2C company, investors will lose faith in the possibility of your business’s success. Although, if you can study and use B2B tactics and incorporate it into your business plan, it will definitely increase your chances of getting approval.