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You’ve got a fabulous idea for a new business but are unsure about which business model you should work with. We take a look at B2B vs B2C to help you decide if selling to customers is right for you, or you’d prefer to sell directly to other businesses instead.

What Are the Differences in Selling B2B vs B2C?

You are in business to sell your products or services and make a profit. You’ve got two choices when doing so: sell to the consumers who are the general public or sell to other businesses who will either resell your products or use them to make their products.

Depending on the products you sell, this decision may already have been taken away from you. For instance, if you sell pulp for papermaking, you are most likely going to sell to another business who can turn that pulp into paper. If you sell baby clothes though, you’re probably going to sell directly to your customers.

Let’s take a look at the main differences between both of these business models.

B2B or Business to Business model:

  • selling your product or service directly to another business
  • often requires large product quantities delivered on a set date
  • requires a long-term relationship between you and your buyers
  • involves more people in the buying decision and process
  • possibly selling your product at a lower price than a consumer would pay for it
  • less of a lead pool to grow to purchase your product or service
  • requires in-depth knowledge about and sharing of your product or service
  • a more complex and involved selling process
  • payments are often received a month or later after product/service delivery

B2C or Business to Consumer model:

  • selling product or service directly to individual customers
  • wide lead pool to target and sell to
  • top price for your product/service paid by the customer
  • small quantities sold at a time
  • fewer people involved in the buying process
  • short relationship with customers
  • customers interested in benefit to themselves
  • instant payment upon purchase
  • easier to sell to individual customers than large corporations

As to which path your business should take, it comes down to whether it would work for what you sell and if you are happy to sell that way. Remember though, that both business models will still require the standard business considerations: a website, good bookkeeping and financial management, a business plan, cashflow management and outsourcing. The good news is, we can help you with all of those! Get in touch with our team today to arrange a chat about your business and how we can help.

For many small businesses, the best way to increase profitability is to increase turnover, as there’s no limit to sales but there is a limit to how much you can reduce your costs.

Let’s look at how you can focus on each of the five ways in our profit increase calculator to achieve your goal of improving profits.

Increase Your Leads

By interacting with greater numbers of people, you’ll increase your chances of turning more consumers into customers – or at the very least, having them lead you to potential customers.

For example, if you own a convenience store and you can come up with some attractive signage out front to get more people into your store, you’ll increase your leads.

So what can you do to increase leads or make more people aware of your business? A few tactics you might consider using to increase your leads include:

  • Advertising – set a budget and increase how much your business is promoted.
  • Direct marketing – work out your target audience and market directly to them via email.
  • Network – attend industry events and conferences to meet potential customers. These may be moved online for the meantime.
  • Create a website – to open online and international opportunities.
  • Develop new distribution channels – think about using agents, licensing your goods, or using new distributors.

Convert More of Your Leads into Customers

How many potential customers walk out of your store, leave your website, or inquire about your services without making a purchase?

Just imagine if you could convert 10% of those people into customers. How many extra sales per day would that be?

A few tactics you might consider using to convert more leads into customers include:

  • Arrange training for employees – on sales conversion and sales closing methods.
  • Personally attending a sales training course.
  • Running demonstrations – for potential customers to see what you have to offer and how they could benefit.
  • Highlighting the benefits of your goods or services – through promotional material, your website, blog advice, social media platforms, and free trial offers.
  • Preparing incentives – for your staff to offer to potential customers, hopefully encouraging them to purchase.

Increase the Number of Items You Sell per Customer

If you can entice your customers to buy just one more item from your business each year, your sales (and hopefully your profits) will increase.

A few tactics you might think about using to increase the number of items you sell to each customer include:

  • Widening your product range – by asking customers what else they would be interested in buying from you.
  • Bundling products and services together – like adding after-sales help to certain products.
  • Increasing capacity and capability – for example, purchasing extra equipment to increase your capacity while hiring additional staff to enhance your capability.
  • Researching your competitors’ offerings – to find product or service opportunities.

Increase Your Average Sale Value

Can you come up with some ways of increasing the average value of each sale you make? Rather than hiking up prices, see if you can increase prices by small margins (like 1-3%) or find ways to sell higher-priced items more often.

A few tactics you might think about using to increase your average sale include:

  • Training your staff – so they’re confident offering complementary items and upselling more expensive goods.
  • Increasing prices across the board – would your customers notice a small price increase? Consider informing them and trying it, as the extra money will go towards your bottom line.
  • Advertising your higher-valued products or services more often.
  • Developing a premium product or service – and encouraging your regulars to go for it.

Increase Net Profit Percentage

A few tactics you might try to increase your net profit percentage include:

  • Identifying and monitoring your top five expenses in your budget reports.
  • Finding out where you can make savings and reduce costs.
  • Concentrating on higher-margin services or products.
  • Looking into alternative suppliers with cheaper supplies.

Review these five ways of increasing your profits at least every year. In the meantime, plug some figures into our profit increase calculator to test what you could change and the effects of those changes on your profit.

By using simple, practical steps, you can improve your business’s profitability. Chat to us to find out more. Click here to book a free chat with an MBP Business Partner.

At a time like this, money is tight for pretty much every business. Cutting costs can be a quick and easy way to improve the profitability of your business. Introducing well thought out cost saving tactics can bring immediate savings and ensure you remain profitable in the short term.

But it’s important that cost-control measures are carefully managed. Eliminating errant expenses is clearly beneficial, but indiscriminate cost-cutting could lead to a drop in quality, or poor morale if staff fear being made redundant or are not given the tools they need to do their job efficiently.

This risk is heavily reduced by identifying where you can safely trim costs, setting clear cost-reduction targets, and researching any cost saving tactics before making changes to your business.

Planning Effective Cost Saving Tactics

The first step towards reducing costs is identifying your major cost areas. These are likely to include:

  • Production
  • Purchasing
  • Sales and marketing
  • Financing
  • Administration
  • Facilities maintenance.

Start by assessing your profit and loss statement for the last six months and rank all your expenses from highest to lowest, working your way down the list and identifying areas where you can reduce costs. It’s a good idea to first focus on identifying cost-saving measures in areas where you’ll see the biggest return. For example, it’s smart to work toward saving 5% on a $200,000 expense rather than a slightly higher percentage on a lower-cost expense.

Trial New Ideas

You might find it’s difficult to anticipate savings without actually implementing new systems and processes. Remember that any changes you make don’t need to be permanent. If you aren’t sure if a cost-saving measure is suitable for your business, consider trying it for a few months then assessing the results. This way, you’ll soon get an idea of the real cost savings without having to commit long-term to new processes or changes.

Any new processes or systems should be benchmarked and frequently revisited to ensure they are still suitable for your business. Consider asking staff for feedback around any changes to make sure there are no hidden problems that could be costing you more than the cost-saving value.

If you are in doubt about any potential changes, ask an advisor. We are more than happy to chat through this with you.

Quick Savings

You might be surprised to find that significant savings can be made without having to worry about your quality and affecting performance. Here are the most popular ways to trim costs without making radical changes.

  • Eliminate unnecessary costs – start with waste reduction, heating costs, and utility charges.
  • Reduce inefficiency by identifying manual tasks that could be sped up with technology or completed less frequently.
  • Avoid frequent, small orders that cost more than larger orders and take additional time to complete.
  • Reduce travel expenses by booking air travel earlier and using cheaper accommodation on business trips.
  • Find alternatives to high-priced suppliers or negotiate better payment terms or discounts on purchased goods.
  • Revise your credit policies to encourage prompt payment.
  • Brainstorm quick cost savings with your staff – they might have some useful suggestions you may have overlooked.

Significant Savings

Once you have identified your major cost areas, you may want to investigate potential ways to save money by changing existing processes.

Some of the most common opportunities are listed below, but before adopting any changes you should be aware of any potential damage to your core business activities.

  • Cut payroll costs by outsourcing non-essential activities.
  • Redesign your existing processes to eliminate duplication, and cut time wastage.
  • Make use of current technology, or latest industry thinking.
  • Agree to long-term supply contracts, or guarantee a minimum purchase amount to secure better terms.
  • Trim back or revise your current product offering and remove poor-performing products.
  • Form strategic alliances with other businesses to buy larger volumes.
  • Consider subletting office space, or relocating to a more cost-efficient location.

There may also be other costs such as long-term, fixed-rate business loans or fixed-price contracts for raw materials that you may be able to reduce when these are up for renewal or tender.

Pitfalls to Avoid

Reducing costs can have a negative effect, so you’ll need to be sure that changes will not compromise your operational performance.

Some common pitfalls include:

  • Over-dependence on one supplier could put you at risk if your supplier fails.
  • Reducing your marketing budget could affect your marketing strategy.
  • Tighter control of business finances could leave you without a safety margin if cash flow becomes tight.
  • Cutting short-term costs such as training, research, and development, or advertising can lead to long-term weaknesses.

Employee Costs

Reducing employee-related costs is generally risky and counterproductive in the long-term. Reducing costs such as staff training or meeting times could lead to poor staff morale and reduced productivity.

Changing an employee’s terms and conditions can also create legal issues in some circumstances, so it’s always a good idea to get expert advice before making a decision. Making employees redundant could bring short-term costs and the risk of possible employment proceedings. It may also contribute to low morale.

These problems can be reduced by maintaining clear communication with employees. Introducing cost saving through improved practices and procedures will require a degree of employee ‘buy-in’ so it’s important your employees are aware of why you are making changes. Employees may need additional training and support over these periods.

Next Steps

  • Schedule a staff meeting to review your costs and brainstorm possible saving measures.
  • Commit to an ongoing cost-control and monitoring process (or delegate to key staff to manage the process).
  • Ask our advisors to assist you with cost-saving initiatives or brainstorm ideas.

Please get in touch with us to find out how we can help you to identify and implement some cost saving tactics. Click Here to book a free chat with an MBP Business Partner.

If you’re considering a business rebranding, you’re likely to have multiple reasons as to why you are likely to take this path. Whatever your reasons, business rebranding isn’t something that just happens overnight and requires identifying the specific reasons why a rebrand is necessary. Some of the main reasons business owners move to rebrand include:

  • repositioning their business to target a new audience or be more appealing to an existing audience
  • branching out to a wider international-based audience
  • updating an old outdated image
  • moving away from a bad reputation
  • a merger with a new company or having new directors join the business
  • making your business stand out from other similar ones

Once you have decided to rebrand, you’ll need to decide upon a rebranding strategy. From here, you’ll need to follow the steps necessary to make the transition from old to the new brand. We’ll cover both points in this article.

Choosing Your Business Rebranding Strategy

You’ve decided to move forward and begin rebranding. To begin this journey, you first need to decide on your rebranding strategy.

  • partial rebrand – more like a subtle image change, a partial rebrand is mostly a visual change to meet the needs of your business and target audience.
  • full brand – a complete reworking of your brand, from the values and mission statement, the products or services you offer and the way the brand looks.

You can involve your target market in this decision. Ask them what they like and don’t like about the brand as it is today. Having an understanding of what they think is incredibly useful!

Of course, the option you end up choosing will depend upon the main reasons you want to rebrand. Once you’ve made your choice, next comes the rebranding steps themselves.

Steps When Undertaking a Business Rebranding

There are five key steps we’re going to individually walk you through when it comes to rebranding your business. They are similar to what you would do when establishing a new brand, which in essence is what a rebrand involves:

Identifying your brand’s target market and audience.

You’ll need to re-establish exactly who your target audience is and where they hang out. Undertaking surveys, observations, competitor analysis and simply identifying who is buying from you will give you the information needed to do this. Nail out your new buyer persona, which includes details such as their age, income, location, likes and dislikes. This information will help you when creating content for your website and social media platforms.

Defining what your business’ mission, values and vision are.

Here you’ll redefine exactly what your business stands for. Why do you do what you do? How will you do it? What are the reasons behind the way you do things? Included in this section is your brand voice. This includes the words you’ll use, along with your tone of voice.

Choosing a new name for your business.

One of the hardest things people find to do is naming a business. You likely spent a considerable amount of time choosing your original name and now need a new one. When brainstorming a new business name, think about making up a new word, changing the spelling of an existing word, using an acronym, combining words or stating what you do. Make sure to check your business name using OneCheck for existing trademarks, domains and social media accounts too.

Coming up with a new slogan for your brand.

A slogan is a catchy little phrase associated with your business. If your old slogan still fits, then keep it. If not, brainstorm ideas for a new one. Think about making a claim, providing instructions, being metaphorical and including compliments within your slogan.

Building your brand’s identity from bottom up.

Here we are talking about your brand’s visual identity. Your logo, colour palette, fonts and imagery are all things to consider. Using the services of a graphic designer here will pay dividends, as they will be able to use all of the information you gathered in steps 1-4 and transform it into a brand guide for your business.

It is often this step which business owners find the easiest out of the entire rebranding process. You have learnt about what worked and what didn’t with your old logo and colours, and usually have a clearer idea of what you do want. In short, look for a logo which is clear and easily recognisable as yours. The colour palette needs to be chosen based upon what your audience would best respond to and is appropriate for you to use in a variety of manners. The fonts need to work with your brand’s voice and vision, and finally, the shapes and imagery need to help tie everything together.

Where to Next in Your Rebranding?

For many total rebrands, everything a business presents to the world needs to be updated. Website, email, social media and contact details all need to be changed and promoted. This can cause a huge issue if your existing audience didn’t know about your rebrand. That is why it is a great idea to keep them in the loop, helping them feel like a part of the change itself, so it isn’t a huge shock when it happens. It will also keep them informed about the changes your business is making, how these changes will benefit them and how to contact you moving forward.

Don’t forget to also include your employees and contractors in the process too. They can act as brand ambassadors, letting people know about the changes on your behalf. They’re also going to feel included and continue to show brand loyalty as they feel involved in the process.

Then it is all systems go when it comes to promoting your new business. A new website domain name will mean that your organic traffic will be almost non-existent at the start. You will need to put considerable effort into the content of your website and can expect to see searches from Google appearing in around three to six months. You can redirect your old domain name to your new one though so that people entering that one will automatically be taken to the new site.

Promoting your rebrand via social media is key, as you will most likely be able to continue to use the same platform accounts. Sending emails to your existing email lists is also a good idea, and paid advertising can help too. If you have kept your followers engaged and updated during the rebranding process, it shouldn’t be too hard to shift their attention to your new brand.

Finally, make sure that you’ve told your suppliers and businesses whose services you use that you have made the change. A phone call gives the personal touch and is appreciated, especially when followed up by an email which includes all of the new details.

If you are on the fence about undertaking a rebrand, a chat with one of our business advisors can help make things clearer and identify a path moving forwards for you and your business. Get in touch with our team today and together we’ll make things happen.

You’ve most likely heard of the term niche market before. Often business owners are asked specifically what theirs is by business advisors, accountants, financiers and other owners. What we’ve found though, is that there is a reasonable amount of owners who still haven’t identified their own, or have little understanding of what the term means.

Let’s give you an example. Jess runs her own business selling handmade baby clothing. From merino baby coats through to cloth nappies and baby bibs, it is certain she is working within the baby clothing market However, this is a wide market with many variables, and what she should be focusing on is one specific aspect of that niche market. This will narrow her focus within the baby market, but allow her to specifically tailor her marketing, manufacturing and messages specifically to her target audience.

To help you find and dominate within your niche market, we’ve put together this handy article.

What is a Niche Market?

A niche market is a small specific part of a larger market. It is a gap in the competition, something that no one else is targeting or can target as you can. Your USP or unique selling point targets a highly refined customer audience, and this forms a big part of how you find your niche market. For instance, your target audience will need to have either a large potential for growth as well as a significant amount of market potential.

Like most businesses, the chosen niche tends to be a passion of the owner of the business. They often have an interest in a specific industry or experience within it. For instance, a person has always enjoyed gardening. A sudden redundancy has allowed them the opportunity to start up their own business and they’ve chosen to focus upon the plant industry. They are tending to lean towards the growing of plants from seeds rather than opening up a nursery, on-selling to retailers and not the general public.

How to Find Your Niche Market

You’ll already have identified the broad market you want to target, be it women’s shoes or gift baskets. What you need to do is narrow this down further using five key points:

  • Price – will the product be low or high priced? Does it need to be regularly discounted?
  • Quality – will it be a handmade product, mass-produced, premium or economical?
  • Location – will the product be marketed in a certain country or city?
  • Demographics – what is the age, income level, education and gender of the target market?
  • Values – what morals, values, attitudes and interests does the target audience have?

In the case of Jess and her handmade baby clothing, she used the five key considerations above and further narrowed down her niche to merino baby booties. She will now have the clarification she needs regarding her niche to be successful:

  • Price – mid to high priced booties, no discounts.
  • Quality – handmade in small batches.
  • Location – New Zealand wide, mainly in large cities
  • Demographics – tertiary educated, double-income families, female
  • Values – like artisan products, limited editions and one of a kind products

From here, Jess can take this information to adapt the content on her website, where she advertises, the social media platforms she targets, as well as the manufacturing and pricing of her products.

Then next comes the creation of a business niche or niche strategy to help your business take over the world or your specific target market that is. As well as identifying your target market and the unique selling proposition you can provide, you’ll need to research and understand your target audience intimately, create a business plan and start marketing to them. This moves us on to the world, or rather niche domination.

How to Be Successful Within Your Niche Market

Having identified your niche market, then now is the time to put all of your hard work into play. Of course, if you have not been thorough enough, now is also the time you’ll find out and may need to head back to the niche identification stage.

Assuming everything is all good with your work though, you’ll be able to start marketing within your identified niche. You’ll already have an advantage that the big players don’t have, and that is a highly targeted audience. It is to them that you will consider when making every decision you now come to. This means you’ll need to:

  • Identify the best ways to communicate with your market. Do they want face to face contact, or would they prefer using social media or emails?
  • Instigate a solid communication strategy with your target audience. Trial and error, surveys, questions and asking for feedback will help you identify what works best. Then once you’ve nailed it, it is important to set a regular schedule for communication with them and let them know what it is.
  • Offer products which you know your target market will want. Remember you want to be highly specific here. You can’t provide the enormous selection the big players can, but you can be very narrow in your offerings to your great advantage. Customers who want exactly what it is you are selling will want to deal with you because they can get what they want when they want it.
  • Keep growing and seeking advice. No business is an island onto itself. Asking for support from a business advisor can help keep you on the right path, solve issues as they arise or help hold you accountable for following your business plan.
  • Be a real person. This means making a personal connection with your audience, moving away from being a faceless name and instead be someone they can relate to.
  • Be accessible. Provide exceptional customer service, tailoring the ways you do things to meet the needs of your audience. Take the time to ask for and respond to feedback, as well as utilising the optimal communication channels.
  • Market your business. Having an excellent understanding of your target market, you’ll be able to run the most effective advertisements in the right locations for best uptake. Make sure you can keep an ROI for all marketing promotions you undertake, as these will ensure your money is always well spent.

Finally, being successful within your niche means sticking to it! It can be tempting to add another product or advertise to a different audience because of hearsay or a special offer being promoted. That’s why it is vital you have an in-depth business plan in place which clearly identifies what you are selling, who you are targeting and where you will be selling.

For advice on finding and succeeding within your market niche, we can help. Get in touch and make a time to chat with one of our business advisory team and let’s get busy.