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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.

As small business owners plan for how they will operate after COVID-19, there are some important business questions to be asked about the coming business recovery. These questions will help you determine what adaptations you want to keep, whether your business model is working, and if there are additional changes you want to make to keep your company operational through future economic downturns.

It’s not always fun to do this sort of examination, but the answers to these questions will help you to make the best possible decisions for the future.

What Worked and What Didn’t Work in my Business Model?

Almost all small business owners had to make changes to their business model. Whether it was hosting meetings with clients on Zoom, learning about encryption technology to allow employees access to sensitive information from home, offering restaurant food for take-out or managing dance classes online, most small businesses adapted in some way.

Ask yourself:
Have I have to adapt my business model? Did I alter my goods or services in any way? Have I changed how my premises are used? Do these adaptations enhance my business in any way? Do these changes highlight gaps in my business model that should be addressed? Should I make some of these adaptations permanent?

Maybe you have a lot of clients who would prefer to have meetings online rather than face-to-face. Perhaps offering classes online is a way to reach out to students or clients who can’t attend weekly sessions in person. There may be perfectly good reasons to continue with a revised business model.

Do I Need to Make Changes to my Supply Chain?

You have some control over your supply chain, but not a lot. Disruptions happen and they can drastically affect your business.

Review how the various components in your supply chain reacted to the pandemic and whether they helped your business or hurt it.

Ask yourself:
Did the suppliers in my supply chain remain open and transparent with me? Did they reach out to me to discuss revising our agreement? Were they reasonable in their expectations and willing to work with me? Do I need to have alternate arrangements or back-up plans in case there are future supply chain disruptions?

Your supply chain has a huge impact on your business. Trusting your suppliers and knowing you can work with them will allow you to feel more secure in the future.

How has my Team Adapted?

Your team has faced a great deal of stress and uncertainty during COVID-19, due to professional and personal concerns. Team members may have had to transition to new ways of working—at home, on a new schedule, or with new policies and procedures in place.

Ask yourself:
Are there changes to how my staff works that I could continue to implement? Should I provide additional training for staff? Have I communicated openly with them? How adaptable was my team?

One benefit from having employees work from home more days a week is that such opportunities for remote working can boost employee morale while saving you money. Now that you’ve invested in the technology to allow staff to work from home, is it worth it to allow this scenario to contine, even a few days a week?

Final Thoughts

In addition to looking at your business, take a look at your customers and clients. Were they supportive of your business during this time? Did they turn elsewhere? Did they respect the changes you made to your business or the policies you put in place?

Each of the above questions about your business model, your supply chain, your team and your customers, will help you make informed decisions about your business recovery as COVID-19 restrictions are lifted.

Get in touch with us to chat about your business recovery.

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.

We’ve heard this before: the COVID-19 pandemic is an unprecedented global health and financial crisis that has caught many off guard. While the threats to human life are very real, the damage to the health of businesses is really just starting to show. In the coming weeks and months, many businesses will be in a fight for financial survival.

The seriousness of the disease and the lack of a vaccine (at the time of writing this) have prompted governments around the world to impose strict measures to contain the virus. These restrictions in people’s movements and the temporary lockdown of non-essential services have definitely taken a toll on businesses and families across the country.

While there has been a lot of talk on how to avoid contracting the virus and how businesses can operate safely to adapt to the current conditions, this article will focus on helping you manage the financial survival aspects of your business during COVID-19. Read on for our tips on cushioning the impact on your business.

Update Your Financial Records.

The first step in planning your financial survival in such a difficult environment is getting a crystal clear and up to date understanding of the financial position of your business. This means updating your financial records and keeping them in order as frequently as possible. Knowing things such as your cash position and assets that can be sold quickly will go a long way in helping you make informed business decisions. Good records build a solid foundation for a successful business. They’re also really important when applying for loans or government grants, subsidies and assistance.

Examine the Financial Health of Your Business.

Following on from the first item, it is important to get a good grasp of your business’ current financial health through a careful analysis of your books and statements. By looking at key financial figures, you will get an idea of how your business is doing. You can see fundamental factors such as the liquidity and solvency of your business which will help you decide on the best steps forward as you deal with the crisis and the aftermath. Chat to us for help with these financial pieces.

Improve your Cashflow.

A lot of businesses across the country are facing cash flow problems at the moment. If you are one of them, you’re certainly not alone. However, the key here is not letting the problem worsen or become unmanageable.

Preparing a cashflow forecast should give you some forewarning before issues even arise and will allow you to address them early on. By quantifying your forward bookings, forward orders, and work in progress, you will get to identify future cash flow and plan accordingly.

You can also take the following measures to boost your cash flow:

  • Identifying the demand for your products or services, so you’ll know where to focus on and where you can reduce stock orders
  • Cutting back on unnecessary expenses
  • Urging your debtors to pay you, negotiating on a payment scheme that will work for both of you
  • Seeking payment extensions or debt re-structuring
  • Invoicing as soon as you deliver the product or service
  • Seeking external investors or lenders
  • Taking advantage of financial support from your government

Increase Online Sales Where Possible.

With the government implementing stricter restrictions to prevent the further spread of the virus, you should find ways to move your products and services online – if you can – and continue to serve existing and new clients. The situation that we are in is forcing business owners to re-imagine their business and re-evaluate their business models. You’ve got to adapt and be resilient. It’s those businesses that will survive.

Survive 2020 by Managing Your Financials

It’s safe to say not many of us factored a global pandemic into our 2020 business plans. Although there is no foolproof strategy to get through what’s proving to be a turbulent 2020, the tips for financial survival shared here should be able to give you some guidance on minimising the risks to your small business.

Want some more help? Our team of advisors love to help businesses. We’ll help you develop a plan to weather the headwinds of the coming months, while saving you time and money along the way. Contact us today and we’ll work through it together.

An eco-friendly business offers plenty of advantages: lower costs, increased profitability, marketing opportunities and the biggest one of all, a better environment for everyone.

Long gone are the days when businesses who actively chose recycled photocopy paper were ‘different.’ Today’s businesses are striving to become greener, and they are proud to show it. We take a look at some of the ways you can do to also become an eco-friendly business.

What is an Eco-Friendly Business?

An environmentally sustainable or eco-friendly business is one which focuses on using resources more efficiently and reduces waste. Often a business is seen as being green if it sells products made from recycled materials. But there’s more too it that simply the products they sell. Every business can improve their level of eco-friendliness regardless of what they sell or where they are located.

Like with everything, going green is something best done from a place where you know where everything stands. This requires you to identify what your business’ current environmental practices are, such as:

  • waste – what is recycled, reused, composted or sent to the landfill?
  • consumables – how many do you use, can you reduce their usage, is there a better viable option?
  • workplace – what strategies are in place to reduce waste, electricity and water usage?
  • promotion – how are eco-friendly practices encouraged by your team members? Does this work? Where are the areas for improvement?
  • policies – are there any workplace or business policies in place regarding being a green business? Do they need revision?

Once you’ve identified areas for improvement, you can begin making real changes.

Easy Ways to Operate an Eco-Friendly Business

Keeping in mind the areas you’ve identified where you can improve your business’ eco-friendly practices, consider which ones of these suggestions would fit:

  • use natural light where possible – not only does is save electricity usage, and therefore save you money, but natural light is also kinder on our eyes. Position desks and workstations near windows.
  • go paperless – invest in some cloud storage to keep your documents in rather than printing out and putting in a filing cabinet. This also refers to invoices, where Xero for instance, can invoice digitally.
  • work from home – thanks to COVID-19, many businesses had their employees working from home where possible. Why not continue this trend at least part time, cutting down on commutes and resources used to get to work.
  • meet digitally – virtual meetings have been around for a while but are on the increase. Instead of driving to meet at someone’s office, meet digitally instead.
  • choose reusable products – single use products are costly in resources and price. Invest in reusable products such as mugs, refillable hand sanitiser containers and printer inks.
  • buy sustainable – this means identifying suppliers which are committed to practicing sustainability and using their products or services.

Here at MBP Advisors + Accountants, we strongly believe we are an eco-friendly business, we even won the ICNZB Award for Most Sustainable Bookkeeping Business in New Zealand. . That’s because we are dedicated to being paperless, efficient and environmentally conscious. We plant a tree for every single ream of paper we use and we actively fund environmental initiatives in our local communities. However, we’re always looking for ways we can do better. We’d be keen on learning what your business does too, so let us know in the comments below.