Why Startups should Sell to Small Businesses and not Large Enterprises

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As soon as a B2B startup is ready with a solution that could benefit customers of different sizes, the biggest mistake it commits is to not develop an effective sales strategy and instead try to sell to wrong customers initially. Startups tend to focus more on big enterprises hoping to generate a lot of revenue, prestige and credibility in the beginning itself. However, this approach can make their path more strenuous as it’s very difficult to close an enterprise deal. Complex, long sales cycles and higher risk due to the fact that enterprises are many times larger than your own company are definitely few of the key reasons why should consider selling to small businesses and not large enterprises.

Selling to small businesses is a great way to start a business and often paves the way for selling to big enterprises later on. Small businesses might have very less capital as compared to large enterprises but they can offer an array of advantages to startups by being the ideal customers to focus on. Let’s learn how:

Huge Pool of Customers

You have a massive market to target as there are so many small businesses across the globe as compared to big enterprises. You can experiment with your sales approach and be very creative and targeted to figure out what works. Even if the conversion rate is low, you can have a big number of customers in your kitty as you will be able to target thousands of small businesses.

Lower Risk

There are so many small businesses present that failure with one or two customers would not affect your reputation to a great extent. On the other hand, if you fail to serve properly to large enterprise, it will make quite a dent in your reputation and progress.

Smaller Sales Cycles

The path to complete a sale to a small business could be easier. It doesn’t take several months to close a deal and sometimes a few phone calls can do the trick for you. Buying decisions are made faster in small businesses and complexity is far less than enterprise businesses. Often, there is just one decision-maker from whom you can get the buy-in.

More Room for Innovation

Large enterprises often follow the bureaucratic culture and policies and are therefore less open to experiments and innovation. On the contrary, small businesses are more open to adopt a strategy of innovation and take big risks as they fight for a place in the market. They approach things in new ways to differentiate themselves in order to grab the market share from the leaders. Technological advancements are crucial for small businesses to break into the market and create an identity of their own.

Much Easy to Sell

Big enterprises have the benefit of choosing from the vast pool of products but same is not the case with small businesses. Many small businesses desperately need some products but can’t access them easily. This provides a great opportunity for startups as they can easily get the entry to showcase their product and appeal to more demanding customers.

Endless Product Opportunities

Small businesses usually face many gaps in their operations due to lack of resources and experience. Hence, they require improvement in almost every aspect of their business such as web technology, mobile and social marketing, customer communication, transaction processes and more. This offers enormous opportunities for startups to provide their cost-effective solution and fill the gaps that small businesses have.

 

Small businesses furnish a lot of benefits and advantages to startups who are in a phase of developing their initial customers. It will be easier for startups to lure a small business owner by delivering a quality offering, reach the decision-maker faster and close the sale quickly. Startups can gain immediate success and have better learning opportunities which can help them in improving their products so as to easily target large enterprises in the future.