| Small Business Customers |
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| The Business |
| Written by Derek Goodwin |
Business to business
Let’s talk about a specific type of customer relationship: Business to business. You are the owner or salesperson in a small business. Your prospective customer is a larger business. You provide a product or service to the larger company because they choose not to perform those specific duties themselves. Examples of this type of relationship may be Machine Shop, Sheet metal Company, Soft Goods Manufacturer or anybody in the supply chain, where a larger company buys components, assembles them into some kind of product, sticks their label on it and re sells it.
The one thing that all of these businesses have in common is that they are small companies that do a lot of repeat business with a small number of customers.
The Single CustomerIt is not unusual for these types of companies to have only one, two or three main customers. It makes complete sense. If you have IBM as a customer and only five employees, there is a good chance that it will be all you can do to keep up with their demands.
This can be a good thing, but it will become, inevitably a bad thing. It is a good thing because you develop deep relationships with the client. They trust you, you know their requirements. You deliver quality products. They are a steady source of work and provide consistent income. It becomes a bad thing when there is a management change and they bring in new vendors, or the product line goes away, or the work is outsourced overseas, or you are out maneuvered by competitors.
Diversify Don’t despair. Your strength is in knowing that good things don’t last forever and preparing for that day. The important thing is not to become too comfortable. Once you become profitable, you will be a target, so work hard to keep that client happy, but continue to nurture other relationships. One word of caution, do not let your performance with your established customer slip because you are trying to bring in a new customer. I know many small businesses with stellar customer lists; the problem is all that all of them are former customers.
You may have guessed by now that it is very difficult to get a customer like this. The best method is to develop the right relationship before you start your business. It may be that your current employer becomes your first customer when you start out, or you may have a contact that is having trouble sourcing something, so you start out by making it in your garage. AdvertisingOne of the things I don’t recommend is advertising. You need to know what you are doing and have a real budget to make advertising work. I once spent $10,000 to run a year long advertisement in the Thomas Register. I did not receive a single phone call.
MarketingInstead of Advertising, try Marketing. For example, if you run a house cleaning business and you place a well designed flyer on everybody’s doorstep, you will receive some calls. That’s great! It didn’t cost much money, you did some legwork and most importantly you targeted your message at the people who would buy your service.
How to Begin Typically a good way to start a real business is to begin it as a side business or hobby, keep the costs low and begin the learning curve. I am a firm believer in prototyping. Whatever your business idea, just do it. You have no idea how it will evolve, so get stuck in and begin the ride.
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