Understanding Your Business Model: B2B Or B2C

When running a business, understanding your business model will ensure that you respond well to demands of that particular business on both frontiers of customers and competitors.

A business model is simply a structure that defines whether you serve end consumers or other businesses as clients.

It is most likely that you have bumped into the words B2B and B2C.
B2B refers to Business to Business. B2C refers to Business to Customers/Consumers.

Example of a B2B

In B2B, your business focuses on selling goods and services to other businesses. An example here would be an exclusive wholesale cereals shop that sells cereals to other small-scale traders in bulk. You can also think of importers who pick goods directly from producers in foreign countries eg. Turkey and then resell these goods, for example, dresses to boutiques in Nairobi and elsewhere in Kenya.

Example of a B2C

In B2C, your business focuses on the end consumer. In our case, we can think of a boutique in Nairobi that sells Turkey dresses to Mercy and Dora. Another example would be the kiosk around the corner in your area, the shopkeeper, let’s name him John, sells sugar to you which is intended for use in making tea at home.

Am sure by now you have already categorised your business into one of these two models or if the operations overlap, you can still point out one particular side your business or the venture you work for lean on.

Once you have determined this, then it’s up to you as a Mwanabiashara to streamline your business operations to meet the needs of your clients. ‘The customer is key’ as we always say here on Mwanabiashara© and whether this customer is a business or an individual, their importance does not decrease. Their needs and satisfaction always have to be prioritized.

Variations will exist however on how you handle transactions with either of the two. If you’re a B2C, payment is almost instantaneous and in most cases, it’s advisable that this be so to avoid bad debt. For a B2B however, most of the payments come much later. Here, you will need to build a rapport with your clients which will enable you to get payment guaranteed to you and also help you avoid losing clients due to rigid payment structures that you may have put into place.

This is just one variation that will exist, there are a ton others that you need to familiarize with.

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