Dictionary

Business-to-business (B2B)

“Selling to customers who buy for a business or professional purpose, such as companies or self-employed people, rather than for personal use. In business-to-business (B2B) sales, the buyer's purpose decides the category, not their size or how they pay.”

Why business-to-business (B2B) matters to a first-time founder

Selling B2B changes almost everything around the product. The person who uses it may not be the person who approves the spend, prices are judged against business value or savings, and customers often expect invoices, contracts and clear terms. Many consumer protection rules do not apply to business buyers, so your contract terms carry more weight. Design for a consumer checkout and you can lose deals that needed a quote and a second approver.

Examples of business-to-business (B2B)

You sell invoice chasing to a design studio. The studio manager has to like it, and someone else may have to approve the spend. A freelance designer who buys the same tool to collect invoices from clients is also normally buying for their trade, so that sale is B2B even if one person makes the decision.

Common misunderstanding

People think B2B only means long enterprise deals, or that the legal form and payment card decide the category. A sole trader can be a business customer, while a company card can be used for a personal purchase. What matters is the capacity in which the customer buys and what the purchase is for.

When to use it

Use a B2B model when the problem and budget arise from the customer’s work. Design the price, evidence, contract, and sales process for that buyer. A card payment can still be B2B; procurement and several approvers are common at larger customers, not requirements of the category.