Which customer niche…B2B, B2C, or B2G?

When considering WHAT to consult about, you should also consider WHO you will serve. There are three general niches to consider:

• B2B – Business to business
• B2C – Business to consumer
• B2G – Business to government

Each niche calls for different business approaches. When starting out, it is best to focus on one of the three. You can always expand into the other niches later.

B2B – The realm of many technical specialists like engineers, and where I spent my consulting career. Our clients ranged from Fortune 100 companies to small firms. Most were designing and manufacturing technical products, and were experiencing EMI (electromagnetic interference) problems.

Problems ranged from product test failures to production line failures. A common denominator was pain, always a good motivator for calling in a consultant. Much like being a doctor or dentist 🙂

Marketing was outbound — writing magazine articles, speaking at conferences, networking through professional organizations. Credibility and visibility were key. The reach ranged from local to world-wide.

Sales were inbound — clients usually called requesting help. (No cold calls or knocking on doors to convince clients of a need.) Referrals were golden. 

Purchasing was via purchase orders or contracts. Since our consultations were typically a week or less, we used simple quotations or engagement letters. Simple contracts were used for longer projects.

Payment came from company funds, and may not have been officially budgeted.  But when the “cost of failure” was significant, money appeared.  

Our clients were typically Project Manager, Directors, or Engineering VPs, with appropriate purchasing authority. We rarely dealt directly with purchasing agents, or with the “C-Suite” so prized by management consulting firms.

B2C – The realm of many business specialists (accountants, lawyers, financial planners…) or personal specialists (coaches, counselors, personal trainers…) Clients are often individuals or small businesses.

Most clients are seeking brief help or experience they do not have themselves. It may be driven by pain, seeking improvements, or even fun (such as wedding planners.)

Marketing is often local — networking/speaking with civic groups, or writing local magazine/newspaper columns are effective. But thanks to the Internet, the reach is often expanded through blogs, Facebook, and on-line communities. Either way, high touch personal involvement is key.

Sales and purchasing are often simple (checks, credit cards, or PayPal.) Payment comes from personal funds, which often means smaller fees than B2B.

B2G – The realm of many larger consulting firms. Those working with the federal government are often referred to as “Beltway Bandits.” Nevertheless, there are opportunities for individual consultants if one understands and is willing to work with the bureaucracy.

After working many years in the defense industry, we elected not to pursue this niche. In our early days, however, we did pursue a state grant (which we won) and several federal SBIR (Small Business Innovative Research) contracts (which we did not win.) I’ve known several consultants who built their practices around grants and SBIRs.

Marketing is highly dependent on networking. As such, it can work well for those leaving a government career (military or political) where one can leverage contacts and experience.

There are also publications (such as Commerce Business Daily) that list projects and RFPs (Requests for Proposal.) A word of caution – many are “wired” for preferred vendors. Not complaining — it is just the way it is.

Sales consists of submitting RFPs. In order to maintain fairness, there are strict rules and deadline for RFPs. If you are new to the game, you may want to partner with an experienced vendor or contractor.  Often times, small special efforts are sub-contracted.

Typical payment is via contract, which may be subject to audit. As such, you may need an accountant to assure compliance with government accounting rules.

Typical B2G clients are government agencies or branches of the military services. Your point of contact will be a program manager, unless you are working on a subcontract.

The choice of your business niche is personal – there is no right or wrong. While we were successful in the B2B niche, I know successful consultants in the B2C and B2G niches. Just choose carefully and wisely.

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