Should I Sell to SMB or Enterprise Businesses?

One of the first decisions a startup makes in building their sales process is choosing their target market. Most startups love selling to other startups. Landing a single enterprise customer can change the trajectory of your entire business. Whomever you decide to sell to first, you will need an entirely different sales strategy.

Selling to SMB Customers

Three factors to pay attention to:

Qualification

Smaller businesses have less information available online than larger corporations. You’ll need to invest more time determining whether they’re a good fit based on available budget, organizational structure, and growth rate.

Simplicity

Sales efforts frequently target SMB executives directly. These businesses don’t have divisions dedicated to obtaining new tools. To cut through the noise, keep things simple and digestible — in execution, onboarding, and product offering.

Flexibility

SMBs are often more receptive to new technologies, but every dollar matters. Be prepared to convert them with flexible contracts, free trials, or creative purchase options.

Selling to Enterprise Customers

The key distinction is the lengthy, complicated sales cycle. Selling takes place at the corporate, departmental, and individual levels simultaneously.

Internal Champion

Enterprise transactions start with your internal champion — someone who understands the company’s problems and believes your product can solve them. They advocate on your behalf within the organization.

A genuine champion needs both influence and authority to be effective. You can cultivate a champion by:

1. Leveraging warm referrals and personal connections
2. Listening attentively to their individual and company needs
3. Painting a clear picture of your offer
4. Building a real relationship — enterprise deals are about trust that can withstand the bumps
5. Making it easy for them to advocate by building the business case, materials, and specs

Digging into the Organization

Beyond your champion, you need to understand:

1. The prospect’s product-purchasing process
2. The incentives of all stakeholders involved
3. Who the real decision makers are
4. Who has incentives not to onboard your product (personal connections to competitors, risk aversion)

Gatekeepers

Budget holders, IT, and leadership exist in enterprise firms but not on the SMB organizational ladder. They’ll evaluate your product purely in terms of personal risk rather than potential benefits. Your role is to reduce the risks and drawbacks they perceive.

Where to Start

Consider whether you have a major personal advantage:

• Personal network in enterprise
• Experience building for or selling to enterprise
• A well-known founder name in the industry
• A product that only delivers value at enterprise scale

Without any of these advantages, most startups should start with SMB. This is especially true without funding in place.

The Bottom Line

Startups have a higher success rate selling to SMBs first. In the past, you’d go upmarket as soon as possible. Today, the objective is to find product-market fit as quickly as possible, which requires rapid iteration and feedback. The quickest path is working with SMBs and startups that can be closed and onboarded much faster.