What Is B2B?

B2B, or business-to-business, describes a company whose customers are other businesses rather than individual consumers.

Category: Product, growth and team · Reviewed 11 November 2026 · 2 min read

How it works

A B2B company sells products or services to other organizations, such as software for accountants, parts for manufacturers or consulting for hospitals. The buyer is a business, and the purchase is made to serve the business's goals. Several people often take part in the decision, such as the user, a manager and someone who approves the budget.

Because of this, B2B sales often take longer, involve demos or pilots, and may require contracts, invoices and security reviews. Deals tend to be larger and relationships longer than typical consumer purchases, though this varies a lot by industry and product.

Example

For example, a startup sells inventory software to independent retailers for 200 dollars per month. A retailer tries a demo, the owner asks the store manager for input, and then signs a yearly contract. If 30 retailers sign, monthly revenue is 6,000 dollars. The numbers are hypothetical.

Why founders care

B2B can offer higher prices per customer and steadier revenue, but it often needs a longer sales process and more support. Marketing is usually aimed at a specific type of company and role. Founders should talk to potential business customers early to learn who decides and what they will pay for. B2B and B2C companies differ in how they measure success and what costs matter most.

Common mistakes

• Selling to the user when someone else controls the budget.
• Underestimating how long a sales cycle can take.
• Targeting an audience that is too broad.
• Skipping contracts and security questions that buyers will ask about.

Frequently asked questions

What does B2B mean?

B2B means business-to-business. A B2B company sells to other businesses or organizations rather than to individual consumers. Typical examples include software, supplies and professional services.

B2B vs B2C: what is the difference?

B2B sells to organizations, often with longer sales cycles and larger deals. B2C sells directly to individual consumers, usually with quicker decisions and lower prices per purchase. Many companies mix the two.

Related terms

• B2C
• SaaS
• Go-to-Market Strategy
• Customer Acquisition Cost
• Lifetime Value
• ARR

Go deeper

• How to Get First Customers: 10, then 100, Without a Budget GuideHow to get first customers for your startup: find early adopters, run cold outreach, do things that don't scale, and reach 10 then 100 with little or no money.
• How to Validate a Startup Idea Before You Build GuideHow to validate a startup idea before you build it: customer interviews, a question bank, landing page tests, and a checklist for deciding whether to go ahead.

All 70 startup terms · More terms starting with B · Guides

General information, not legal, tax or financial advice. Reviewed 11 November 2026.