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B2B and B2C

An SME’s key customer for its finished goods or services might well be other businesses. What’s needed to make an SME a B2B specialist?
BRUCE BILLSON: Mal Hart, managing director of Hart Marine. Thanks for having us here today. Once a racing yacht manufacturer, now pure commercial. Tell us a little bit about your story.
MAL HART: Well, thanks, Bruce. We started building boats in 1983, racing yachts. And my background was sailing. My father was Harbormaster in Western Port. Brother was a Sea Pilot. I always say I didn’t have the smarts to go to sea, so I ended up staying onshore and building yachts, which was my passion. And the story’s bit of history up, from there on in. We’re still building boats 34 years later.
BRUCE BILLSON: But different boats. You went from really a pleasure, leisure, competition space. Arguably building things with people play money, to now building really commercial, critical functioning vessels that are at the heart of the economy. What brought about the shift?
MAL HART: The GFC really brought around the shift. The pleasure boat market was on a knife’s edge. We had the opportunity to move from the pleasure boat market and move into the commercial boat. We’d always done a little bit of commercial work, but the GFC really made us focus on the future. And the future definitely wasn’t with pleasure boats.
BRUCE BILLSON: So a niche product, bringing best of breed technology into really a very handsome incredibly functional vessel. Did the market know that that’s what it needed or was part of your work introducing them to something that was a little more than a workhorse that had all the attributes of your designs?
MAL HART: I think when you’re building a product and putting the whole package together, one, you’ve got to have a good product, a good design. Secondly, it has to be built, well engineered well. Thirdly, it has to be finished well and have– fourthly, fit for purpose. And we were able to bring in those last few– or add a lot of spice to the last few. It’s a French design, the pollack boat, these work boats. It had been trialled and tested in France. We can actually raise the bar in performance, quality. And we’ve successfully delivered a great outcome. And today we get from the French designer saying, Hart, you build– your boats are too good for work boats.
But, that’s what sells. We have sold more pollack boats than any other builder or French builder today. And we’re on a great track.
BRUCE BILLSON: So obviously, conventional advertising is not going to get Hart Marine and the magnificent vessels you produce into the right minds, into the right eyes. What strategies are using the market to your niche market, that you are an exemplar provider of this capability?
MAL HART: We use our product because we know it’s best of breed. And so that’s very important, to be able to rely on your product to say, I don’t need to sell you a boat. Go and hop on the boat itself. That’s a really important factor. We see so many times in the products we buy, we use products that are marketed extremely well, but aren’t fit for purpose. And you find that out through case studies or use. And we want to make sure– we don’t want to be one of those. So our product has to be best of breed. Fit for purpose.
And we need to have that ability to be able to say to a client, ‘Go and hop on it’. We don’t need to be there. The boat sells itself. Your past customer’s your best advocate. Your repeat business is your best business. That’s a really important factor, is the philosophy, well if you sell one boat, you’ve done well. Sell two boats is normally– not normal. Sell three boats is unheard of, to the same customer. Today, here in Australia, we sell a series of boats. And we’ve got ports we’ve sold six-plus boats to.
MAL HART: That’s by building a quality product. And I think it’s very important to be able to say, and we’re going to be in business for the next 20 years. Never put a deadline on how far you want to be. This is a journey. It’s a life journey. And people want to hear that.
BRUCE BILLSON: For SME business with a great sense that they’ve got a niche market, and they’re really well-placed to tap into that and succeed, what would you be saying to them? What would be three lessons would you give to them based on your experiences?
MAL HART: You’ve got to give back to the business. Don’t take the energy out of the business. You’ve actually got to feed the business. The business is a live process and so it’s really important to put back into the business, financially, technology, infrastructure, those things.
BRUCE BILLSON: Boats are your passion. You bounce around with excitement in your business and it’s got to be infectious and inspiring for your team, too.
MAL HART: Absolutely. Passion is everything. You’ve got to have the spark. You’ve got to want to go and do this. And I always say, don’t worry about the money. Be passionate. If you’re passionate, the money will come. The success will come if you’re passionate. But it won’t come if you’ve got it the other way around. If you’re in business just for the money, then you’ve got no passion. You’ll be lucky to do well. If you’ve got passion there, it will drive. And that’s super important. Integrity. Be a doer, say what you’re going to do. As I say, we learnt, we would build the boat without a contract for years. So integrity was everything for us. And still is.
If you asked me what the biggest single thing is, it’s communication. Communication is the most important factor for any relationship success on any front. Whether it’s marriage, whether it’s with the kids, whether it’s with your business, whether it’s with the team, your team leaders, your management, be able to communicate well. Be able to talk to them. Be able to be open book about things. Communicating with your customer. Communicating with your client. Communicating with your suppliers. Telling people what your needs are, what your expectation is. And very important, I ask people what their expectation of me is, as much as what my expectation of them is.
BRUCE BILLSON: Mal Hart, thank you for some time today and sharing your insights. And keep those sailors and those pilots safe out in the treacherous seas, where most people would think, I just won’t go there. They’ll go there knowing in a Hart Marine vessel, they’re in good shape.
MAL HART: Hey, thanks, Bruce. Appreciate it.
An SME’s key customer for its finished goods or services might well be other businesses. What’s needed to make an SME a B2B specialist?
As we learnt in Step 1.9 on bespoke markets and in Step 1.11 on supply chain participation, there are a variety of mechanisms for SMEs to access new markets. One of these is business-to-business (B2B) and another is business-to-consumer (B2C).
The number and value of B2B transactions far exceed those of B2C. When you purchase a car, there is only one transaction involved. You buy the finished product in one transaction (B2C), yet a car manufacturer requires many transactions to purchase the products and services to create the car (B2B).
B2B trading is big business and one SMEs can tap into to grow their markets.
While it is the case that within a B2B context large companies can have an advantage over smaller businesses, Mal Hart from Hart Marine shows how building a high-class product, specifically designed for a particular function and developing close working relationships with those in the appropriate market, can ensure success for an SME.

Your task ​

Identify current or potential business customers for your SME or one you’re familiar with.
Reflecting on the observations shared by Mal in this video, what key factors will a business customer be looking for if you are to be a valued supplier?
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