Small businesses and enterprises may exist in the same industry, but they differ greatly in their needs, resources and goals. Because of the varied nature of budgets, customer bases and flexibility levels, it is best to focus on one or the other when bringing a new product or service to market.

There are a few key determinants that can help you determine whether your product is best for a small business or an enterprise. When you focus on these strategies, you’ll be well equipped to make the best decision for your business and maximize the impact of your marketing campaigns.

Related: Selling to small businesses? Here’s what you need to succeed.

How to choose between small business and enterprise

When deciding whether to target small businesses or enterprises, ask, “Has this been done before and has it been done well?” The business landscape is filled with strong competitors. Depending on the product or service you offer, you may stand out more in a small business market, especially if you offer an attractive price point and level of performance.

This scenario held true for Vagaro: In the early days, most of the players in the salon and spa space went after the bigger, wealthier companies. But after further research, we found that a majority of companies in the industry only had a few employees. It made sense to provide cheaper software and target smaller businesses that were often overlooked.

Companies also tend to spend huge sums of money in exchange for a customized product, expecting to keep repeating to meet changing customer needs. So start by thinking about how involved you are willing to be. Next, consider whether your goal is profit-based or whether you want to put in the effort to build your customer base.

Companies can afford to write big checks for your product, so you only need a few of these partners to keep your business going. The downside, however, is that if you lose even one of those business customers, you risk losing big revenue.

On the other hand, when you target small businesses, you may not make a profit as quickly, but you will have a larger customer base. If you lose a few partnerships here and there, you’re still relatively safe. Small businesses are also able to give you more relevant and timely feedback, and they’ll be more involved in your growth process because your relationships with them are more intimate.

Related: 6 important things to consider when marketing a product

When small business makes sense

In general, smaller companies are typically not as experienced. They may be as efficient and innovative as companies, but they usually don’t have the same financial and resource capabilities. They can’t always afford to learn, plan and repeat over and over. And in many ways, they’re still figuring things out. As a result, these smaller companies will not want to pay for a product or service that cannot be proven. They need to see demonstrable evidence that your product will improve their bottom line in some way. So small companies are the ideal choice if you have a less experimental product that can guarantee results.

Unlike enterprises, which are usually more interested in products that can manage or optimize existing accounts, small businesses are more concerned with growth. When targeting them, think about the ways your product can help them gain visibility and expand their reach.

Catering for smaller businesses is often equally rewarding for both parties. We noticed that many of our SMB customers eventually progressed to the enterprise level. In some cases, offering a product or service to a small business is an opportunity to grow with them and be part of a monumental journey. The more they grow, the more you can too. If you’re wondering how your product can help impact another company’s growth, small businesses can be a great partnership opportunity.

When businesses make sense

If you have a strong focus on innovation, connecting with companies can be very beneficial. These larger companies have the budget to experiment, so with investments from these types of companies, you can test the waters, build new iterations, and transform your product into something more powerful. However, since a business accounts for a larger percentage of your profits, this route naturally carries more risk.

Enterprises also have an edge when it comes to networking because they are familiar with key players in the industry and have desirable connections. They make it a competitive point to know the market and what to do to influence it. If you want to expand your reach and elevate your company’s status, partnering with a well-connected company can help you stay ahead of the curve. But large enterprises have numerous organizations vying for their attention, so getting your foot in the door requires strategic thinking. Partnering with at least one other organization can boost your reputation and convince companies to take you more seriously.

Related: Selling Your Product to a Major Chain in 5 Meticulous Steps

Over time, both small businesses and enterprises can become part of your operations

Ultimately, when it comes to targeting small businesses or enterprises, the decision is yours. Each option has its own pros and cons that you should weigh carefully before making a final call. However, if your product can guarantee results for smaller businesses and give them visibility as they grow, then this might be the best choice for you.

On the other hand, partnering with an enterprise can help you expand your reach and elevate your company’s stature by leveraging its industry connections. Whichever route you choose, it takes some strategic planning. With careful consideration and effort, you can not only grow your business, but also form lifelong partnerships.