Why Every Business & Entrepreneur Should Find Their Niche

Why Every Business & Entrepreneur Should Find Their Niche

Making Your Brand Stand Out

With Google at the tip of everyone’s fingers and media channels advertising in every which way, consumers are exposed to more information and choices than ever before. So amongst all the ‘noise’ – when you are in business how do you make your brand stand out? 

To stay ahead of the game and contribute to and build a profitable business you need to distinguish your brand from the thousands of other businesses and start-ups competing against you every day.

Resilience and willpower alone will only get you so far, so what do you do?

The Power of Defining your Niche

The difference between successful and unsuccessful businesses these days is intertwined with how well they know and have defined their niche. 

The process of narrowly defining your target market is known as creating a niche and is key to success for even the biggest companies.

Rather than be all things for everyone, have you spent time working out what your company (whether you own one or work for one) stands for, and whom you serve? Do you know your avatar? Really. Do you? Or as a salesperson, a marketer, or a small business owner, or a CEO, do you just try to cast a wide net, hoping and praying that something or some customer out there will catch your bait and be caught in your net?

As a marketing consultant, I often come across clients who need to take a step back and define and understand whom they are talking to in order to understand how to talk to them. No matter what stage they are in their business, a lot of the work I do with clients requires this crucial step. In fact, even those who may have successfully been running their business for years or decades, often lose their understanding of their target market and in turn benefit from taking some time to define their niche and once again appeal to their prospective customers. 

Four Steps to Finding & Testing Your Niche Market

1. Focus your service or product offering

Remember that smaller is bigger, so as a business owner or an employee it’s important to FOCUS your services and product offering rather than be all things to everyone. For instance rather than broadly defining your business as a clothing retailer, your specific niche could be ‘stylish maternity clothes for executives’.

Your niche should arise naturally from your interests and experience. It may feel awkward to do the following exercise, but here’s how you start the process of focusing and defining your niche:

  1. Make a list of the things you are very good at (personally and professionally)
  2. Consider which things you enjoy the most and are genuinely passionate about
  3. List any achievements to date related to the things you are good at
  4. Think of the biggest lessons you’ve learned in life look for patterns in what you value
  5. Consider if there’s a problem or ‘gap in the market’ that you can solve using your skillset

Whether you are employed or self-employed, going through this process will provide you with clarity around what you should be selling.

2. Recognise you can’t do business with everybody and define your IDEAL customer

Be as specific as you can. Keep in mind that your customer could be a ‘business’ (B2B) or a ‘consumer’ (B2C). Consider whom you want to do business with, and what they have in common, listing common traits such as geographics, demographics including age, gender, marital status, income, industry, as well as psychographics such as hobbies, interests, values, lifestyle and beliefs.

Based on this description and identifying what your target market has in common, analyse their wants and needs. Often the best way to identify the main concerns of your target market is to talk to them. If you are going to serve and market to your ideal audience, you need to know what drives them, physically, emotionally and otherwise.

3. Evaluate the potential of your market

Just because you have worked out a niche to sell your focused products and services todoes not guarantee success. You need to ensure your potential niche market is large enough in size to meet your sales goals.

For instance, if you are selling boat shares to males in the age bracket of 25-40, living within a 20km radius of Roseville, with an income of 65k or more, you need to work out what the size of this market is. Only a fraction of the people you reach will ever convert to a customer, so the pool you are working with needs to be large enough to begin with. In addition to the size of your market, the following list of questions is a useful means of evaluating whether you can successfully profit from your niche market:

  1. Is there uniqueness to your offer? Ensure you research your competition.
  2. Can you take the product to market quickly?
  3. What is the pricing potential of your product or service?
  4. Is there an upfront investment required?
  5. What is the cost of delivering your service/product?
  6. Can your business function without you in the long term? Does it have ‘evergreen’ potential?
  7. What is the cost of customer acquisition?
  8. Is there urgency to the solution you are offering? (ie. AIRBNB was launched during a time when people needed another means of income and therefore overcame any hesitation to open up their homes to casual short term visitors).
  9. Can you upsell any products or services after selling one of your products? 
4. Test the market

Once you have found a match between your niche market and your product or service, and evaluated the potential of your audience, take it to market and test it. Give people in your niche market the opportunity to buy your product or service by offering samples or a trial for free. Ensure you aren’t spending a fortune on your initial market test.

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