Finding your niche in a populated marketplace can be difficult. It’s like finding a needle in a haystack. A niche market is a segment of the market which a specific product is focusing.
Back in the early days, being creative was a matter of survival. If we couldn’t think our way out of a problem then we wouldn’t be around for long. Struggling to survive requires us to be innovative and the key to this is the ability to imagine and explore different possibilities.
Entrepreneurship is about identifying new patterns in business that makes sense. It involves changing your perspective, breaking rules, seeing things differently and challenging the conventional view. It’s all about creativity.
Creativity according to Oxford dictionary is the use of imagination or original idea to create something. It is a purposive activity, one with a target in mind. Creativity is not just about having new ideas but, finding new ways of solving or refining already existing ideas. Looking at the marketplace to see and understand what is missing and how best can you fill the gap. No business can cater to all people. The more narrowly you can define your target market, the better. Find your own crowd.
To my fashionista, for example, there are several fashion stores in every nook and cranny. HM and Gucci are both fashion retailers, but they have very different niches. HM caters to bargain-minded shoppers, while Gucci appeals to posh consumers. With food as well, we have businesses that target specifically to herbivores (spring asparagus salad) or omnivores (chicken salad) people.
Companies identify their geographic range and the types of customers they want their business to target. They don’t just sell their products and services to everyone. They innovate and spend a lot of time and money on Research and Development (R&D) before they implement their plan.
Here are some steps to help you find your niche:
1. Identify Your Niche Audience
These days, businesses are trending toward slighter niches by targeting a smaller range of people. This helps them manage their target market and enhance their products or services to suit their customers. For example, owning a Health & Fitness Gym that caters to all body shapes might not be as profitable as you think. Why not try owning a gym that caters to women just who had children. You will not only target women but, a specific section of women. Now, if you are thinking of becoming a specialist, you can narrow it down further by providing services for woman who just had babies through caesarian section. This will make you an expert in your own field because the services you will be offering will be tailored to your customers’ needs and your experience. Targeting everyone is a risk of exhausting yourself and confusing your customers. Your passion is not enough to build a profitable business.
Some entrepreneurs believe that niche marketing as a strategy will cut their profit margin or limit sales. But the truth is, having a well-defined niche gives your business more power, especially if the niche has limited people catering to it. Chris Ducker once said:
“When you choose a niche audience and take the time to understand their needs deeply, a whole new world of options open up to you. You switch from struggling to find ideas for products, to instantly knowing exactly the types of products you should be promoting – because they’re in tune with your niche audience’s needs.”
2. Research Your Niche Market
Most people find researching stressful and don’t even bother doing it. They find a business idea they like and go for it blindly without doing adequate research. One of the problems entrepreneurs face is assuming that the opportunities they seek have already been identified and all that remains is for them to develop and resource it. The truth is, in reality, this opportunity is only a vague idea of the basis of a new venture. Without research, your business might not survive.
In this age of technology and internet, research has become simpler and easier to do. Making the most out of it will help you search and identify what keywords your proposed audience uses when they search for topics linked to their needs and desires. There are several websites you can find this information such as ‘niche’ forums, blogs, how-to websites, and ‘trend’ websites.
If you are the type who finds research daunting, you can consider paying people to help you out. But, as an entrepreneur, it is a must for you to develop your research and analytical skills.
If you are conducting your own research, you will need to identify some but not limited to the following things:
- Demographics: Do you want to target Males, Females or both?
- What Age range do you want to target?
- What Class of people do you want to target?
- Do you want to target a specific Location or Country?
3. Identify Your Competitors
After you have identified a particular audience segment, you need to check if other competitors are already providing relevant products and services that address the same needs of your potential segment. The clearest way to identify your competitors is to figure out “if you weren’t around, who would cater to your customers’ needs?”
In answering this question, don’t restrict your thinking to companies similar to yours but, companies that can offer alternative products and services as well. These are your direct or indirect competitors. Direct competitors offer same products or services while indirect competitors offer alternative products or services.
To have a better understanding of this, you will need to consider conducting a competitive analysis (I will illustrate more on this in my next post). This is to determine if there are substitute products or potential new entrants. A substitute product is anything that delivers the same set of benefits to your customers as you do. For example, buying a book can be substituted by an e-book. While potential new entrants are people whose products or services might change the industry completely such as cassette players have been phased out by digital music.
For many entrepreneurs, these are the most difficult stages when implementing business ideas. But fear not, your niche should arise naturally from your interests or experience. If you do proper research, entering the market will be a calculated risk and not a gamble.