In business we talk about finding a niche - a Niche Market - what's your niche? But what does that really mean?
A niche market is a specific subset of a larger market. Given the level of competition in most markets these days targeting a small group of people with a specialized product is a way to separate your business from your competitors. The opposing term would be Mass Market - where the company targets most rather than a few, with a general or generic product, usually with low prices and the hope to sell in high quantities.
It's very difficult for a small business to compete in the mass market - imagine trying to sell sneakers with Nike as your main competitor. On the other hand, you may well find a market niche that could be very lucrative when you really hone in on the unique requirements of your individual customers. I'm pretty sure I read a story about skateboarding sneaker brand Vans - they were developed by skaters who were sick of their shoes being torn up when they performed their daredevil tricks. They also needed a shoe that had a grippy sole. Manufacturing a sneaker designed specifically for the skateboarding market is a great example of a tightly focused niche.
FYI - I'm not much of a skater but I did spend a few years watching my brother skateboard around 'The Bowl' back in the late 70s. I really love watching surfing on TV and skateboarding often makes an appearance!
Cast a wide net or chum the waters?
If you caught my webinar the other day over at The Build and Thrive Academy then you will have heard me talking about this concept. For most new business owners it's counter-intuitive to focus on a niche market.
The fishing analogy might help. You set out for a day of fishing. You find a nice spot, in the middle of the ocean, and toss out your net. Then you hope for the best that some fish will get caught up in it. You might be lucky and catch some fish, but what if you know that the best meal is from a tasty tuna (or you're a fisherman hoping to sell it). It would make sense to do some research to learn where tuna are likely to be that day. With the net method you will have increased your chances of a good catch by being in the right area. What would really increase your success rate? How about throwing some chum in the water that you know tuna love? And sitting right on top of that spot with your tasty hook baited up?
Can you see how this might apply to your business?
As an example, setting up a lovely website offering language classes to people who want to learn a foreign language might seem like a good business idea. But you only need to search Google to realise that language schools are a dime a dozen and there are some heavy hitters in the market. Your business is going to have a hard time making it to the front page of any search engine query - and let's face it, most of us don't move past the first one or maybe two pages of search when we are looking for information. So how can you increase your chances of being found?
Could you narrow your focus and offer a more targeted service? How about French lessons for retirees planning to tour the Bordeaux region of France? English lessons for golf enthusiasts who like to follow the PGA tour around the USA? On the PGA Tour page I found this information about tours. Chances are some people would like to join the tour who do not speak English, don't you think?
Will I be stuck with that niche?
Another thing that new-to-business people often wonder is whether they will forever be stuck servicing that niche or whether it will exclude some other profitable markets unnecessarily. Of course it's hard to predict or say with certainty but my feeling is that you can always diversify later to include a broader market or shift to an entirely new market. I urge you to remember, when you are first starting out, is it better to be a Jack of All Trades and Master of None? or a highly-skilled specialist in your field, in demand by virtue of your reputation only?
Take a look around in your life and you will see examples of niche businesses everywhere. They may be successful now but when they first started people might have thought they were crazy!
gyms - gyms for boxers and weight lifters vs. gyms for women like Contours
book shops - antique books, rare books, comic books
It might take some creative thinking to come up with a niche for your business but chances are your niche has already found you. It's the people who are naturally attracted to you. The things you are experienced in or have an interest in. The jobs that excite you most. What do you think?
As always I am happy to help you. Get on the blower and ask me to help you discover your niche! (skype calls are free and I'm happy to spare half an hour for you!)