In business, you’ve likely heard the term “niche market” many times before. You may have actively shied away from this concept, feeling that niching your business would limit its potential for future growth. What many business owners fail to realise is that niching is actually a way to stand out from the crowd, as a company with a niche isn’t elbowing up against an endless parade of similar businesses.
Niching successfully is all about determining what specific role your business is going to play in the industry. Many small businesses wither and die as quickly as they begin because they have no distinct way of differentiating themselves. Other small businesses may try to be all things to all people in an effort to pre-empt future growth, but instead, end up stagnating because they are stretched too thin to develop and move forward. But a small business with a clearly defined niche has the potential to develop and grow a loyal customer base without being swamped by the competition. Coupled with a strong vision of how to manage future growth, niching is a key to creating a sustainable and long-term business model.
How Can You Determine Your Niche?
When it comes to determining a niche for your business it’s best to start with an honest self-evaluation. Ask yourself, what are you really passionate about? If you choose a niche based purely on potential profit margins, then you may find it hard to stay committed in the long-term. Your enthusiasm could start to wane as you realise you have no real interest in your chosen niche. Another important area to evaluate is common trends in the market, and this is why thorough research is vitally important. If you’re already running a small business, then you can assess what products or services are your “best sellers” and seek feedback from past and existing clients. Once you have an idea for a business niche then investigate what kind of competition (if any) already exists and consider whether or not there is a realistic market for the niche you’re considering.
Finding A Successful Niche: Case Study
When it comes to selling floor coverings, it can be difficult for a small business to successfully compete with the larger nationwide flooring and carpet companies. When a Melbourne family decided to open Carpet Melbourne Direct, people in the industry thought they were crazy however they were determined to find a niche. As a family run small business they knew they couldn’t compete directly against bigger companies if they were offering the same services, so they decided instead to supply warehouse direct floor coverings. They identified a target market (builders and developers looking to purchase large quantities at lower prices) and then directed their advertising towards this niche. They also remained flexible and found a new niche which has accelerated the business growth – school flooring. They started with a niche and evolved into another related niche as the business grew and opportunities presented themselves.
Keys to Developing a Successful Business Niche:
While it is clear that niching can lead to profit for a small business, it is important to carefully consider your options and strategically plan for long-term growth. Consider the following keys to a successful business niche:
- Stand Out – If you want to be successful in your niche then you need to stand out from the crowd. You can do this in two important ways: 1) Minimise the potential competition, and 2) Position yourselves as the experts in the industry. This two-fold strategy means that you will be competing against fewer rival businesses, and simultaneously giving yourself more time to focus on excelling in your chosen niche. For example, there may be hundreds of catering companies in your area. But if you choose a particular niche within the market (for example, catering specifically for baby showers or children’s parties) then you are eliminating some of the competition, and you are standing out as the logical choice for anyone planning this type of event.
- Have an Effective Marketing Strategy – A poorly executed marketing strategy could be at best ineffective, and at worse, counterproductive. So, take the time to carefully consider the best way to reach your niche target audience. Since you’re trying to reach a particular clientele, you should know exactly where your advertising efforts need to be aimed. It goes without saying that in the modern digital age your business needs to have a strong online presence, so your marketing may include a website with SEO designed to target your niche audience, social media pages with relevant content for your target market, or the services of an influencer who can share your business niche with the key demographic.
- Clearly Define Your Goals – A successful small business knows where it wants to go and has a clear plan on how to get there. Just because your business has a particular niche, it does not mean you don’t need to have a clear long-term strategy in place for future growth. This is particularly important for a niche business because you don’t want to expand in a way that takes you away from your niche demographic. Have a series of clearly defined short and long-term goals and continuously review them to ensure you’re moving in the right direction. If you need to make changes to your business plan along the way, then take the time first to ask yourself whether these changes will enhance your niche or detract from it.
It takes time, research and effort to evaluate what niche your business can occupy. Even more determination will then be required to effectively position your business as the industry leader of your niche market. But with a well thought out business model, a clearly defined plan for the future and an effective marketing strategy, your small business can become a success story.