When you’re just starting your journey as a small-business entrepreneur, you might be tempted to offer a long list of products or services. After all, what could be better than being known as the best company for all of those services? But in reality, it’s pretty difficult – if not impossible – to establish yourself as the best at something if you’re juggling so many different offerings.
Carving out a niche for your small-business to market to is crucial to keeping your customers happy and your small business growing. Not only does a niche let you focus on one area of expertise and excel at it, you’ll also be able to easily communicate to customers what it is you offer.
Here’s how to find the perfect niche for your small business:
Clearly Define your Knowledge Base and Target Market
First, you need to look at the market you want your business to enter. For example, you could start a business in the IT, food, or travel industry. Regardless of your chosen market, you’ll need this before you can start making a niche for your business.
Narrow your Market down to a Specific Product or Service
Now you’ll want to look into more specific areas in your chosen field. You’ll start with your general market, and keep breaking it down into specific areas until you’ve ended up with a fairly specific niche. You’ll want to keep going until you can easily describe what your company offers in one or two sentences. Meaning you can easily explain who you help with your services, and what exactly you help them with.
For example, if you want to open a small food business, you can’t just market that you serve food. You’ll want to serve a certain kind of food. Maybe you want to open an Italian bistro. Or a small burger joint. Regardless, you need to narrow your business’ focus down to something you can focus and excel at. If you were a vegan fast food place, you would say you help busy people eat healthy when they’re in a hurry.
Research Current Trends and Problems
Similar to the last point, you’ll want to look at recent behaviors, ideas, or products that are currently trending. If you can find something that someone wants, something that’s trending, or something that’s a frustration for a lot of people, and then solve it, you’ve got a good base to build a business on.
This is an important mindset to get into when you’re searching for a niche. You’ll need to look at your product not as a consumer, but more like a marketer. Analyze potential customers needs and wants, and brainstorm ideas on how to solve those problems or cater to those needs.
A Niche can be more than just a Product
The first thing that pops into most people’s minds when the subject of niches comes up, is potential products. However, a small business can make a niche for itself in many different ways. Anything that makes your business stand out or gives you a specific market can be a profitable niche.
Location can be a big niche for small business startups. If you can find an underserved area and open up shop, you’ll have a good chance at success. Maybe your business could make a name for itself with the quality of its products. Or you can deliver your product or service in a unique way.
The point is, don’t be afraid to think outside the box when choosing a niche. The more your company stands out from the competition, the better!
Research and Decide
Once you’ve got an idea of your niche, you’ll want to do some research on existing companies in that niche. You might find that the market is flooded with competition, which doesn’t bode well for your chances of success. A few competitors are fine, and might even be a good indicator of consumer demand. You’ll also get a look at your competitors, and plan accordingly.
Having a niche is critical to the success of any small business startup. You’ll be able to grow and scale your business at a more controllable pace, make smarter business decisions, and ultimately, make more money.
Regardless of your decision, be sure to do your research! Choosing a niche is easily one of the most important factors for a small business succeeding or failing.