It’s tough working the general market when you’re a small business, especially since you’ll have to compete for the big company ‘leftovers’ with other small and medium-sized businesses. This is where ‘niche’ markets come into play.
Niche markets are specialized smaller pockets of the general market that the bigger companies often leave alone because of how small and specific they are. This makes them ideal for small to medium sized businesses because they’re generally willing to pay a premium for what they want and you’ll have less competition to worry about. Think hipsters and organic beard oil from small lot farms.
So now the question is: how do you find your niche and make it work for you?
Find Something You’re Passionate About or Interested In
The core of any niche is the passion or hobby the specific need comes from because the level of time and interest people invest often lead to something more. Take camping, for example. You start with a basic camping set, spend time outdoors and do outdoor activities like hiking or fishing. From there it can develop into getting better gear for whatever specific activity or general need to improve the camping experience.
It’s important to also be interested in the thing your niche is passionate about because it helps you identify what they need or want, including problems or key issues the community would be facing. This leads us to our next point:
Find the Key Issue, Problem or Need the Niche Community Wants to Address
This is where you and your prospect for business comes in. Identifying one of the things the community wants to solve or needs to have is an opportunity for you to provide a solution and generate business, and it’s made easier to do if you’ve established yourself as a member of the community. The best part is how your business has the potential to grow with the community in a win-win relationship, especially as a business that directly deals with the members of the community. You can then start on the next bit of the process in finding solutions for the community.
Scout the Competition
Check on the competition, their offerings, and the general feedback from the community. It’s important to check for competition within the community before looking for external ones as they will more likely have similar ideas and solutions to what you have. Once identified, see what products or services they’re offering as solutions to the problems you have and potentially haven’t identified and what kind of reception they get from the community. This makes it easier to find an angle you can take when entering with your own product.
Figure Out Your Profitability
Considering the problem you want to solve and what the competition has to offer, the only thing left to find out is your potential for profiting off the market. Compare the size of the community versus the supply of products or services offered by the competition and gauge how fast or how high you can competitively price your own products or services.
Try It Out
Finally, all that’s left to do is actually running your plans and getting your products out there. Keep taking note of how the competition and the community reacts to your products and make adjustments where necessary. There’s always room to improve and the niche community will change with the times. The important thing is to remember what made you decide to get into business and what drives you to keep going.