Managing Your Business
Finding Your Business Niche
You're starting a business and understandably excited about sharing your products and services with the world. Before you launch, help ensure your business will succeed by focusing on what makes your company stand apart. The key is to specialize in your products and services. Accomplishing that requires finding your niche.
What Is a Business Niche?
A business niche is a specialized area within a broader market that serves a specific audience. For example, a women's maternity clothing store is a specialized niche, as is a consulting company that focuses on digital advertising for retail businesses.
Determining your niche is vital because if you try catering to everyone, you won't appeal to anyone. A targeted niche allows you to differentiate your business from other companies and focus on what your customers truly need and want. It lets you drill down on what you do best, which leads to satisfied, loyal customers.
Finding your niche will make you more likely to be successful with your business venture. The following steps will help you determine the perfect business niche for your skills and interests.
Consider Your Passions and Skills
For business success, it's essential to enjoy what you do. When you have a passion for what you're selling or the advice you're giving, your enthusiasm shines through. Such excitement is contagious and can lead to loyal customers and dedicated employees.
Determine your business niche by asking yourself what excites and impassions you. Here are a few questions to ask yourself to spur some ideas.
- What do I enjoy doing that could translate into a business?
- In what areas do I have unique skills and talents?
- What topics do I have a great deal of knowledge about?
- In what areas have I acquired special skills and training?
Ideally, it's great if you love a business niche and are well-educated and skilled in the topic. You may not like every aspect of a business specialty, but try to focus on a niche you enjoy overall.
Determine if a Market Exists for Your Niche
Enjoying your business idea isn't enough if you're one of only a few people interested in the service or product. For the best results, determine if there is a market for your business niche. Here are some tactics for doing so.
Perform Google and keyword searches
Your niche idea must be popular enough in an online search to show that there are interested customers. If few people are searching for your product or services, it might indicate that the market for your business niche doesn't exist. In general, you want search volume in the 1,000 to 10,000 range for the past 30 days.
Can you easily identify customers?
You should be able to pinpoint your customers quickly and easily and identify their interests and passions. If you can't determine who would be interested in your business niche, it may be best to develop another idea.
Are customers easily accessible?
Are the people interested in your product or service easy for you to approach? For example, if your business is digital, are your customers often on the internet? Or, if you are planning on opening a brick-and-mortar location, are your ideal customers in your local vicinity?
Do enough customers exist?
You might have a great idea for a business niche, but if the population it serves is too small, you won't be likely to see much success. Determine that you'll have enough customers to keep your business going. Doing a break-even analysis can help you make this call.
Is your target market underserved?
You're going to face stiff competition in an oversaturated market if a lot of other businesses are already addressing it. To stand out, it's vital to have a business niche that is needed yet currently neglected. If you open a business that consumers have been looking for, you're setting your company up for quick success.
Research the Competition
While you don't want to try to break into an oversaturated market, some competition is a good thing. It shows that there is a customer base for your niche. Some healthy competition will help you determine what customers want, and it can keep you on your toes.
Checking out your competition helps you determine if your niche is viable and gives you useful information for moving forward. For example, you may discover that your competitors haven't done a good job marketing in your chosen niche. Perhaps they have low-quality or very little available content.
Check Potential Profitability
Whether your business niche can be profitable is a crucial determination to make before you launch. Discovering profitability will let you know if the niche is viable. Obviously, the more popular your niche, the better. Figuring out profitability will also help narrow your options if you're still trying to decide on a niche.
A good way to determine profitability is to search online for the products and services you're considering. If you discover a decent supply that appears to be selling, you've likely found a profitable niche.
When conducting the research, determine how much you can potentially make by what items are selling for, minus estimated costs. You may have a great idea, but it may not be a profitable niche to pursue if there is a very low markup on the product. On the other hand, a healthy markup can lead to your ideal business niche.
Focusing on a competitive, potentially lucrative business niche allows you to easily identify your ideal customers. Having a niche also results in you building expert status in your industry. This leads to customer trust and loyalty and repeated sales.
Thinking about starting your first business? Check out our article 10 Profitable Small Businesses With Low Startup Costs, for some ideas. If you need to form a business entity once you've identified your niche, Swyft Filings can help. Take a look at our easy online registration process for LLCs.