Identifying your niche is one of the most important decisions you have to make for your business. Our friends over at www.findmyworkspace.com give you tips on how to find your perfect match!
Who is your target audience? Many business owners brush off this question with the answer, “Oh, we offer our products and services to everyone and see who is interested.”
Some entrepreneurs actually think that it is smarter not to limit their market to a specific group, as of course, we all want to grow our business as much as we can. However, this is not very wise or sustainable in the long run. Why?
First, this can lead to ineffective marketing, as you will not be able to connect to any specific audience. Your clients want to feel that you ‘get’ them- their needs, goals and targets. People are looking for a personalized experience and might be dubious with working with you if all you offer are generic pitches and canned answers.
Second, you will not be able to develop your expertise. Potential customers are keen on finding experts in their line of work or industry. Say, you are a website creator- that is good. But if you specialize in building fashion pages catering to working women- that would be even better for a merchant who caters to such market. If you offer a one-size-fits-all package, it’s either you end up offering a boring run-of-the-mill product or service; or you need to stretch yourself and your team too thin in trying to learn the requirements of the different kinds of customer you have.
Third, it can actually limit your growth potential. Some businessmen are afraid to focus on a niche, thinking that it might hinder their sales and profit growth. However, it’s the other way around. Not establishing your target market will limit your profitability as you cannot offer experience and knowledge in a particular field. You can successfully expand your customer base only if you are deliberate in your networking efforts- you know what kind of clients you are looking for and which industry to concentrate on.
Now that you know why it’s imperative to identify your niche, we share with you the steps on how to do it effectively.
A comprehensive SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis can help you fill in the answers to necessary questions:
- What are your strengths?
- What market do you have the most experience and knowledge in?
- What are you passionate about?
- What energizes / inspires you?
Especially for first-time entrepreneurs, it is advisable to focus on what you are good at and have some experience in. This can serve as a strong foundation for your venture, as you don’t have to start from ground zero.
Have you worked with a particular market before? Do you find excitement in working with that group of people? Then you will enjoy meeting their needs with your products and services.
It has been said again and again- being an entrepreneur is not easy! There will come a point when you might be tempted to quit. If you are not passionate about your industry or solving the problems of your niche, your odds of quitting will be great.
- What tasks do you find most challenging?
- Are there particular people that you have a hard time working with?
Needless to say, stay away from your weaknesses! It is necessary to consider your weaknesses as you don’t want to fit a square peg into a round hole.
This might sound like a no-brainer, but for those eager to start a business, it might be tempting to grab any opportunity that presents itself. It is not a wise move to build a venture around something that you are weak at, no matter how profitable you think that market might be. Remember that there is a very big chance that your lack of experience will eventually catch up with you.
- Is there a problem that you can solve?
- Is there a need that you can meet?
- Is there a big profit potential?
Identify problems that your target market is experiencing and check if you can solve them. You can build your business plan from there.
Are there others catering to the same need and same market already? Or is there still a big slice of the pie available for you to grab? How can you stand out?
Conduct a thorough study of what you want to offer and ensure that you indeed have the resources and capability to maximize the opportunity.
Allot time to talk directly to people belonging to your potential target market. Observe them closely. Keep your eyes open for that golden opportunity.
- Who are your direct and indirect competitors?
- Is the demand stable?
- Is this just a fad?
- Are there any legal and ethical aspects you have to consider?
Having competitors is good- it means that there is indeed money to be made from that niche. But ensure that there is room for one more player in the market.
Reflect on the sustainability of your business idea. You don't want to invest everything into a product or service that might be obsolete after six months.
If you decide to ride on a trend, be sure to have a back-up plan. Ask yourself: will there be another use for my excess inventory or tools? Will the profit I make in this fad enough to cover the possible losses?
A mistake that entrepreneurs often make is looking at their direct competitors only. Widen your research to include indirect competitors and substitutes, as well. For example, if you are providing content writing services, you might also want to take a peek at other businesses offering video content to the same audience.
Finding your niche is not a close-ended process. Opportunities and situations are constantly changing so you have to be flexible and sharp.
When you are really on top of what your target market needs and wants, you can tailor your product and service to be as unique as possible. And you can grow from there- by adding more offerings to your clients.
Thriving in your niche is a win-win situation- you get to give your best work for people you like and work well with!
by Gemma Reeves
Gemma Reeves is a seasoned writer who enjoys creating helpful articles and interesting stories. She has worked with several clients across different industries such as advertising, online marketing, technology, healthcare, family matters, and more. She is also an aspiring entrepreneur who is engaged in assisting other aspiring entrepreneurs in finding the best office space for their business.
Check out her company here: FindMyWorkspace