When it comes to starting a new business, it can be very easy to get swept up in the excitement of it all; however, there is a crucial first step that all business owners need to take to ensure the success of their venture.
Finding a niche that caters to a specific need gives your target market a very clear and direct message about what you do and who you sell to, which will solidify your market appeal and branding.
So, if you’re looking for ways to make your small business thrive, then start off on the right foot by nailing down your niche with these tips.
Follow your passion
It is much easier to be authentic and make genuine connections and relationships when you’re promoting something you are already passionate about. Many people switch between passion projects, moving from one interest into the next seamlessly. After a long and successful career in pro poker, several top players are now branching out into alternative career paths, such as being a full-time YouTuber creating content around science, space, physics, and game theory. By following their passion and carving out a niche around their favorite topics, these pros are enjoying great success as content creators. Following this path is a great way to explore your own interests while creating a successful business at the same time.
Define a need
Once you have identified your passion, it’s time to define a need within that niche. Look for gaps in the market that need companies to solve a problem for your target audience. Look at areas that are seeing an upward trend in growth and profitability and find a different angle or approach to existing businesses. For example, Diapers.com identified that parents in New Jersey needed diapers delivered to them; this company soon became considered an essential service and ended up being sold to Amazon for $545 million.
Do your research
Once you’ve found the “thing” that gets you excited about this business, conduct some market research. This will give you the data you need on the demographic of your target market and the demand for supply. It will also help you to determine your unique selling point (USP) as it will show you what it is that sets your brand apart from the competition. Spend some time working out whether your niche is on an upward trend or if it has lost its market value so that you can look for new ways to present your products and services.
Study the competition
Market research is essential for narrowing down your niche, and once you have done that it’s a good idea to study the competition in detail. Find out how similar brands have succeeded and failed in your chosen field and use that information to inform how your business will proceed. It is good practice to understand other businesses’ mistakes because this will prevent you from making the same ones. Consider the pricing of their products and services and identify how much of the market share they are tapping into. Compare your own offerings to your competitors and really think about whether you are offering something better to the target market in terms of pricing, quality, or design.
Profitability is the defining factor in whether you move forward with a business idea or not. After all, if your niche is not profitable, then there is no point in pursuing a business in that market. For a small business to be profitable, the target market and niche need to be big enough to enable it to make money selling products and services. In other words, there must be enough customers to sell to, to make the business worthwhile.
Starting a business is an exciting journey, made even more so when you are following your passion and helping to solve a problem for people. Nailing down that niche is the first step to business success, so it is well worth the investment of time and effort to get it right.