You want to start a business, or you may already operate a small business, but one thing that may be tugging at you is how to choose a niche.
What is a Business Niche?
It is difficult to find success if you are trying to serve or sell products to everybody in the market. You cannot focus on your ideal customer when you have not narrowly defined the type of person you want to serve.
A business niche is a narrower and well-defined area of a wider market that your business serves specifically.
Use this as an example – you own a refrigeration equipment repair business. If you loosely describe your services as refrigeration equipment repair, who would you serve and market to? The broad market consists of people that own refrigeration equipment. The narrowed-down niche market includes a specific type of customer (residential or commercial), and to narrow it down further (“niche it down”), your customers may be residential and owners of brand-specific higher-end refrigerators or ice makers within a specific locality. This narrows your business down to a niche – you don’t repair or sell equipment to just anyone who lives anywhere. You market your business to specific target customers that are attracted to your rates, to your specialty, and your marketing.
How do I Choose a Niche for my Small Business?
Your “Why” is an Integral Part of Your Niche
Do you know your business “why”? Your business why dictates whether decisions are made, or goals are set within a common cause – call it your business GPS. When you don’t know your “why,” which includes your passions and values, you cannot choose a niche. Your why is truly your mission, while your niche is who and how you serve in your market – your unique products, services, and your customers.
If you don’t know your small business “why,” start here.
Steps to Find Your Niche Market
1- What is your business “why”?
How does, or how will, your business serve your why?
Using the example above, you might be passionate about working on high-end refrigeration equipment and doing so with integrity and without price gouging. Your “why” might be to change the trajectory of unethical history in your industry. In this case, your why might lead you to never double your rates or to never base in-house decisions on monetary means alone.
2- Identify the unique problems that you can solve.
You may have always been passionate about the technology side of refrigeration, but you may also have felt led to help affluent customers that live in a specific area and are busy entrepreneurs who may need extreme flexibility in your available service hours. The problem you resolve: customers do not want you to work in their homes when they are absent or busy. You offer non-standard service hours.
You may also have been drawn to specific name brand equipment that you feel passionate about serving and promoting. Other businesses in your industry may not focus on these particular brands or may avoid them altogether, which leaves a gap in knowledge of and availability of these products and services in your area or industry. The problem you resolve: customers lack consumer choices. You expand product availability.
3- Identify your customers.
Describe your ideal customers.
If you are already in business, identify who are your most loyal and happy customers? Create a profile of your top or prospective customers – where do they live? What is their typical income range? Where do they like to shop? How old are they?
Are your customers accessible? This means you can easily and affordably market to them. If you use marketing tools found on many of the popular social media platforms, you should be able to identify and target the demographic information and profile of your ideal customers.
4- Is your market saturated or is it potentially large and available?
If you serve a highly saturated niche market, you’ll have trouble targeting your ideal customer, and you’ll find the market difficult to break into. You will likely find yourself digging deeper, going creative to find markets in fields and areas that are practically untouched, underserved, or neglected.
If you’ve determined that your potential customer base is available, it must also be large enough. The size and mass of the potential market must warrant the investment that you will make to enter that marketplace.
5- Check out your competition
Search the keywords (descriptive words) of your business niche to see what the competition looks like.
You’ll find one of these three things when you perform this search:
- If many well-ranked sites pop up on page one of your search it may indicate that the market for your niche is saturated. You may need to dig into your niche a bit more.
- If no sites are available for your keywords, use caution – this can mean two things, one is that opportunity is available, or it could mean that other businesses have already tried and failed in your niche.
- If some sites reflect moderate ranking in your keywords, this could indicate businesses that are much smaller than yours, or those that offer lower quality services – or perhaps their websites may look outdated and cheap. This may indicate the potential for profit in your niche.
Test Your Niche
You have identified your “why,” as well as the unique problems that you can solve, the availably of potential customers in your market, and you’ve scoped out the competition – all of which have led to your choice of business niche. Now it is time to test your niche theory in the marketplace.
Online tools such as Google Ads may be a great place to start online. You can create a free account and test the strength and monetary cost of your ads through this product.
Create a one-page website, a lead or landing page, that promotes a free or greatly reduced price product related to your niche to test market strength for your specific niche product or services.
Try testing your market niche market through today’s most popular social media platforms.
Niches Do Change
Set a date to review your niche, as they do change! When you find that your niche market has changed, change your target marketing strategy.
Talk with Other Business Owners – We’re Here to Help
The dilemma of how to choose a niche for your small business is not central to you or your business. We all feel the need to create visible niches in our industries, and what better way can we gain clarity by interacting through tried and true business relationships?
We get the importance of your unique niche, and we’re here to support your development as an entrepreneur and small business.
Master Networks’ mission is to lead a movement of learning-based, service-oriented entrepreneurs and business leaders.
Our commitment is to educate, equip, and empower our members to build a legacy beyond the business!
If you have any questions about membership, please call us at (512) 361-1315 or email ADMIN@MASTERNETWORKSTXC.COM.