You may have heard about niche markets, but don’t really know why you should niche down your business or how to do it.
Many businesses fail because they don’t focus on a targeted audience, they try to sell to everyone, spreading themselves too thin. If instead their efforts were directed at providing a product or service that could solve the problems of a select group of people, they may have enjoyed success instead of failure. Finding the perfect niche, the sweet spot in the market, is the key to success.
What does "niching down your business" actually mean?
A niche market is a targetable, focused portion of a market. The best niche markets are those not being fulfilled by mainstream providers. Examples of niche markets could be:
Another way to think about a niche market is a select group of potential customers with specific needs that form part of a larger group.
The trick to selling big, is to sell smart. By finding a niche that has a mass interest you will be able to convert far more potential clients in to paying clients that you would if your market wasn’t niche. The idea is to be a big fish in a small pool, not a small fish in a big pool.
Finding your niche market
One of the most difficult aspects for many, is finding their niche market. Here are some strategies to help you solve this problem.
1. Follow your passion
You may have a master’s degree in an area that you have completely lost interest in. Although undoubtedly you could create a business around your qualifications, the chances are it wouldn’t make you happy. To be successful in your niche market, you need to be passionate about it.
Start by writing down everything you are passionate about, everything you enjoy doing in life, from spending time with your family (or the dog), to sports or crafts. Perhaps you like DIY or learning how to do new things, gardening, renovating old cars, whatever your passions are, write them down.
2. Identify problems you can solve
Once you’ve written down all your passions start thinking about the problems you and others encounter that are related to them and currently don’t have an easy solution. Once you’ve identified some problems think about how solutions could be found to them. The solution could be a single product, a series of products or a service.
3. Follow the money
Having sparked a few ideas for niche products or services think about which ones people would really be willing to pay money for. Remember here that ideally you want to create return custom, so you build a loyal customer base.
4. Research your competitors
Do some internet searches to determine the competition. Also test keywords and find those with high search volume but that have low competition and little to no paid advertising. You can also look at products and services in your niche on Amazon, Clickbank and other specialist online retailers. Don’t worry if you do find some competition, it means that you’ve probably found a good niche. A little competition is healthy, a lot however is not such a good thing. Really look at the competitors and see if there is a way you could make your product or service unique, so it stands out. This can be done in several ways:
Test your idea
By this stage you should be able to choose just one idea to try out. You can do this by setting up social media pages and asking for feedback. Build a landing page for a pre-sales website, while developing your product and then funnelling traffic to it from your social media. You may get better results by doing some paid social media advertising which can be done for a small budget. If you get a prototype product made, you can create a “go fund me” page to build interest around your product and generate lots of pre-sales.
In the bag
Once you have verified the viability of your niche the sky really is the limit. Now you can build a fully functioning website, ramp up production, create a blog and rev up your social media presence to build a reputable brand around your niche.
There you have it, all that is left for me to do is wish you good luck with your new niche business!
If you want to read more about this subject than I highly recommend the following book.
This book about the blue ocean strategy may also be of interest.
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