To find your business niche, you need to start by asking yourself this simple question:
If someone asked you to name the one thing your company does exceptionally well, what would your answer be?
If your response takes more than a minute and involves counting things off on your fingers and toes, you may have a problem.
One of the most common traps small business owners fall into is going too broad with their products and services. This is an impractical strategy that quickly burns through limited resources like time, energy and money.
Ironically, it is when you are trying to be the best at everything that you are most likely to fail at becoming the best at anything.
Stop trying to think BIG. Instead, focus on identifying that one thing you can do BEST.
Why is it so important to find your business niche?
This one thing represents your BIG opportunity. You cannot possibly do everything and compete with everyone. But when you find your business niche you will have a huge competitive advantage.
Having a niche lets you focus your resources on providing the product or service that is most valued within a more targeted market. Ultimately, this enables you to drive your business forward more quickly and efficiently.
Once you find your business niche, you will be able to:
- Use your time and money effectively
- Clearly describe what you do and sell
- Set yourself apart from the competition
- Target your marketing at a precise audience
A Great Example
I use the example of two restaurants that opened in my neighbourhood at the same time.
The first place had a four-page menu that included authentic Italian cuisine, Greek dishes, and common pub fare like chicken wings. It went bankrupt in less than a year.
Everything tasted great but I never picked that restaurant. When I wanted Italian, I went to an “Italian place”. When I wanted Greek, I went to a “Greek place”. And when I wanted chicken wings, I went to a pub.
The second place served only pizza and salads, but they made everything in a brick-oven, used local-sourced ingredients, and offered gluten-free crusts.
I felt less guilty about feeding the kids “healthy” pizza so this place became a go-to option for family dinners and take-out. Ten years later, this restaurant now has three locations and an expanded menu that includes specialty desserts, like homemade s’mores, that are made in the brick oven.
To find your business niche you must find your passion!
Running a business is HARD work. Ultimately, it is easier to endure long hours and endless challenges when you are doing something you really care about.
Going back to my restaurant example:
That pizza restaurant owner really does have a passion for pizza. In fact, she has competed in – and won – international pizza-making events (Yes. These are a real thing!).
Is pizza the only thing she thinks about? I doubt it. She has an adorable son who is definitely closer to her heart than cheese and toppings. But it is clear that she deeply appreciates the “art” of pizza making.
When I say “find your passion” I am not talking about spending months on a mountain top searching for the meaning of life. I am saying that – to find your business niche – you should start by pondering your personal interests.
Ask yourself questions about the things that are important to you. And try to squeeze at least 8-10 “passion points” out of your answers.
- What do you do in your free time?
- What organizations do you belong to?
- If you had time to learn something new… what would it be?
- Which of your skills do you take the most pride in?
- What issues are most important to you?
Find a problem you can solve
Once you have that list of things that ignite a fire within you, the next step is figuring out which passion can most readily translate into a profitable business.
Successful businesses solve problems.
- What problems, or pain points, are people having?
- How could you solve those problems?
As you focus on problem-solving, potential opportunities should begin to emerge. The objective is to uncover a pain point within the market that aligns (in some way) with your skills and interests.
Research – Research – Research
In today’s digital world, there are lots of relatively simple ways to research the potential strength of your market.
Start by doing some keyword research. Search out related keywords and see what pops up. This is a great way to uncover specific things people are looking for, within the areas you feel passionate about.
Online forums are a great place to learn more about the questions people are asking, and the problems they are trying to solve. Search Quora. There may also be forums that are directly related to your niche, but Quora is a good place to start.
And don’t forget about one-to-one conversations! To find your business niche, you may want to start by talking to existing customers. Questionnaires and surveys are a brilliant way to uncover pain points within your existing clientele.
Check out your competition
It is unlikely that you are going to find a niche so unique that no one else is in that space. In fact, if there are no competitors, you should ask yourself “why not?”. No competition may mean that your niche is too small to be profitable.
As you look at what competitors are doing, put yourself in the headspace of your ideal customer.
- What customer problems are competitors already solving well? These are things you want to do too. This isn’t about copying their ideas. It’s about identifying their strengths so that you can find ways to incorporate these positives into your business. And, of course, improve on them!
- What customer pain points still exist? Check out the comments people are making about competitors. This is a good way to uncover potential gaps – opportunities to solve problems that competitors are failing to solve.
Dip your toe into the water
If you are already running a business, making a sudden, dramatic change of direction may cause more harm than good. And if you are a new startup, jumping straight into the deep end of a niche market can chew up your money quickly.
I recommend taking a more prudent approach. Give yourself a conservative budget. And take the time to make a business plan.
Having a solid plan will help keep your activities on track. And, contrary to popular belief, pouring a ton of money into something is NOT necessarily productive. In fact, keeping your financial investment small can bring big benefits.
A small budget keeps you focused and encourages you to get creative about marketing, production, sales, etc. It keeps your risk low and your efficiency level high! And it ensures that you don’t go broke before you have a chance to succeed.
Finding your niche is not about limiting your business; it is about focusing so that you can use your resources wisely.
Over time, a niche business can grow by expanding in ways that still align with its original purpose. Scaling upwards is easier when you are working with a smaller, more defined set of products or services.
Business success is not dependent on being the best at everything. It is dependent on being the best at something that you know people want. Find your niche. Stay focused. Work hard.
Article written by Kim Scaravelli, CEO, Trust Communications Inc.
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