If your efforts to expand your business have fallen short, consider finding a niche. Niche markets are small, focused target markets that you can go after directly.
Some examples of niche markets include:
- Fitness niches such as muscle training for adults over 50
- Home repair niches such as house flippers in California
- Health niches such as young adults who are vegan
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Key benefits of niche markets
Like every successful business, you have to start small and work your way up. For many budding entrepreneurs, that means going after a niche market instead of the larger markets. For existing business owners, going after niche markets can be a small step that yields large growth. You can even add going after a niche into your business’s strategic plan for the year. This can help you stay organized.
Regardless of which situation you relate to, the benefits are the same. These benefits include:
1. Less competition
Niche markets are smaller, and therefore have less competition. With fewer competitors, it becomes easier to stand out in the crowd. You also won’t have to go up against big corporations or brands.
2. Loyal customers
Niche markets produce very loyal customers. This occurs because consumers that belong to a niche often can’t find products or services elsewhere that fit their interests. This enhances brand loyalty with your business.
3. Well defined target audience
Niche markets allow you to get more specific as you market your products. This can allow you to create marketing materials that are more focused and therefore can make more of an impact with consumers they target. For example, a popular niche market is health foods. Grocery stores like Whole Foods can make marketing materials that specifically adhere to this target market. As their niche evolves and grows, they can easily modify their marketing materials.
Key disadvantage of niche markets
As you zero in on your niche, be aware that niche markets do have some disadvantages.
One of the most notable disadvantages of niche markets is that they can be difficult to expand out of later down the road. For instance, when you’ve developed a product or service for a specific audience, reaching new or larger audiences isn’t always easy.
In most cases you’ll want to create new products or services to appeal to other markets. You can also modify your existing product or service to appeal to a wider crowd. If you decide to modify your product, be careful. You don’t want to lose any customers you already have.
It’s also a good practice to evaluate your insurance coverage when you expand what your business offers. Always review your business insurance when offering new services to customers especially.
Overall, the rewards can easily outweigh the risk. Niche marketing allows you to build a strong base of loyal customers without facing a lot of competition. To find your business’s niche market, start with some research.
Steps to finding your niche
The world is filled with so many unique topics and people, finding a niche to target can feel overwhelming. However, it doesn’t have to be. To find a strong target niche, follow these easy steps:
1. Pay attention to what you are passionate about
Everyone wants to follow their dreams and passions. In fact, it’s important to consider your passions when looking to find your niche business. If you choose a niche that you’re not excited about, you’ll likely lose interest fast. As your interest dwindles, so will your desire to keep the business going.
To avoid this scenario, consider these tips for helping you identify your passions:
Remove money from your ideas.
Ask yourself what you’d do with your free time if money wasn’t in the equation? This answer is likely something you’re passionate about.
Gain insight from your friends.
Friends can sometimes have the clearest view of what makes you happy.
Brainstorm what you’re good at.
Everyone has talents. The key is to find what you’re good at and you enjoy.
Reflect on what you love doing.
Ask yourself “What makes you lose track of time?”
2. Come up with a unique solution to a problem
Product and services that fill customers’ needs are usually the most successful ideas. Some strategies for coming up with a new product idea include:
Solve a common problem for people.
If you’ve noticed a common issue that many people have faced, try and think of a solution. You want a niche that appeals to people’s needs.
Look at what’s trending.
One of the best resources for this is social media. You can also use Google Trends and even news sites.
Improve something that already exists.
Without updates, everything runs the risk of becoming obsolete. This means there are plenty of opportunities to enhance something that already exists to fit your ideal niche market.
Fit an existing product to another existing niche.
If you’ve identified your target niche. There is usually opportunity to reformulate existing products to fit the new niche market. For example, say there’s a piece of equipment that physical therapists use to strengthen their patients muscles all the time. Can that product be retargeted to personal trainers? If it has health benefits, it likely can.
3. Evaluate if there is interest in your niche
If you’ve identified the niche you want to go after, you’ve reached an important point in your journey. Before you go any further, you need to see if there is actual interest in your niche. To identify interest in your niche, follow these tips:
Look at Google Trends.
Google trends allows you to see consumer’s interest in your niche idea over time. With this, you can identify if your niche is losing interest or gaining interest. Niche ideas that are gaining interest are obviously more valuable.
Look at similar products on Amazon.
You can easily get a feel for your niche by checking out existing products on Amazon. For instance, type in products that relate to your target audience. As you scroll through the results, you can get a feel for:
- What already exists
- What items are popular
- What items are not yet created for your market
Also, if you’re finding a large amount of products that already exist for your niche, don’t stress. This is likely a good thing and indicates a strong market. Just be sure to create a product or service that’s unique and stands out.
Look at blogs surrounding your niche’s topic.
Every blog has a target audience. To see if others are reading about your niche, do a quick Google search. If you see a large variety of blogs on your topic, then there is likely a strong market for you to go after.
Check social media.
Social media platforms are a great way to look at consumers’ interests. When consumers enjoy something or have a strong interest, they post, create pages and start groups. Therefore, if you see a high level of engagement on social media platforms surrounding your niche, there’s likely a strong market to target.
4. Put your niche to the test
Before you put down a large amount of money, you always want to find a way to test your idea. Some valuable testing options to consider include:
Allow consumers to sample your product idea
You can create samples, a prototype or a minimum viable product. Any of these are great ways to get consumers interacting with your idea. In fact, most companies have created minimum viable products. These products are early versions of a product that have enough features to give consumers a feel for how the product works. Once you have your samples or product ready, you can set up stands or booths and have consumers try them out. During this process, don’t be afraid to ask for feedback. You can even start with your friends and family members.
Surveys allow consumers to provide direct feedback on their interests, expectations and more. One way to use surveys as you go after a target niche is by evaluating the problem you solve for consumers. Through surveys, you can see if others identify with the problem your product will solve. This can help you get a feel for the impact your product will have on consumer’s lives. The bigger the impact, the more successful your product will be. After receiving feedback, don’t be afraid to change or modify your product. Any market criticisms you run into early on will help ensure your success later.
Keep the focus small for big results
Growing your business doesn’t have to be difficult, especially when there are thousands of niche markets already out there. All it takes is some research to identify which niche fits you and your business best. Once you find the right one, success is sure to follow.