Finding Your Niche Market

Posted 22 Apr

How small businesses can find their niche market.

As a small business, it’s very unlikely that you have the arsenal to promote your business to everyone in the market.  After all, you’re not Nike who can ‘just do it’, right?

For most small businesses, trying to get your message out to a wider audience will most likely cost you a lot of money with very little results to show for it.

This brings us to the topic of niching. Niching is so important because it allows you to hone in on those people who are most likely in need of your product or service. Then you can identify where they congregate, so you can easily find them, speak to them and sell to them.

Put simply, by taking the time to identify your niche, you can focus your marketing spend on the right channels, using the right messaging to get their attention and increase your sales.

With over 30 years of expertise in helping small businesses to scale and grow, we’ve seen the difficulties that business owners face when they have not taken the time to really nut out their niche market from the get-go.

Here are our tips for finding your business’s niche market:

Find Your Passion & Skillset

If you are going to start a new business or expand your existing business, you’ll want to make sure you enjoy doing the things you’ll be focusing your time on. You’ll need to identify what you are passionate about and where your greatest skill lay. Ask yourself:

  • What do I love to do?
  • What am I good at?
  • What can I offer that is of real value to the market?

Identify The Problem You Are Solving

So now that you know what you are good at and what you love to do, think about what problems you can solve for your customers. You don’t want to jump ahead and start creating a service or product purely based on what you want to do with your day. You’ll have to make sure that your product or service is actually solving a problem for people. Ask yourself:

  • What can I do that will solve a specific problem?
  • How can I deliver a solution to that problem?

Start writing down different pain points those potential customers may have and how you can best address those pain points.

Research Your Market

Now you’ll need to do some research on your ideal client and learn more about them. Ask yourself:

  • Who are they? Age, Sex, Family situation
  • Where are they located?
  • What are their values and interest?
  • What social media do they use?
  • What do they like to do?

Start to develop a picture of who your niche is and where you can most easily find them.

Research Your Competition

So you might have a great product or service to offer, but how many other businesses will you be competing against?

Write a list of all your direct and indirect competitors in the market and make note of the range of products and/or services they offer. Ask yourself:

  • Who are they?
  • Where are they located?
  • Which ones offer the same type of product or service as me?
  • Which ones offer something different but solves the same problem?
  • What are they saying they can do better than the competition?

Start to build out a map in your market where your direct and indirect competitors are located.

Calculate Your Potential Profit

Let’s face it, you’re not just starting a business for the fun of it. At some point, it must make you enough money so you can have the lifestyle you’re hoping for. Ask yourself:

  • How large is your niche?  How many customers will likely purchase from you? How often will they likely make a purchase?
  • What level of quality are you providing in comparison to the market?
  • What is a realistic price you will charge for your product or service?
  • What will your set up and ongoing operational costs roughly be?

Once you’ve answered these questions, you can start to gauge what your income, expenses and profit margin will likely be.

Identify Your Unique Selling Point (USP)

Now that you know what you want to offer and to whom, and you are confident that it can make you money, you need to determine what you want to say to your niche. How are you going to stand out from the crowd and get them to notice you and engage with you? Ask yourself:

  • Why would someone come to me to solve their problem rather than the competition?
  • What is it that I can offer that is different or better than my competitors?

By asking these questions you can start to craft your messaging.

Create Your Avatar

Let’s be honest, there are going to be some people you don’t want to deal with at all; people who won’t value your time or unique offering. A great way to determine this is by stating who it is that you really want to work with; your most ideal client; the one you to whom you want to wake up every morning and serve. Ask yourself:

  • Who are they?
  • Where do they live?
  • What do they think?
  • What do they drive?
  • What do they read?
  • Where do they work?
  • How do they speak?
  • What do they care about?

Then name them and put a face to the name. Put them up on your wall to remind yourself who your niche is.

Now every marketing decision you make from now on must speak to and serve your Avatar.  By doing this, you can make certain that you are really speaking to the heart of your ideal customer.

Of course, this does not mean that you won’t take on customers who don’t entirely fit your avatar, it just means that you will be focusing your marketing messaging, efforts and dollars on attracting your ideal customers.

Test your product or service

All that’s left now is to launch your offer to your market.  You’ll want to start developing your product or service, consider what your brand will look like and start crafting and promoting your messaging. Irrespective of if you are an eCommerce business, a service provider working from home, a retail store or a tradie on the road – the best place to start is to create a simple website that clearly tells people who you are, what you do and how they can engage with you.

Once you’ve developed your marketing elements, you can start to test different channels and messaging to see what resonates most with your niche. If your test falls short of the mark, don't scrap it entirely. Review your campaign to find where you could make teaks and improvements. Then try again.

Remember – test, measure, adjust, repeat!

If you're running a small business and need business advice or coaching on how to find and attract the right niche, contact us today.

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