Over the past few weeks, we have investigated the several stages of developing a business idea from exploring business opportunities to conducting a SWOT analysis to determine areas for improvement. We also emphasised the importance of understanding project expectations versus reality. The focus for this week is on finding and establishing your niche.
A niche market is a segment, area or activity of a larger market and/or industry with specific needs and opportunities for which a business is best suited. This is key to starting a successful business. An example of a niche market is when you focus on selling and delivering only freshly baked pastries in a market saturated with stores that just sell pre-packaged pastries.
The business world today is characterised by businesses and entrepreneurs trying to out-do their counterparts in terms of product, services, and profit. Many emerging entrepreneurs intend to be the best in their respective industry and struggle to realise that this might not be entirely realistic. This is because as a start-up, your main focus should be on providing product and services you are skilled at to attract customers who need that specific area of expertise rather than a generic set of consumers whose needs you may be unable to satisfy.
It is human nature to attempt to be a “jack of all trades” and most times we tend to adopt this rationale when running a business. Unfortunately, this approach comes with its own pitfalls and businesses can feel so overwhelmed by what they think their customers need that they fail to see how best they can offer these services to them. This is why having a strong business plan is critical to help establish your position in relation to your competitors and customers. A business plan gives you a realistic picture of what your business is about. Watch out for our next post, where we will discuss business plans in more depth.
How can you identify your niche irrespective of your industry?
Identify the type of product/service you are interested in - this can involve listing the top three business areas you are likely to explore.
Who are your competitors? The presence of competitors is important when deciding on a niche as this helps you think of ways you can be different.
Define an unmet need and use your expertise in this field - This involves doing your homework on your target customers and how your product or service will benefit them.
Develop a business plan - This involves answering critical questions about your business and writing it down for future purposes.
Finally, do a test run of your product or service - This would help you finalise the aspect you want to focus on, how you want to deliver your product or service, and bring to light other factors you had not considered.
Establishing your niche helps your business to start small and grow fast. If you struggle setting up your niche, we at OVAC Group can help you implement a niche strategy tailored to your industry. Email us today at enquiries@ovacgroup.com for a consultation.