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There’s never been a better time to be an entrepreneur. There’s also never been a more competitive time thanks to the 28 million small businesses in the United States today.
With the ability to work anywhere in the world, thanks to the Internet, new businesses pop up every day. Our markets are becoming saturated with companies that do exactly what we do. As a business owner, how can you compete?
You find your niche.
Defining a Market Niche
I can see you rolling your eyes. You know what a niche is. It’s that mysterious market segment somewhere out there identifying a need or want not being addressed by your competitors that only you can fill.
If that didn’t sound elusive enough, you also know that committing to a niche market means confirming that your product or service isn’t for everyone. It has a specific end user.
But, what if your product really can be used by everyone? Isn’t it your responsibility to make sure you don’t limit your market?
Why Niching is Important for Your Business
Here’s the hard truth. You don’t have an unlimited marketing budget.
Don’t feel bad. Coca-Cola doesn’t either. But, when you’re marketing on a budget, it’s even more important to find a specific target and speak directly to them. Why? Because targeting everyone is too expensive. You need a marketing message so clear that it paints a picture of exactly who you work with and why. This is your niche, and as soon as you define and share it, the people within your networking will finally understand who you help and send those people your way.
How to Determine Your Market Niche
How do you choose a niche? It’s easier than it sounds. Three factors help determine what your target should be.
1. Your niche sees exponential results from your products or services.
Imagine you’re selling a magic pill that gives people unlimited energy without side effects. Who would the pill impact most? A hyper teenage boy or the mother of an infant who hasn’t slept for more than four hours in six months?
This scenario isn’t limited to imaginary pills. Make a list of your customers who see radical results from your products or services. This gives you a starting point for finding your niche.
2. Your niche has the resources to pay you on time.
It doesn’t matter that your products or services radically change the lives of starving artists, if they can’t pay you, you don’t have a business. You built your business because you bring value to customers. Don’t give your time and resources to people who can’t pay.
3. You’re passionate about helping your niche.
The third key to finding your ideal target is often found in your why. Why did you start your business? What makes you get out of bed excited to get to work? The people you enjoy working with will get your best work, so your niche should take this into consideration.
Now that you have the three elements, look at current and past customers. Who fits all three categories? What industries are they in? Is there a shared demographic, geographic, or psychographic commonality? What pain points lead them to buy from you?
Did you find a customer where the shoe fits? She’s your niche.
Your Niche is Your Target, Not Your Market
Anytime I mention the word “niche,” business owners get nervous. They’re scared that choosing a single target in a specific industry or demographic will too narrowly limit sales possibilities. To this concern, I share a favorite niche story.
In 1994, a 30-year-old man quit his Wall Street job to start an internet business out of his garage. He made a list of ‘top 20’ products he could sell and chose books because they were low cost and always in demand. He focused his marketing on people in rural areas with no library.
This start-up story is that of Jeffrey Bezos, founder of Amazon. Today they’re the world’s largest online retailer with annual revenues over $60 billion. Do they still sell only books? No, but Bezos understood from the start the power of the niche.