A profitable business is every entrepreneur’s dream. But few business owners can say theirs is thriving. And of those who can, most believe it’s because they found their niche market.
Related: Be your own boss with these 7 home business ideas
What’s a niche market?
Copywriter Michelle PW wrote about market niche in one of her Love-Based books:
“The reason a lot of marketers recommend ‘niche-ing’ down your target market is because the more focused you are when it comes to who you’re selling to, the easier it is to sell to them.”
Rather than trying to sell to everyone, you’ll have more luck if you go after a specific group.
One advantage of marketing to a niche is language. It thrills potential customers to hear you speak their language because it establishes a common ground and builds trust. And you can only do this if you know your niche.
If you haven't formalised your business idea yet, keep in mind that you will need to have an official company before you can sell anything. If you need help with that, we put together a guide on creating a company in Australia in this handy article.
So, how can I discover what my niche is?
Finding a niche isn’t rocket science. Just follow these steps.
- List passions of now and passions of old.
- Identify your target market.
- Look for pain points.
- Research your competition
- Test it with a minimum viable product (MVP).
Let’s dive into the details of finding — and proving — your market niche.
1. List passions of now and passions of old
What do you love to do? Or, what would you love to if you didn’t need to work? Think of things you love doing and ask yourself if you can turn them into a business.
Grab a pen and paper and start writing.
Start with what you love to do. Then, add why you like doing it.
Some things we loved to do as teenagers get left behind as adults. Not as a conscious decision; we just get swept up in adult responsibilities. Revisit your youth and discover what activities made you happy. Write them down.
Ask yourself if you’ll be able to do any of them for hours, or if you’ll begin hating them. You don’t want to be in a situation where doing the thing you love doing becomes the thing you hate. Especially if you’ve made it your business.
2. Identify your target market
Your target market is the group most likely to buy your product or service. Think of who’d benefit most from the product or service you feel passionate about. Are they:
- Working millennials with college debt?
- Retired baby boomers with time on their hands?
- Busy young families with at least one child?
You can use Google Trends to determine if their need is constant or fluctuates based on things like the seasons or end of the financial year, for example.
Simply visit this page, choose the region and enter your search terms. Google will display the interest in that topic over the last 12 months.
3. Look for pain points
Once you’ve identified your target market, you must discover their pain points. This is a problem common to many in the group that is urgent or hard to solve.
Pain points keep individuals and businesses from operating smoothly, costing them time, frustration and possibly even money. If your niche offering can stop that pain, consumers will beat a path to your door.
Two ways you can discover pain points are:
Meet with your target market
Ask them what they find frustrating about running their lives or business. Showing them you care about their situation will inspire loyalty to you and your offering.
Eavesdrop on social media
Social media groups and forums are a great source of information. Join the groups that people in your target market belong to, noting recurring questions and answers. Some pain points can take several steps and involve multiple professionals to resolve. Can you offer a single-step solution?
Start with places like Quora, Reddit, Facebook, and LinkedIn groups. If you prefer meeting people face-to-face, then try Meetup, where you can find local groups of all kinds.
4. Research your competition
Your competition can tell you a lot about your chances of succeeding with your new product or service. Look at a few businesses that are already offering something similar. Check out:
- Their products. Is there something lacking that you could add?
- The way they’re doing things. Maybe you can offer something extra.
Whether your business idea targets consumers or businesses, look for a need that’s not being filled or a problem you can solve.
5. Test it with a minimum viable product (MVP)
Once you have a product or service that is unique, create a basic version of it that satisfies the need or solves the problem you’ve identified.
It might not have the bells and whistles of your dream product, but you can use an MVP to gauge the interest of customers. The response will help you decide whether to continue developing the product or stop and move on to something else.
Learn more about creating a minimum viable product, including low-risk ways to roll it out, here.
Now start telling people
A landing page can be a great way to capture the attention of your niche market. Once built, you can run social media ads that lead to it, where people can enter their details for more information.
And while it can be hard to get in front of businesses, you can use LinkedIn to build a network of people who require what you have.
You can also use LinkedIn to share articles that tell your niche market how you can solve their problems. Join groups that will benefit from your expertise. Start your own group and you’ll quickly become known as an authority in your niche.
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Why should my business niche when big companies don’t?
Actually, you’ll find those large, successful companies did niche in their early days. For example:
Coca-Cola
Coke started by selling the soft drink as a brain tonic designed to make you smarter. The company now has a huge portfolio of beverages for a variety of niches, from dieters to health-conscious consumers.
Apple
They initially sold hobby computers and now also sell phones, tablets, audio devices and media services.
Amazon
You can buy just about anything from Amazon today — even computing services — but it started out selling books online.
Each excelled in their niche because they weren’t distracted by their larger marketplaces. They perfected their offering and advertised only to those who wanted their products.
Niche markets exist in all industries
Niche markets exist because no one solution fits every consumer. Define your passion and identify the pain point that no one else is addressing right now.
Then promote your product or service with a landing page and by speaking at conferences, trade shows — anywhere your target niche gathers. Stay focused and in time, the news will spread. After all, it worked for Coke.
