Finding your business niche is your first step to success, as it addresses a gap in the market or caters to a specific need. It also gives consumers a clear and direct message about what you do—one that they are more likely to remember. You can take a niche approach in terms of your area of operation, the audience you cater to and even the platform you sell through.
Take a look at how you can find your business niche.
1. Explore your passions and skills
- Start by making a list of what your passions and skills are. Then you can craft business ideas that match them
- If you start a business that you are passionate about, it will motivate you consistently and push you to achieve more
- When you put all your effort into a niche idea that you feel strongly about, you instantly boost your chance of making profits
2. Conduct market research and see where your idea fits in
- Market research is important for the success of any business. It gives you necessary data about the market segment, the demand for supply, and the competitors operating within your chosen niche, as well as availability of business finance
- This will help you zero in on a target audience and help you define your USP better. It will also tell you if your niche has been explored by several other people and has lost its novelty value. If this happens, go back to step one and identify a new niche or think of a way to tweak your offerings
- You can also learn from how other businesses have performed in the same sphere. This will give you a head start and prevent you from making the same mistakes
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3. Study your competition and see if you can offer something better
- Once you have narrowed down on your focus area after your initial market research, study your competitors in detail
- See how their products are priced and marketed, and calculate what percentage of the market they are tapping into. Also see how much you will need to pay for operation-related activities or services such as inventory costs and distribution costs. Consider how your competitors pay for this, and look into various business loan options
- Then consider your own offerings and think about whether you can offer your target audience something better than your competitors. This may be in terms of lower pricing, a free product or service or a more evolved design
4. Calculate profitability in your chosen segment
Study the various costs attached with the product or service you are thinking of providing. This will help you understand if it a viable proposition.
- Make note of the laws and market forces that can affect your business's bottom line and also pay attention to profits of similar firms
- You can identify profit patterns and take the necessary measures to ensure success for your SME
Additional Read: How to get a collateral-free Business Loan with ease
5. Know that you cannot please everyone and test your business idea
- A product or service is bound to receive positive as well as mixed, and even negative reviews, initially. Don’t forget that a niche business is all about gaining profits from repetitive sales made by a set of loyal customers. So, take negative feedback in your stride and focus on the audience you’re catering to
- Before setting up shop, be sure to test your idea. This will give you valuable feedback and will allow you to eliminate any glitches. This way, when you start operations you will have less to worry about
- This activity will also increase transparency and build trust with customers
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