Unless you have unlimited startup funding, a niche business is a “must” for a solopreneur.
Serving a well-defined niche requires fewer resources, reduces competition, and increases your odds of success.
Take marketing, for example. Niches make marketing infinitely easier. When you have a niche, you know who your ideal customer is. You understand their wants, needs. You are able to develop products and services that meet their needs.
In this article I will explain: how to create a successful niche business; what a niche is; characteristics of niches; and how broad or narrow your niche should be.
What Is a Niche?
Definitions of a niche
• A niche is: 1. a situation or activity specially suited to a person’s interests, abilities, or nature: “She found her niche in life.” 2. a special area of demand for a product or service.
• A niche is a focused, targetable portion of a market.
• Your niche is not the same as the field in which you work. For example, a retail clothing business is not a niche but a field. A niche would be “cold-weather gear for deer hunters.”
Characteristics of a Niche Business
Niche businesses cater to highly defined markets that are often over-looked, underserved or disenfranchised by larger competitors.
A good niche has five qualities, according to Entrepreneur.com:
• It takes you where you want to go — in other words, it conforms to your long-term vision.
• Somebody else wants what you have — these will be your customers.
• It’s carefully planned.
• It’s one-of-a-kind, the “only game in town.”
• It evolves, allowing you to develop different profit centers and still retain the core business, thus ensuring long-term success.
How Broad or Narrow Should a Niche Be?
A true niche is well-defined and specific, according to marketing expert Jay Ahret. There may actually be no one else doing exactly what you do, he says.
Seth Godin says that the secret to being the best in the world is to make the “world” smaller — to narrow your niche.
Godin tells the story of Alan Scott, who was the best community-focused artisan pizza-oven builder in the world. It was a niche that didn’t exist before, but it spread, it engaged people, it created a tribe that supported him. Alan was passionate about his craft and wasn’t shy about sharing it. He trained others and turned it into a movement.
Godin’s point: It’s possible that you will choose a niche that’s too small. But it’s much more likely you’ll shoot for something too big and become overwhelmed. “When in doubt, overwhelm a small niche,” Godin says.
Your niche is too narrow if there’s not enough potential business for you to reach future goals. Your niche is too broad if you don’t have a clear picture of who your customer is and what they want and need.
Here are 10 reasons to go very narrow, from Val Nelson of ValNelson.com:
1. Research about going narrow shows you’ll get better customer loyalty.
2. People pay better attention when they can visualize what you’re describing.
3. You can easily become the go-to person on your area of expertise for a small audience.
4. It’s the fastest way to grow your business and credibility.
5. It won’t take long at all to become a known expert on a subject where very few have specialized.
6. It’s easier to rank higher in a web search for unusual search terms.
7. Not only are more people finding you with a narrow niche, more of them are ready to sign on because you’re “the one” in their minds.
8. People are more willing to pay for your expertise.
9. Your brain is more able to focus on one audience.
10. You’ll be more able to truly understand their needs and how to best serve them. Focus is a powerful force that feeds you more and more over time. You won’t have time to stay current on multiple topics.