Finding the right niche for your small business

The secret to finding the right niche is solving a simple problem better than anyone else does, as we outline here.

Finding the right niche market is often the breakthrough moment for a business idea

Finding the right niche market is often the breakthrough moment for a business idea

You may have a good idea for a business, but unless you are focused on the right niche, you might not be able to get traction. One common problem I’ve often witnessed in new businesses is that they are overly general. They want to maximise their possible customer base, but in so doing, they become too general to offer excellent value to anybody. In the early days of your business, it is important to find a niche market, and then be their dream come true. If you amaze your early customers, it’s easier to have strong support and word of mouth as you expand the scope of your business. But if you start out trying to be everything to everybody, you’ll likely fail sooner or later.

Let’s say you want to create an online business that threatens the market share of a large retail empire like Office Depot. You know that retail is suffering right now and you surmise that creating a digital answer to their business model will attract customers looking for greater convenience and more options. However, it’s hard to start from scratch in a market that large. Chances are you won’t be able to beat Office Depot at its own game as a start-up. Instead, you’ll have to start a bit smaller.

Why not find a subset of the office supplies industry that you can understand from the bottom to the top, and gradually learn to dominate. In a situation like this, I’d recommend that you might choose small business filing trays. At first blush, that might seem like a niche that is so specific that it will limit your audience. But this might not be the case.

The internet changes the way business is done. We all know this, but not everyone acts on that knowledge. In the old days, if you had a business that just sold filing trays, you wouldn’t get much business. Brick and mortar stores have to supply goods that are relevant to general interests. On any given day, there will only be so many people who want to buy a filing tray, so a store that only sold those would not stay in business.

But today, the internet makes the world marketplace very small and concentrated. Nobody cares where their goods are coming from, so long as they arrive quickly, are available at a good price, and are of high quality. By being an amazing example of a specific kind of goods or services, you’ll have access to a whole world of customers.

So don’t try to create a small business that completely revolutionises an industry overnight (unless you have massive funding and creative force, in which case why are you even reading this?). Instead, try to solve a simple problem better than anyone else in the entire world solves it. People will recognise the excellence of what you do, and will support you as you build, grow, and develop yourself into something larger. In the end, you may really change the industry you set out into. I wish you good luck!

Nominations are now open for the British Small Business Awards 2017, the leading event celebrating the brightest stars in the SME sector. Click here to enter, and make sure you get involved today using the hashtag #BSBAwards. Good luck!

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