There are several common barriers to starting a small business. Among them a lack of experience, not enough dedication, judgment, knowledge and financial resources. All of these can be serious stumbling blocks, but many entrepreneurs pass these with flying colors. Sometimes one other barrier is the most difficult of all to address - Identifying your niche.
There are existing vendors for most products and services. Customers already know where to buy the things they need or want. Most are satisfied with their current suppliers. Often there are a variety of vendors to meet their needs. In other words, the saturation point may exist for most things. Why is that important to the new startup? It is important because your general target market may already be satisfied with their present vendors. Changing customer buying sources is not easy to overcome.
Seek Out Advantages
So, Finding Your Niche means that you need to find some advantage over the existing vendor population to cause customers to start buying from you instead of their present supplier. Not being able to clearly identify an advantage over present suppliers is a common cause of new business startup failures. How do you approach trying to find your Niche? Here are some thoughts.
Differentiate Products And Services
Two principles are important in finding your Niche. You must be able to differentiate your products or services from your competitors in a meaningful way, and you must be able to reach the decision makers using an efficient, economical advertising venue.
- Differentiation usually is found by identifying an advantage in one of three ways: through Quality, Service or Price. You can’t be the best in all three measurements. So, start by selecting the business philosophy that best fits your business concept.
- Find something distinctive and advantageous to a slice of the general target market you need to reach. It doesn’t always have to be dramatic to still provide an appeal to enough of the target market to satisfy your sales/revenue goals.
- Once you have identified your advantage you have to find a cost-effective venue to reach those customers and close the sales. Often you have to test the available venues to determine which is the most cost effective. You might need to hire a marketing expert to help you refine your marketing approach.
- One last thought, our clients often say their advantage is going to be to provide superior service. Competitors that have been in business for a number of years probably haven’t survived by providing lousy service. If service is going to be your primary business philosophy, make sure you understand what that means and what it will cost.