Niche Marketing for Startups
One of the critical success factors for small business is finding a profitable niche or a narrowly defined group of users. Competing in a broad market segment against big and established companies would result in immediate failure.
In the words of Blog de Groot, entrepreneurs should dig deep for small business ideas before starting the wrong business. Here’s a simple guide about finding your niche market:
Identify the Common Needs
There must be common needs related to your business that are somewhat different from the general market. A good niche example comes from Small Business Trends:
Here is an example of niche marketing: a brand new print magazine, called Magazine Soho. The publication targets not small business — a broad category to be sure. No, it targets a segment of small business: Soho’s — small office, home office workers. And with a particular geographic emphasis on southeastern Wisconsin, USA.
More importantly, you should check if the product you are offering meet the needs of this group and if it is better than the competitors.
Measure Profitability
Before targeting a specific niche market, you should see first if this particular niche has enough paying customers who can avail your products or services. If not, find other niches to conquer. Also, the level of competition has a significant bearing on profitability. Check how many competitors are fighting to win in your chosen niche. Remember, a niche is a relatively small segment. Having fierce competitors will easily erode your profit margins.
