Posted on 06 September 2011.
Niches! Niches! Niches!
I hear this word everywhere…everyone says you need to find a niche, research niches, dominate niches, make new niches, etc. But what does this really mean?
There are 3 definitions of niche that are applicable to our business.
The one that is most talked about is niche: “a distinct segment of a market.” What this means is that there are different parts within different markets that are different from each other. For example in the health market two different segments are bodybuilding and home remedies. These are niches. But it can get more niche than that. Two niches in bodybuilding are “getting a six pack” and “building broader shoulders.” We can even segment a market down to the geographic region and even down to the keyword.
Why shouldn’t you go for the whole market itself?!? It would be awesome to do that wouldn’t it? The fact of the matter is: its not practical to do that. You would have to beat your competition in so many freakin’ areas that your resources would be stretched thin(like the US military). Somebody spending all of their time and resources in one niche would win(like Al Qaeda). End of story. That’s not to say it can’t be done, but you don’t see Google trying to take over Gucci’s business.
The most basic rules of choosing a viable niche to build a business around are:
This means that the niche isn’t a fad or would quickly fade out of existence. Niches in the financial and health markets are usually pretty evergreen. Some fat person will always want to loose weight.
Low Competition Niche:
The lower the competition the easier it will for you to take over the competition.
Commercial Value niche:
If nobody plans on buying anything how do you expect to make any money? A good example of this is the movie trailer niche. Lots of people want to watch movie trailers, but nobody will pay to do it.
Niche with Demand:
If nobody is interested in what you have to offer than you should go back to your 9-5 job. Seriously the average paying internet consumer does not care about the Popsicle stick house that your little son or daughter just made.
These are just some general rules. You know as well as I do, rules are meant to be broken, so if there is an area that you think you can succeed in, don’t hold back just because some pundit (like me) tells you that you can’t go after a highly competitive niche. You’ll just have to be highly competitive.
Niche definition #2
This brings me to the next definition of niche and the less used version of it: “a place or position that is suitable or appropriate for a person or thing: to find one’s niche in the business world.” This applies directly to you. If you can’t find a place or that is suitable for you or if you can find a position that is appropriate for you no matter what market segment you are in you will fail miserably.
While the previous definition of niche talks about external attributes about your customers and audience, this definition is personal and speaks to your internal attributes. What are your strengths? Weaknesses? Skills? Passions? These are questions that must be answered while choosing a niche. If you hate babies, I don’t think starting a baby picture business is a good niche (in terms of both definitions) for you. Personally I’ve struggled with this end of choosing a niche because my passions are either not commercially viable, or they are very vague and unassuming.
I’ve found that starting with figuring out what you want to devote the next 10 years of your life to is a good place to start. Try to narrow down what it is you want to do and focus on that. Pinpointing this will be your ticket to success. Whatever you decide, it doesn’t have to be a perfect match or even a good one. Nothing is etched in stone (except some ancient artifacts and cave man paintings).
Niche definition #3
The last definition of niche is used as an adjective. “Pertaining to or intended for a market niche; having specific appeal: niche advertising.”
This is similar to the first definition, but the idea we can get from this is that if we try to appeal to everybody we won’t be focusing on a niche. What ever business you have must have specific appeal, You can read more about creating specific appeal HERE*. For example a commercial cleaning company that appeals to anyone who needs cleaning can really be called niche. But a company that appeals to large department stores that need daily cleaning is way niche. They are very specific.
If you need help with this you must dream up who your perfect customer or audience is. Find more HERE*. Once you get you dream customer in mind than you’ll be able to find your niche both in your market and for yourself.
Here is a picture of the secret 4th definition of niche:
*Sometimes when I am writing an article I get an idea that needs more detail so I put the placeholder “HERE*” where I’ll put a link to an article that I have yet to write about the subject.