“If everybody’s doing it one way, there’s a good chance you can find your niche by going in exactly the opposite direction” – Sam Walton
Whether you’re starting a new company or working out which direction to take your startup next, it’s crucial that you know exactly what it is that you do better than anyone else.
In this article, we’ll guide you through 7 steps that will help you figure out a winning profitable niche market strategy for your business.
Read on to learn more about:
- Finding your expertise sweet spot
- Identifying potential markets, customers and pain points
- Focusing on problems you’re uniquely equipped to solve
- Standing out against the competition
Let’s get started.
1. Start with the Sweet Spot Venn Diagram
Here’s a really simple way to start brainstorming on a profitable niche market strategy ideas: draw a Venn diagram with four circles. Label them:
- …I’m (or your company is) Really Good At”
- …I love doing”
- …the World Needs”
- …Pays Well”
Now start filling in the Venn diagram with your skills and expertise. Those that sit right at the heart of the overlapping circles of the diagram – in other words, the ones that fit into all four categories – represent your strongest, most compelling unique selling points. Therefore, use these as the basis for defining your niche.
2. Identify Potential Customers
Now that you have a clearer idea of what makes up your key assets, start listing the types of people, companies or organizations that would derive the most value from it. The more specific you can be, the better.
3. Research their Major Pain Points
From here, you need to really get into the mindsets of these customers. What are they trying to achieve? What challenges, frustrations and annoyances get in their way?
4. Pick Problems You Can Solve
Next, cross-reference the pain points you’ve identified with the skills and attributes you highlighted before. Which ones seem like a possible match? How could you use your expertise to make these customers’ lives easier or better?
5. Take a Good Hard Look at the Competition
Before you get wedded to a particular idea, conduct a thorough audit of all the other companies you find that target the same problem areas or types of customer. How do they approach the problem? How are you different from them? What problems can you see with their approach? Have any of them already tried your exact idea? What could you do differently?
6. Figure Out Solutions and Approaches that Only YOU Could Do
Now you can certainly tighten up your ideas and really define your niche. Looking back at the marketable specialisms you identified earlier, ask yourself ‘why am I the right person to solve this problem? What perspective would I bring to the challenge or the industry that no one else could?’
The key is to work with your strengths and develop a business idea that draws on these heavily, rather than trying to squash yourself into the mould of a company that already exists out there.
7. Work Out How to Make it Profitable
A great idea isn’t the same thing as a great business idea. You still need to work out how you’d make enough money from it to succeed. So, think carefully about your target market. Even if they love the idea, would they have the budget to invest in it? What would your payment model be like?
Do a trial run with a small test version of your product or service before you scale up. Check out what messaging works, whether you get an interest from the kind of customers you expected and so on – and whether you need to adapt your niche market strategy. Keep working at it until you get it right.