With consumers showing a growing appetite for specialised services and products, there could not be a better time than now to start a niche business. Thanks to the rise of the Internet, it’s easier than ever for you to build a niche business with a national or even international reach.
In today’s changing economy, a small business will be viewed with the same regard and trust, traditionally reserved for global corporations — all made possible by niche markets. There are even opportunities for entrepreneurs to create new niche markets with innovative products and services.
This is great news if you have an idea for niche product or service, but thought that the market was too small for it to be viable. Carving out a niche can be extremely profitable since you’ll face less competition than in more mainstream markets, and will be able to reduce costs through focused marketing and product development.
Before we go much further, let’s define what we mean by a ‘niche business’ – we are talking about a business that targets a highly focused and targetable portion of the market. This could mean selling a specialised product or service (for example, banting cooking ingredients) or honing in on a particular audience (hardcore PC gamers or travel companies).
Entrepreneurship, at its core, still means taking risks
Your niche business might be unusual, but just like any other startup, it can either succeed or fail. Here are some ideas how you can get on the right track from the start.
1. What’s your why?
Before starting a niche business, you’re going to have to answer several questions that begin with the word “why.” Two of the biggest ones will centre around your specialisation and yourself.
2. Why you?
What is it about you that makes you a qualified expert? Do you have existing experience working in this field? Have you created blog posts, vlogs, podcasts or other published works that position you as an authority? Do you fiercely believe in this business? Are you passionate about it and willing to work hard? Can you keep innovating and growing?
3. Why this specific niche?
Choosing a niche market over a broader market means tapping into a loyal fan base. Look at supermarkets versus organic food stores. The former are big chains that compete by offering low prices and taking up space in busy shopping malls; the latter develop lifelong fans by offering fresh, premium products that people will go out of their way to purchase.
No matter which niche you enter into, it should be one where you understand and value its existing audience. Regardless of niche, your “why” should never be answered with “I just want to make money.”
How are your products or services different from the pack?
It’s not enough to stand out on a macro level in your industry. When starting a niche business, you’ll need to make waves on a micro level, too. You might want to open up a craft beer business, but you’ll quickly discover that other microbrewers exist. They will be doing a lot of the same things as you – how can you be different?
Having trouble defining your specialty? Keep it simple. Revisit your business plan, where you evaluated your products and services from an objective standpoint. All the details about what your business is, what it does, and what makes its message unique, should be fleshed out in-depth there. This simplicity should also translate to your brand’s story.
Your story should be one that compels your audience and allows them to understand what makes your company original and how your offerings will meet their needs. Want to differentiate even further? Look to anticipate the needs of your audience before they realise they have them.
What is your future target market?
Don’t be content to coast on your success. Think outside of your niche’s box. Sure, your first priority will be to understand and reach those individuals within it. Once you’ve accomplished that, what’s next? Or more aptly, who is next? Before starting a niche business, strategise about how you will reach individuals beyond your speciality.
How will you reach and engage with these people? Can you innovate your existing offerings to serve the needs of your customer base while enticing new shoppers? How will you fill gaps in the market and continue to stand out? Even as a niche-based business, you should still commit to the power of being different.
Ready to start a niche business?
Answer these questions before you start your niche business and you’ll find that you’re better off for it. Remember to go into it prepared and with a solid business plan, especially if you’re joining a crowded market.
Editor’s note: Once you’ve decided on an industry and a name for your niche business, check out how GoDaddy can help you get it off the ground. From domains and professional business email to website templates and website security tools, GoDaddy has your small business covered.