From narrowing down to growing

When your business is just starting out, it can be tempting to appeal to as wide of an audience as possible. After all, reaching more people means gaining a larger pool of potential customers, right? 

However, this also means it’s easier for your business to get lost in an oversaturated market. Instead, it may be beneficial to consider focusing your efforts on a more specific demographic. In other words—finding your business’ niche.

What is a niche?

A niche refers to a specialized area of a general market that a business undertakes. Say your business sells footwear. This is a very general market with countless other businesses already occupying it. Now, say you narrow this category down to boots or, even better, safety boots for construction workers. You’ve now found a focused niche within the broader category of just footwear.      

What are the benefits?

By finding a niche for your business, you have more time to focus on your specific market. That allows you to become a specialist in your chosen field. This makes your brand more appealing than other, more general companies. You are now able to gain loyal customers who trust what you have to offer. 

In this way, your business also becomes more valuable to your customers. People are often willing to pay more for your services if they know yours are better than other companies. That said, you could make more as a specialist than you would as a general business. 

Having a niche also focuses your efforts. When marketing, for example, you know exactly who your audience is and what appeals to them. That means you won’t waste time or resources trying to appeal to as many people as possible. The marketing process becomes more organized when you don’t have the entire world as your target audience.  

Developing your niche 

Keep in mind, there are several ways to go about this. The process will also often vary from business to business. Here are some general tips to get you started:

  • Identify your general target audience. Start by figuring out the broader market you wish to enter. Then, begin looking for more specific communities within this demographic. 
  • Find the sweet spot. It is ideal to target a demographic general enough to have a good number of potential customers. But it should also be specific enough that it is underrepresented within its broader market. This way, there will be fewer competitors. 
  • Don’t go too niche. You still want your customer pool to be large enough to make a profit. Catering to a community that is too small with a product/service that needs to be purchased too often,  is risky. In fact, you risk exhausting your customer pool quickly even if those you serve are satisfied. 
  • Make sure your target audience is accessible to you. In other words, don’t waste your efforts by building your business around a community you are unable to connect with.  Namely, how would you reach out to people living remotely off the coast of Japan while living in downtown Toronto? This example may be simplistic, but it highlights the importance of being reasonable when selecting your target audience. 

Narrowing down your business with a niche can be intimidating. It can seem counterintuitive cutting off some potential customers in favour of others. However, developing a niche can also have many benefits and may even lead to greater income long term.

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