There are a lot of things to consider when you're in the process of starting a small business, but one of the most pressing questions concerns the potential market you want to target — and what your niche in said market is going to be.
Over the weekend I spoke to a friend of mine who's in the process of starting her own small business — she knows she wants to sell clothing in an online store and has already started looking into everything from marketing to production, but she wants to find her niche in the online shopping world before she goes any further. It's that little hook that makes your business stand out in an oversaturated market and allow it to thrive regardless of competition.
When thinking about your own niche, here are three points to consider:
The biggest thing to consider when finding your niche is your own passion — if you design your business around what you want, then you already have some insight into the market. Owning your own business also takes a great deal of time, energy and thought, and if you're not wholly invested in it then it can become more of a chore than working for someone else's company would be. Pick something you love first, and then figure out how to make money from that.
The second consideration that has to be weighed is your skill level — if you can't figure out how to use an iPhone then app development probably isn't for you, and if you come from a programming background then you may not want to dabble extensively in something that takes a lot of design work. While you can always hire people to make up for your own weaknesses, you're going to be in for a rough time if you don't have a basic grounding in what you're trying to create.
There's a delicate balance between identifying a demand that has not yet been filled by any product, and finding a section of the market that already has proven sales. This is the part of the process that takes the most research — look at existing businesses and products, find out what people are willing to buy, how much they're paying for it and, if you can, check out customer feedback to figure out what they want to buy.
Sometimes demand isn't even based solely on the product itself, however. A number of niches exist for different industries — in the beauty industry for example, Australian-made clothing or makeup that's free of animal products can have an important ethical appeal to many consumers who go out of their way to find such products.
It helps to keep written notes of all these points in the process so you can compare what you've come up with and ultimately formulate a business plan from there. Of course, you'll still have a long way to go — from coming up with a business name to designing and marketing your products — but a solid grounding will get you and your business off on the right foot.