It’s true. Creating a startup business begins with a vision—an idea that what you have, a product or service, is something that your target consumers need. However, as you study your target market with the help of an effective business strategy consultant, you will find out that you can make your offers more specific and outstanding. With this, you will start to understand why you need to establish your niche.
What is a Niche?
Your business niche is a focused area of the market that you can serve specifically. Finding your niche means that you know your identity as a business, and that you also understand the needs of your chosen market segment.
Let’s take the food business as an example. You may have noticed that it has a lot of niche or segments.
Of course, all people consume food. But, each individual has specific food preferences, even cravings. That is why, there are fine dining restaurants, casual dining, pop-up restos, cafes, and fast food restaurants, to name a few.
Each of these kinds of restaurants offer unique food or beverage choices that make them stand out from others. It could be how their food tastes (spiciest, creamiest, sweetest); how the meal is prepared; the ingredients (all-meat, vegetarian, vegan); the themes in reference to culture or lifestyle; even how the food is presented or served, and more.
Without a specialty or a signature dish or drink, a restaurant or diner can be easily forgotten.
So, as you create your business roadmap, you will be challenged to think about how your product or service can be developed into a unique solution for your consumers’ specific needs (or wants).
Is it good to be focused?
Of course! Here are the top 5 reasons why you need to establish your niche.
1. A Niche Will Help Hone Your Skills Towards Expertise
Once you have decided on your niche, you can focus your efforts into improving your skills to offer the best product and service. When your skillset is well-defined and you keep enhancing it, you are on the road to being an expert.
People honor expertise. They will have more trust and confidence in you and your business because they believe that you are very good at what you are doing.
The more specific your goals are in your business roadmap, the less time you will spend wondering what to do or invest on next. You can hone your skills into perfection, and use your tools to develop exceptional services. Mediocrity can make you forgettable in the competitive market.
For example, you are in the IT professional services industry. It is a very broad market category as most, if not all companies, are relying on technology to do business. How do you find your niche, then?
You can avail the services of a good IT consultancy business to guide you through developing your business roadmap and establish your niche. You are guaranteed with tools and resources that you can use to improve your skills, and find and attract potential clients based on your expertise.
2. A Niche Reduces Competition
You need to establish your niche if you want to stand out from the multitude of competition out there, especially from those who only offer generic products or solutions. By establishing a niche, the market will know that you are different from those offering general services. You can establish a unique identity. This automatically reduces competition, and will help you focus on providing quality products and services.
However, do not be afraid of competition. It is healthy for your business growth. You can choose a niche, and still have strong competition with other brands. Fret not. Focus on your goals, seek help from experts in the industry, and keep growing.
3. It Helps Develop Loyalty Among Customers
A niche helps you focus on a specific market segment—their identity and preferences. If you are a business owner who understands why you need to establish your niche, you will take time to know your target clients, your competitors, and potential changes in the market. So, research is key.
Once you get to know your target clients’ preferences, you can then tailor-fit your tools, services, and products. With this, you can offer them a great experience with your product.
This is why small businesses with a niche can foster a strong bond with their customers, hence creating a loyal customer base.
The best thing about loyal customers? They will buy your product, and help promote your brand. Your business strategy consultant would agree that this is a good thing.
Word-of-mouth marketing is still one of the most effective strategies, especially now that we are in the social media age. If you address your clients’ needs exceptionally (by being an expert because of your niche), the good news will spread. Your loyal customers will post good reviews or feedback about your product and your business.
For example, when you experience the service of the best IT consultancy business, you cannot help but thank it publicly or recommending it to friends or family. It’s definitely a win-win.
4. A Niche Lessens Marketing Costs
Another reason why you need to establish your niche is that you can cut marketing costs. According to experts, you will be able to run a cost-effective marketing campaign by having targeted ads and promotional strategies based on your segment’s habits and preferences. This is called niche marketing or focused marketing.
Also, as mentioned, a business with a niche has a loyal customer base. These loyal clients help promote your brand by sharing their experience within their circle of influence.
If you are able to lessen your costs, save time, and focus your efforts, it is more likely that you will gain more profit with your niche business idea.
5. It Creates Opportunities For Growth
Having a niche does not guarantee instant success for your business. As a business owner, you should be ready for wins and losses.
As mentioned earlier, research is key. A niche should not limit you. Instead, it should expose you to a variety of opportunities to grow your brand.
On your business roadmap, there should be clearly defined goals and methods on how to achieve these. Also, you need to identify and include the potential competition and market changes. With this awareness, you can keep your brand significant while exploring new business ideas if you want to expand your scope. An experienced business strategy consultant can help you through this process.
Feedback is also essential. As mentioned, having a loyal customer base is one reason why you need to establish your niche. Listen to their feedback, even and especially to the not-so-good reviews. Your loyal customers will be honest with you and help you grow.
Tips in Choosing Your Niche
Now that we have laid out the reasons why you need to establish your niche, your next question might be “how to do it?”
Here are the tips from the experts:
- Determine your interest, skills, and passion.
- Determine the problems that these can solve.
- Determine the market of your niche.
- Determine if your chosen niche is profitable.
We have answered why you need to establish your niche. Now, you can start reflecting on your business ideas and goals. Ask industry experts how to test you’re your niche. Remember, there success is not achieved overnight. But, with the right mindset and guidance, you can definitely grow and sustain your brand.