Scratch a Niche

Success Secrets

Talking to the masses is just what Andrea Keating, 44, did when she started Crews Control Corp. in 1988. While working for a talent agency that represented people in the arts, she asked her numerous industry contacts what they thought of her business idea--a company that would establish a network of video crews nationwide so Fortune 500 corporations could work with local crews.

"This was one of the areas of production that seemed to be open and not served enough by other niche businesses," says Keating, whose Silver Spring, Maryland, company has $10 million in annual sales, 5,000 clients and 10 employees. "Producers were paying to find crews all over the country, and I saw that I could bring in the video crews myself and offer corporate clients one place to go for their video-production needs at a better price."

She also sought advice and marketed within her industry by becoming president of her local chapter of the International Television Association. The business has been so successful that she has created a second niche business as an outgrowth of the first. Reelcities, still in the startup phase, provides stock footage for corporate video needs and serves the same client base as Crews Control.

"If you start a niche business, you may find that you can add to that niche or even grow a second business," Keating says. "That is part of the beauty of having such a defined market."

While you don't have to be a customer of your own product or service to know if it will sell, it can help if you have that firsthand experience as well as some initial contacts--as in the case of Keating, who had hired video crews in the past.

Wiener agrees that personal experience is helpful. "I would have a hard time designing interiors for the geriatric market or those with handicaps," Wiener says. "But from living with my husband and two sons--who are all slobs--I know how important a family-friendly home is to my own sanity. I can translate that knowledge to my clients, who have also endured fingerprints on the wallpaper and stains on the furniture."

If you haven't been an actual customer in the past, consider putting yourself in that role as part of your market research, Davidson advises. If you're going to sell products for birds, for instance, visit pet stores and observe what customers are buying and what they are paying. Ask veterinarians for their suggestions as well.

Naturally, having some past job experience in your chosen niche will also help you determine if you have a viable business concept. "If you want to open a clothing store just for plus-size women, it certainly will help if you have worked in a clothing store or the garment industry, with at least a year of experience behind you," Neese says.

Industry experience benefited Nathan McKelvey, president and CEO of CharterAuction.com, a 6-year-old Quincy, Massachusetts, niche business that locates available premium jets for clients through an auction format. McKelvey, a pilot since 1996, managed two private jets for local operators for almost three years before starting his company. He knew what customers were looking for. He also did research on the scope of the private jet industry in general and on the financial performance and reputation of his two main competitors at the time.

"This was an approximately $2 billion industry that was underserved," says McKelvey, 35, whose company has 25 employees and $14.7 million in sales for 2004.

Sometimes, a niche business starts out offering one product or service, then moves into an entirely different niche. When he started his business in 1990, Tim Mossberg, owner of TLM Industries Inc. in Fort Walton Beach, Florida, distributed screen-printed cups and mugs for convenience stores. Each mug had the logo of the particular convenience store on it. But his clients were telling him that what they needed even more was a supplier they could turn to for durable staff uniforms that would hold up through many washings. Also, many of Mossberg's clients employed plus-size individuals and had a hard time finding appropriate uniforms, so they just told their staffers to wear their own clothing. Mossberg, 42, personally went to store managers in various states--including Alabama, Georgia, North Carolina, South Carolina and Tennessee--to get input firsthand about their employees' uniform needs. A light bulb went off for him--and the mug niche was replaced by the uniform niche.

"You have to listen to your customers very closely and research on your own if what they are asking for is viable when you create a niche company," says Mossberg, whose $2 million business employs 20.

Today, Mossberg services more than 200 convenience-store chains nationwide, manufacturing and distributing all their employee uniforms. He knows this niche business can keep growing, since the convenience-store market has a total of about 2,500 chains. Already, Mossberg is branching out his specialty even further: He has recently started supplying uniforms to supermarkets and fast-food companies.

"The beauty of a niche business is the ability to capitalize on your area of expertise and add new customers who will still buy what you are selling," Mossberg says. "I've found a niche that works, and there are many possibilities for further growth. It's a great feeling."

Finding Your Niche

Brainstorming niche business ideas is easier than you may think, says Ira Davidson, director of the Small Business Development Center at Pace University in New York City. With a women's clothing store, for example, you can create separate and distinct niche stores that sell one type of women's attire. Related niche stores from this single concept would include:

  1. Bridal shop
  2. Business suits, handbags and accessories
  3. Casual clothing
  4. Clothes for girls and teenagers
  5. Designer clothing store (all items are one designer's name, such as Gucci)
  6. Discount clothes-every item under $10
  7. Evening and formalwear
  8. Maternity wear
  9. Petite-size clothing
  10. Plus-size clothing

Resources

Learn more about your niche from:


Laura Koss-Feder is a freelance business and features writer in Oceanside, New York, who has written for Business Week, The New York Times and Time.

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This article was originally published in the August 2005 print edition of Entrepreneur with the headline: Scratch a Niche.

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