5 Steps to Building a Successful Niche Business
From aquatic sporting goods for dogs to Michelle Obama-inspired fashion websites, niche products and services have the potential to generate big bucks if they capture the hearts, minds and wallets of a dedicated consumer base. Unlike conglomerates that target the masses, niche businesses cater to highly defined markets that are often over-looked, underserved or disenfranchised by larger competitors. With an abundance of available outlets, resources and online platforms, identifying and reaching a target audience has never been easier for small business owners. Are you ready to become the big fish in a small pond? Is your passion unique enough to turn a profit? Here are 5 steps to make your niche business a hit.
Create a Simple Service
A simple service is a singular offering that focuses on the needs of a narrowly defined customer base. Whether you yearn to be the premier manufacturer of dog lingerie or the industry-leading producer of edible Christmas tree ornaments, make sure you can easily answer these questions: Who needs your service? What's uniquely useful about that service? What makes your service better than your competition? Fine-tune your brand name, website, and marketing tactics to focus solely on selling your unique specialization and expertise. Remember: Focus. Focus. Focus.
Real World Example: In 2004, my partners and I launched a typical "do everything" video production company. After years of under-performing, I transformed the company into a single product specialist. While the vast majority of video production companies still tout their large service rosters, Sizzle it! has carved out a niche as the only company that specializes in sizzle reels--stylized 3-to-5 minute product videos commonly used by PR and marketing professionals. Result; Sizzle It! has emerged as a go-to company for sizzle reels and benefits from top keyword visibility on all major search engines.
Craft Your Niche Marketplace
The key to your simple service's success is to capitalize on a niche marketplace that you feel is being underserved. A niche marketplace is a small, specialized market segment within a larger, viable commercial industry. When identifying the niche marketplace you wish to enter, consider the following questions: Who lives in your marketplace? Why have they been underserved? How can you better serve them? How can you unite them? In short, why is your simple service the solution to their problem? Compile the data you collect to produce a detailed profile of your target customer. Using the data from your customer profile, join or create online groups, feeds and networks that are relevant to your simple service. Connect with your niche marketplace's key decision makers, enthusiasts, and influencers using social networks such as Facebook , Ning , Twitter and MeetUp .
Real World Example: There are thousands of T-shirt stores both online and offline, but few have truly established or engaged a niche marketplace. Threadless is a user-generated T-Shirt and apparel website that determines its product line based on the results of online design competitions. Winning artists receive recognition, cash prizes and their designs sold on Threadless gear. The company has united a niche marketplace of trendsetting hipsters, artists and design aficionados seeking wearable art. Result: the company sells over 1 million shirts per year.
Become the Niche's Leading Authority
As the creator of your simple service, you offer your niche marketplace valuable insight and advice. However, simply proclaiming you are an expert will get you nowhere. Shamelessly self-promoting your service will also lead to a dead end. Authenticity builds credibility. Relate to your constituents. Tell the story behind the founding of your simple service. What problems did you encounter? How did you solve them? Once you've perfected your message, disseminate relevant content through "expert real estate" such as blogs, forums, press releases, speaking engagements, newsletters, web videos and podcasts. Remember, no one knows your marketplace better than you.
Real World Example: Joy Berry is a best-selling author of children's books and, according to Scholastic , the inventor of self-help books for kids. For over 30 years, Joy's advice and media products have focused on helping parents to raise responsible kids by teaching them the living skills their children need to know at various developmental stages. Result: Joy Berry has connected to a worldwide audience and sold an astonishing 85 million books.
Be Specific, Distinctive and Relevant
Seize every opportunity to point out why your service is a better fit for your niche marketplace than competitive offerings. Take a good look at all of the components that make up your simple service, from concept to manufacturing and distribution. What makes you stand out? What do you offer that competitors don't? Why are you more relevant to your niche marketplace? Use the answers to these questions as ammunition against the competition. While a competitor may tout their "multi-service one-stop-shop", your niche marketplace prefers a specialist. Your competitor may be a low-cost leader, but your niche marketplace appreciates high quality craftsmanship.
Real World Example: While major corporations have dominated the print yearbook industry for decades, Yearbook Innovation , a school memory product provider in Staten Island, N.Y., believed cash-strapped schools were ready for a change. Yearbook Innovation differentiated its yearbook products by offering more hands-on customer service and production services than competitors, eliminating penalties and late fees, and slashing 20 percent--off a school's previous yearbook contract--all without a loss in product quality. Result: the company has begun to take away market share from entrenched competitors in their local area.
Copy, Paste, and Repeat
Keep hammering your message home. Expand on your successes. Find innovative ways to grow your niche marketplace. Locate new avenues, channels and "expert real estate" to showcase your simple service, its competitive advantages and your expertise. You know what's worked; now increase your exposure. Copy, paste, and repeat.
Real World Example: Google began as a simple service that could only dream of being in the same league as companies such as Yahoo and Microsoft. Today, Google has become the undisputed online advertising titan by consistently developing, acquiring and partnering with high trafficked online destinations that expand its AdWords program. Result: Google generates billions of dollars per year in revenue.
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