Creating a good niche involves following this seven-stepprocess:
1. Make a wish list. With whom do you want to dobusiness? Be as specific as you can: Identify the geographicalrange and the types of businesses or customers you want yourbusiness to target. If you don’t know whom you want to do businesswith, you can’t make contact.
These days, the trend is toward smaller niches (Targetingteenagers isn’t specific enough; targeting male, African-Americanteenagers with family incomes of $40,000 and up is. Aiming atcompanies that sell software is too broad; aiming at NorthernCalifornia-based companies that provide internet software sales andtraining and have sales of $15 million or more is a bettergoal.
2. Focus. Clarify what you want to sell, rememberingthis: a) You can’t be all things to all people and b) “smaller isbigger.” Your niche is not the same as the field in which you work.For example, a retail clothing business is not a niche but a field.A more specific niche may be “maternity clothes for executivewomen.”
To begin this focusing process, use these techniques to helpyou:
- Make a list of things you do best and the skills implicit ineach of them.
- List your achievements.
- Identify the most important lessons you have learned inlife.
- Look for patterns that reveal your style or approach toresolving problems.
Your niche should arise naturally from your interests andexperience. For example, if you spent 10 years working in aconsulting firm, but also spent 10 years working for a small,family-owned business, you may decide to start a consultingbusiness that specializes in small, family-owned companies.
3. Describe the customer’s worldview. When you look atthe world from your prospective customers’ perspective, you canidentify their needs or wants. The best way to do this is to talkto prospective customers and identify their main concerns.
4. Synthesize. At this stage, your niche should begin totake shape as your ideas and the client’s needs and wants coalesceto create something new. A good niche has five qualities:
- It takes you where you want to go–in other words, it conformsto your long-term vision.
- Somebody else wants it–namely, customers.
- It’s carefully planned.
- It’s one-of-a-kind, the “only game in town.”
- It evolves, allowing you to develop different profit centersand still retain the core business, thus ensuring long-termsuccess.
5. Evaluate. Now it’s time to evaluate your proposedproduct or service against the five criteria in Step 4. Perhapsyou’ll find that the niche you had in mind requires more businesstravel than you’re ready for. That means it doesn’t fulfill one ofthe above criteria–it won’t take you where you want to go. Soscrap it, and move on to the next idea.
6. Test. Once you have a match between niche and product,test-market it. This can be done by offering samples, such as afree mini-seminar or a sample copy of your newsletter.
7. Go for it! It’s time to implement your idea. For manyentrepreneurs, this is the most difficult stage. But fear not: Ifyou did your homework, entering the market will be a calculatedrisk, not just a gamble.
Once your niche is established and well received by your market,you may be tempted to rest on your laurels. Not a good idea. Askyourself the following questions when you think you have found yourniche–and ask them again every six months or so to make sure yourniche is still on target:
- Who are your target clients?
- Who aren’t your target clients?
- Do you refuse certain kinds of business if it falls outsideyour niche?
- What do clients think you stand for?
- Is your niche in a constant state of evolution?
- Does your niche offer what prospective customers want?
- Do you have a plan and delivery system that effectively conveysthe need for your niche to the right market?
- Can you confidently predict the life cycle of your niche?
- How can your niche be expanded into a variety of products orservices that act as profit centers?
- Do you have a sense of passion and focused energy with respectto your niche?
- Does your niche feel comfortable and natural?
- How will pursuing your niche contribute to achieving the goalsyou have set for your business?
