When we think of something niche our minds are initially drawn to the obscure and the kitsch. But a niche market doesn’t necessarily need to be something odd. Just specific. Finding and carving out a place in a niche market is also, for many small businesses, a foundational part of their identity. It’s always better to be a big fish in a small pond.
What is a niche market?
No business can hope to be all things to all people, and if they try they will invariably fail. That’s why most businesses instead opt to specialise in the smaller parts of a larger market. For example, the market for health and beauty products is vast but the market for handmade, bespoke bath bombs is significantly more focused. More importantly, it’s a market even a small business could feasibly work their way to the top of with the right positioning.
Finding your niche market
The more narrow the target audience, the more niche a market will be. Not all niche markets will be profitable and others might not even be established yet, perhaps because others have already tried to build that niche and have found it unprofitable. The key is in asking yourself what it is you can offer, what it is a specific market wants and finding the perfect middle ground.
The niche doesn’t just have to be defined by the product, service or audience either. Think about the location of the business, the price and quality (budget or luxury), and even the values of the business. Sustainability, for example, is a hot topic right now and could be used as a key differentiator.
Niche market benefits
Being a jack of all trades is rarely looked on as being a positive thing. That’s why businesses are constantly striving to identify USPs that put them within a niche. Being part of a niche market has numerous benefits, including:
Competition – The more specialist a business is, the less direct competition it has to worry about. In an oversaturated online market, this is perhaps the most important benefit of a niche market.
Focus – If you’re focused on delivering a product or service to a more specific audience, you can put all of your focus and expertise into that one area. This will help you gain a deeper understanding of your audience and cultivate a more profound and hopefully lasting relationship with them.
SEO – In search engine optimisation, fighting for keywords is common practice. However, if you’re operating within a niche, you’ll be focusing on less-generic keywords and should therefore be better placed to rank higher on all popular search engines.
Establishing your niche market
The most important aspect of establishing a niche market is always research. You must research not only competitors within your niche but also those in other niche markets, even those that might have nothing to do with your business. How are these businesses communicating with their audience and what are they missing? Is there anything they are not offering?
Before launch, you need to do a lot of testing and research to ensure your niche offering is suitable for your chosen market. You might also want to research the flexibility of the market and whether or not there is the potential for expansion into other niches down the line.
Once you have launched, reach out to the audience (your ideal customers) who fall within your niche using a targeted marketing campaign. This can be done relatively easily through social media or email marketing. This first stage of the business should also be seen as a learning period. Gather feedback from your initial customers and use that feedback to help you better understand your niche and develop further into it.
We can help
If you’re interested in learning more about niche markets and how your niche business can get off the ground quickly and safely then get in touch with our financial experts. Find out how GOCardless can help you with ad hoc payments or recurring payments.