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creating a niche, startup niche

Creating a Niche – Why It’s Important, and How to Get Started

Creating a niche is one of the most important things you can do as a new business, or any business that’s looking to grow its sales & reputation in the future.

When you know your niche, it makes it much easier to bring in new clients, and to convert your prospective clients into new customers.

There are two main reasons why businesses aren’t as aggressive as they need to be when creating their niche:

1. The fear of missing out – on “other” customers, and therefore sales / new business
2. They don’t know how to do it or how to get started

This article is designed to explain firstly, why it’s so important, and the second half is here to hopefully make that task a little less daunting, and actually quite rewarding.

Why It’s So Important to find a Niche, and Getting Over the Fear of Missing Out

When you’re starting out, it’s very tempting to think “Well my service actually works for everyone” – this may be the case, but it will not help you to sell it, or probably enjoy your work as much as you could do.
The more diverse your range of clients, products or services, the more competition you’re going to have, and therefore the more effort/money you’re going to have to spend on marketing your business.

Everyone is different, and everyone is good at different things, so why try to be like your competitors?
It’s much more efficient, and much more enjoyable to be able to work with the clients you want, and do the work you want to do, than it is trying to beat somebody else at their own game.

“Being niche, doesn’t mean small”

There are plenty of global companies that have started out with a very specific niche, and then once they’re profitable, they expand into their different areas. Some may have had this plan all along, others will just have expanded into new areas when they saw the opportunity.

Facebook started as a network for Ivy League schools only. Even when it came over to the UK it only started with five universities, and you had to have an email address associated to that university to join.

Amazon started with books. Now they sell everything you can think of – they’ve stated themselves that they want to be able to sell every (legal) product in the world.

These two examples are two of the biggest in the world, but yet they both started with very small and specific niches.

If they can settle for a niche, surely you can too right?

Before we move onto the How, let’s look at a few examples of Why it’s so important to find your niche:

  • Marketing/Branding

    • The more specific your niche, the more specific your marketing products and campaigns will be – you’re making each brochure more cost-effective because it’s hitting the right people, at the right time, with the right pain points
  • Elevator Pitch:
    • Who knows who you may bump into at networking events or on your next holiday – the more succinct and catchy your pitch is, the more likely you’ll get something from it in the future
  • Prospects:
    • When you know & understand your niche, so will your prospects and future customers, and they will start coming to you, not you always having to go for them.
  • Turning Prospects into Customers & Referrals:
    • The more your prospects understand what you do before you meet them, the more chance of your sales meeting being a success – they already know you & what you’re all about – they just want to meet to finalise a few details
    • This is also true for someone who is recommended your business, they already know what you do and why you’re good at it – so it’s easy for them to get in touch 
  • Competition
    • The more specific your niche, the less competition you’ll have
  • Charge a Premium
    • When you have a specific niche, most of the time you’ll be able to increase your prices too, if you’re the only one doing what they want, then they’ll be willing to pay that little extra
  • Passion
    • The more aligned your niche is to you & your values, the more passionate you’ll be when expressing it, and conversely, the more passionate you’ll appear to your customers
  • Strategic Alliances
    • When you have your own niche, there’s likely to be others that do something close to what you do, but they have their own specialism – working with these individuals and setting up strategic partnerships will help more referrals come your way

How to Start Creating A Niche

Now that we’re all agreed on how important it is to create your niche, let’s get started on the second point shall we, how to begin!

Simon Sinek states in his book; Start With Why, that people do not buy your products/service, and companies are not necessarily successful because of their product/service.

“People buy into companies that have a strong Why”

Sinek uses his Golden Circle analogy to explain it best, with the centre being the Why you do something, the next circle being the How you do it, and then the outer-most circle being the What you do
With this in mind, the closer you can get to your Why – the more your customers will buy into you, and your niche.

When you figure this out, your work becomes more enjoyable, you’re doing more of it, and therefore you’ll be the best at it.
If you love doing what you do, then you’re going to enjoy practising and learning more & more about it every day of the week – if your competitor doesn’t have the same interest or drive in that particular niche, then they won’t be willing to put the same effort in as you, because to you, it’s not even effort.

There are two main factors when you start to think about creating a niche:

  1. What do I enjoy doing the most?
  2. Is this a genuine business opportunity?

What Do You Enjoy the Most?

This aspect is the brainstorming phase of the exercise and allows you to be truly creative.
Start by thinking what specific aspects of your role you enjoy doing the most

  • What type of work do you enjoy doing the most?
  • What typifies enjoyment for you:
    • Income from the work
    • Types of clients
    • Location of the work
    • Referrals/testimonials you may be able to get off the back of it
  • When in your career have you felt happiest?
  • What types of businesses do you enjoy working with?
  • What types of individuals do you like working with?
  • What problems do you enjoy helping them with?
  • What type of work do you find yourself being recommended for?

What type of work would you do for free because you love doing it so much?

Is This A Genuine Business Opportunity?

The next stage is then to decide if this is a genuine way for you to make a living, and to ensure that there is enough work out there to keep you going

  • Will this type of work bring you enough money?
  • What does the competition look like?
    • How many are there?
    • Have you gone far enough with your niche to set yourself apart?
  • How much demand is there for this product or service?
    • Have you gone too far with your niche and created a solution that’s not required at this level of granularity?
  • What pain point(s) are you solving, and are people willing to pay to solve it? Is it enough of a pain point?
  • Is this a growing market sector or a shrinking market?
  • Is there a gap for you to enter this market?
  • How much do your competitors in this market have to spend to bring in their customers – both
  • initially, and now that they’ve been up & running for some time?
Get started on creating your niche…

Creating a niche can seem daunting, but once you get going and start creating your own niche, it’s actually really exciting, and don’t be afraid to be too specific!

Creating a whole new area for you to work in and market to is the quickest way for you to succeed – just make sure to do your due diligence on the sector, and make sure that there’s still a market there for you to make money.