Finding the right niche for a business

When a company finds its niche, it finds its people. No matter what area of business a company operates in, standing out from the competition is vital to its ongoing success. It is the specific set of factors that set a business apart that constitutes its niche. Here are some strategies for selecting and honing a niche to build a thriving business.

What is a business niche?

A business niche is a focused or specialized area of a wider market that an organization can serve more specifically. In essence, a business’s niche is what makes it different from its competitors and allows it to excel in a specific sector. This is usually made possible by identifying a gap in the current market or finding a customer need or requirement that is currently not being met. For example, a mobile pet grooming salon would use a fully equipped vehicle to travel to the customer’s preferred destination, saving them the time and effort of having to take their pet to a fixed location. The end service provided is the same, but the mobile aspect gives the business a unique niche and an advantage over competitors.

Finding a niche in business is important as it allows the business to create a steady revenue stream and establish a loyal customer base who come back time and again for a specific reason.

A niche will help the business to be more focused and less broad in scope. It can also help to establish a unique identity that can signal the direction for further development and help with branding and marketing decisions.

Examples of niche business ideas

Niche businesses tend to find an area of an existing market that has not been serviced and adapt their offerings to meet customer needs. Examples of niche business ideas include:

• Eco-friendly cleaning services
• Online tutoring
• Virtual event planning
• Drone videographer
• Office interior designer

These are just a few examples of potentially profitable niches, where businesses have taken an existing market and diversified slightly to incorporate new ideas and technology. Niche markets can exist just outside the framework of what the business currently offers or be in a related but as yet untapped market.

How to find a business niche

Once business owners understand how a niche market is different, it’s time to start creating their own unique approach to finding new business. The following steps on how to find a business niche are a great place to start:

• Identifying personal passions and expertise: It is always a good idea to start from a place of knowledge and work outwards to identify how this can be applied in new and innovative ways.
• Market research and assessing market demand: An essential step is to establish whether a market exists for the business’ unique ideas or innovation. Conduct as much market research as possible by asking existing customers and carrying out social media polls.
• Pinpointing target audience: Think about the company’s ideal customer and what kind of goods and services they are looking for. What are their specific needs and how can the business meet them? Are there customers that are easily accessible or identifiable or does the company want to tap into an underserved market?
• Analyzing competitors within a chosen niche: How are the goods and services offered going to differ from those of competitors? What are the barriers that prevent someone else from doing exactly what the business does, in the same area?
• Creating a business plan: Create a formal plan for how the business will target its niche. This will include what goods or services it will offer, costs, branding strategy, and more. Such a plan can help keep business efforts on track.
• Testing the niche: Create a blog or landing page offering a product or service and monitor the response closely. Is the offering gaining more traction in the market? If people are interested or making purchases, then the business may have found its niche.
• Refining the niche: The process has no definitive end. The business should always seek to refine its niche market, going through the above processes on a regular basis to try and increase customer loyalty and interest.

Why is it important to find a niche

Knowing how to find a niche can help businesses succeed in numerous areas. Finding the right unique position helps build credibility with customers and dominate in the chosen corner of the market. Find out what the business can do differently from its peers, and the road ahead starts to look a lot clearer. Finding a niche will help to:

• Build brand loyalty, connecting with customers who know the business can meet their needs
• Reduce marketing costs by targeting specific groups who are more likely to respond
• Increase expertise in the chosen field and establish the business as a leader in the eyes of the customer base
• Increase profits by narrowing down the customer base but being able to sell to customers on a more frequent basis

A well-defined niche can give the business a competitive advantage, but it should stick to just one. It is possible to explore multiple niche markets if the business can specialize in more than one area. However, it must be very careful not to spread itself too thin or confuse the messaging between different niches.

Most importantly, it is essential to stay adaptable within a niche market. Business leaders must accept that competition will inevitably appear and challenge their niche, particularly if it is successful. That’s why a niche marketing strategy should be a constantly evolving project, always looking for new ways to connect with customers and solve their problems in new ways.

Finding a niche

Understanding the specific needs of its niche allows the business to speak more directly to its customers and give them more of what they want. It helps to build connections and establish the brand as an authority. But niche markets ebb and flow and business leaders need to work hard to stay on top of what their customers are looking for.

Whether branching out to give existing customers more of what they want or tapping into an underserved market from scratch, PayPal has the tools to help you grow your business.