What is a niche business?

What is a Niche Business

A very good question

It sounds like a bit of a trendy marketing term doesn't it, but the theory is sound.

Knowing about this right at the beginning of your business idea journey, will pay out enormous dividends in the long run.

Understanding what is a niche business is, a whole lot more than just saying you work with only male or female, or mums or seniors or people who just eat fish.

It is more about the problem you solve, and the end result achieved from what you do to solve it

As always, I want to offer a simple way you can answer your own question, what is a niche business and why it’s a good idea to consider it as a concept to help to really narrow down your focus so you can start quickly and not become overwhelmed in the early days of your fledgling project.

You will then find sharing your particular message to the right people much easier instead of trying to compete for everyone and their dog, and then getting really annoyed and demoralised because the customers and clients you are seeking are resisting taking up your product or service.

To illustrate this point, let me direct you to a quote from a book called Switch by Chip and Dan Heath because I think they express it perfectly.

Their quote is

Resistance is created through lack of clarity

Resistance being people don't want to buy your product or your service because you haven't narrowed down and specifically answered the questions to all 4 parts of the formula, I am about to share with you.

Let me explain a bit more and you will see why this makes absolute sense.

The problem most people have with understanding what is a niche business is a fear based one and, in the reality, it is unfounded and unnecessary.

You think you will miss out on earnings, but the truth is the very opposite of this. The reality is you will create clarity in your bit of the market and your customers will be very clear if you can help them or not. There will be no ambiguity at all and no need for resistance from them.

If you narrow down your focus you will be talking to the right people, with the right message at the right time

You can then determine with precision, exactly

• Who your people are who will benefit from what you have to offer them?
• What their problems are?
• What will you do for them to solve their problems?
• What the outcome will be because of what you do for them?

What is a niche business - 4-step formula

Now let me break those 4 points down a bit more for you.

I want to explain to you how this little formula will help you hugely with focus right when you need it, at the beginning of your business idea formulation.

As an example, I am going to assume you want to have an events business.

So, using Part 1 of the Formula you are going to ask yourself

Who Is My Business For?

You have probably heard the saying along the lines of “A business for everyone is a business for no one” or something like that.

If you have your “I can help everyone” hat on, how do you know how you are going to market your service in the future? And to who?

You have to clearly articulate who your audience is going to be first.

I said as an example you were going to start an events business.

So the question is, are you going to organise events for everyone, or could you narrow it to say wedding events?

You could say... I want to be a wedding planner but for the formula to be effective, and this is the key bit to “what is a niche business” …

…it would make sense in the beginning to really niche down so you might choose to only work with gay couples or older couples or second weddings or perhaps civil weddings, rather than everyone’s wedding.

It makes it easier to find customers, and helps you know where to spend your marketing budget to best effect, which publications will you write articles for and what group of people to head towards with your expertise.

Now, I can already hear you saying…” but there won’t be enough money in just doing x, y or z"...

The field is too narrow.

I want to also do a, b and c as well or I will miss out and this is where the fear kicks in I spoke about earlier.

Fine, you can branch out later after you have made a success of your niche, but you are starting with this smaller group of people to focus your mind on the beginning stages of your business.

And as you harness your power of focus, it will bring clarity for you as you move forward.

Can you see now why I chose that quote

You can quickly get to the bottom of customers not buying by narrowing down your niche and just speak to them.

Now you know who you are working for, you can move on to Part 2 and ask yourself

What problems do my potential customers face?

You can now think about and articulate the potential problems of the people you have identified as who you want your business to serve.

Important to know because you want them to choose you over other any other wedding planning advisers.

It could be they find

• Organising a wedding is stressful
• There may be family difficulties
• There may be cultural problem
• There may be religious issues
• There may be financial constraints and so on

And you will be there, ready and waiting and showing you can be the answer to their prayers and provide exactly what they are looking for.

Which then leads to Part 3 of the formula

What will you do for your niche business customers?

Your potential customer is going to seek you out because of your specialism and ability to navigate their situation.

They want your expertise to get them to the end result they want.

Presumably, their perfect wedding.

Your role as their chosen wedding planner is to ask the right questions and then manage their budget to their expectations and they will also be looking to you for solutions to their problems, and they could range from difficult guests to managing family disputes on their big day.

Which then leads on to the final part of the equation which is

What is the main outcome as a result of what you do for them?

In this case, the outcome is you helped them to create the best wedding they could possibly have hoped for, and it will leave them and their guests with happy memories to last a lifetime, especially if you have given them tools to navigate difficult situations.

Can you see now, how, if right at the beginning you said

“I want an events business and I can help anyone who wants a party” you would have stood at the bottom of a mountain looking up and never saw past base camp.

Trying to be all things to all people is exhausting.

So don’t make it so hard for yourself.

Apply the formula and you will find starting your business will be less of a mountain climb and more of a hill walk.

I hope that answers your question of what is a niche business?

I have included a downloadable business niche worksheet here for you to print off and  use to help clarify your thoughts a bit more around those 4 important questions.