Niche Thyself!

Over and over again I see businesses that fail because they are chasing the huge market like a crack addict chases it's dealer. There is a strange lure for startups to look at a huge, billion dollar, wide markets and think to themselves "WOW if I only got 1% of that market I'd be rich" I'm going to go out on a limb and say that if you chase a wide market in todays market place you will be spending way more money than you need to to get to profitability as a start up. 

One of the keys to startup success, as far as growth is concerned, is a niche market.

Let's first talk about what I mean by niche. Dictionary.com's first definition is

"An ornamental recess in a wall or the like, usually semicircular in plan and arched, as for a statue or other decorative object." 

The third definition is:

"a distinct segment of a market."

The way to know if you have a niche market segment is if you can't POSSIBLY realistically narrow your offering any further. Lets say you have a new company that offers auto detailing. How do you niche that. Well you can start with location for a service like that.

"We are a auto detailing service in Victoria, BC"

Not really that targeted yet though. Maybe you only want to work on high end cars.

"We are a high end auto detailing service in Victoria, BC"

I think we can go farther. What kind of high end cars do you work on. Lets say only sports cars.

"We are a high end detailing service for sports cars in Victoria, BC"

Now what kind of sports car?

"We are a high end detailing service for Ferraris in Victoria, BC"

OO how bout where in Victoria

"We are a high end detailing service for Ferraris in Oak Bay, Victoria, BC."

OK so now your thinking "WHAT ARE YOU TALKING ABOUT ALAN there is only one Ferrari in Oak Bay. Now I have niched myself out of profit."

Lets take that to the business model so you can understand what I am talking about now. Here are the advantages of this niche:

1 - You may only have one client but BOY can you charge him alot for the service. He owns a Ferrari, and you are the "expert" in the detailing field for Ferrari's. You know exactly what kind of paint they used on his car, how thick the clear coat is, and which buffing compound is going to bring out that combination to it's best possible shine.

2 - You only have one person to market to so your marketing costs are almost nonexistent, No expensive radio adds, no newspaper announcements, no targeted mail or email campaign. You just have to follow him around one day and when he comes out of his bank just be standing beside his car with your business card and tell him what you do and offer a free first detailing consultation. BAM your in.

3 - Once you have become a market leader in your niche you can look backward a bit and start to expand. Now you go find Lamborghini owners and say, well I'm a Ferrari detailer and I won 100% of the market because I'm that good but ... well .... I guess I could do your Lamborghini for you.

So you can see that even though you started as a super niched company you still had room to move slowly toward the wider market. Ok my example is a bit simple but I'm sure you got my point now.

NOW GO NICHE THYSELF!!!

  

Comments

[Jeff Paul Big League Players Club]

I’ve been reading your post and found it interesting! Internet Marketing these days is spread almost everywhere in the IT world. I run a blog on Internet Marketing so I can use something from your blog as well.

[viagra online]

I just want to emphasize the good work on this blog, has excellent views and a clear vision of what you are looking for