Finding a Niche
For a small business (e.g. homebased business, small business for women, small cleaning business, etc.) it’s really hard to tackle successfully the entire market. If you want to open a shop selling office supplies you may have a tough fight on your hands with Staples with its thousands of locations! This is best done by the largest companies. For small retail companies, the best business strategy is to divide the demand into manageable market niches. Offer specialized goods and attractive services to a specific group of prospective buyers.
There is no doubt that you can find particular products or services that you are suited to provide. You just need to study the market carefully and opportunities will present themselves. Take the example of a surgical instrument firm. Surgical instruments were sold in bulk, both to small medical practices and large hospitals. While the hospitals sterilized the instruments after each use, small practices couldn’t afford to do that, so they disposed of them.
Realizing that, the firm’s sales representatives talked to hospital workers and surgeons to see what would be best suited for them. Using the information they provided, the firm started developing disposable instruments which could be sold in larger quantities at a lower cost. Another example in the surgical instruments niche, is a firm that noted that hospital operating rooms must count the instruments used before the surgery, so they packed their instruments in pre-counted, customized sets for different forms of surgery.
You always need to research your retail business’ market niche, and consider the results of the market survey and the areas in which competitors are firmly situated. Then make a graph or a table to illustrate where an opening might exist for your service or product.
Try finding the best configuration of products, services quality and price that will ensure the least direct competition. However, there is no magical formula that will make these comparisons. The attributes differ from industry to industry, and there is also and imaginative element that cannot be formalized. Take the example above: only someone who previously thought of developing pre-packed surgical instruments could use a survey to determine whether or not there was a market for them.
One thing that can help you sort trough your market information and that can reveal particular segments that were otherwise unseen is a well-designed database. Just ask yourself, for example, if the customers in a certain geographic area have a tendency in purchasing products that combine high price and quality more frequently? Small business clients take advantage of your customer service more often than larger ones? If this is the case then you should consider focusing on being a local provider of high quality services or products that pays extra attention to small businesses.
In the case you are targeting a new niche market, then you should make sure that this niche doesn’t conflict with your overall business plan. For example, a small bakery that will produce hand made cookies will be no competitor for inexpensive, mass-produced cookies, regardless of the demand.
See also Websites for Fashion Brands and How to Name Your Business.