How Niche Markets Relate to the Success of a Small Business
The success of many small businesses relies on finding the correct niche in which to market their goods or services. Competition between larger corporations and smaller businesses can be too much for the small business to succeed. Finding a unique niche and doing it well brings in many benefits to the small business. Sources for inspiration in finding that niche are all around the small business owner if they will just do the research and take a moment to look around. Finding the niche is just the beginning, for success though, it will start with creating a solid business plan. That business plan sets forth rules on entering, maintaining, and even exiting the niche market(s) if the need arises.
What is a Niche
A niche is a smaller section of the market that is not being met by the mainstream. It is typically overlooked by larger businesses. “A niche can be defined in many ways, including by geography, by customer profile, by product, by product usage, and many others. (Pearson, 2011). A niche may be served by brick and mortar stores or for further reach via the web, or both. A product within a niche is meant to appeal strongly to a narrow set of tastes (Anderson, 2008). As a small business owner, it is your decision on what type of niche to even enter. You can choose business to business or business to consumer niches and then narrow things down from there.
Purpose of a Niche Market
“You don’t need a lot of things to start a business…but you must have one thing. You must have a customer. Go get that customer.” (Fox, 2004). Getting that customer though in part requires you to offer some good or service that is needed or wanted. Since a niche market is a focused section of a market, a small business will be able to meet the specialized needs of the targeted population better than the larger companies whose focus covers a wider range. You really need to meet the needs of the target customers and retain their loyalty for success. (CCH, 1998) This is where small businesses can reap big benefits. An untapped niche in a market is an opportunity waiting to be discovered. Without small businesses marketing their goods and services in unique niches, many specialized needs of consumers would go unmet.
Large Market Competition
Competitive advantage is a great benefit to have in any size market. When as a small business, you are trying to take care of a larger market, it can be hard to outshine the larger competitors that have more resources. But, when you refine your product or service to a specialty item that is not available mainstream, you have created a market for that niche. “The advantage that small businesses have here is that they can be profitable serving a relatively small niche – one that, say, a Fortune 500 company would consider too small to pursue” (CCH, 1998). This helps eliminate the competition from bigger companies and lets you focus on your small slice of the market without...