- A business niche is a specialized or focused area of a broader market that businesses can serve to differentiate themselves from the competition.
- Business owners should find a niche in their industry that has underserved or unmet needs.
- To find your niche, follow this strategy: Select your target audience, define an unmet or underserved need, research your customer base, create your business plan, and market your business to your specific audience.
Whether you open a business in a unique industry or a saturated market, it is important to differentiate yourself from the competition to win over your audience. To do this, entrepreneurs should find a specific business niche to target and modify their market strategy to accommodate that audience.
What is a business niche?
A business niche is a specialized or focused area of a broader market that your business serves specifically. According to Charlene Walters, business and branding mentor and author of Own Your Other, finding a niche differentiates your business from the competition and allows you to excel in your sector.
“A business niche is a hole in the current market where the business’s USP (unique selling proposition) will be appreciated by a select group of customers, or target audience,” Walters told Business News Daily. “This target audience might be one that is currently underserved and/or has a large market potential.”
Finding a niche is important for small business owners who want to not only create a steady stream of revenue, but also establish a loyal audience. Walters said that a solid market niche helps to ensure that a particular group of customers will want to buy from your business, instead of going to the competition.
Matt Woodley is an online entrepreneur, which caters to the international moving niche. He said that creating a business in a niche market sometimes gives entrepreneurs the ability to charge higher rates for their products or services. The supply and demand ratio, especially for those pioneering a new industry sector, can be extremely lucrative and gives you the chance to become the expert and thought leader in your field.
What is an example of a niche market?
There are several niche markets within every industry. If you think of a very specific product that serves one of your unique needs, it can probably be classified as a niche business idea. Walters mentioned the example of professional, wrinkle-free clothing: If a clothing company wanted to target executive women who travel frequently, it would make sense to have a line of wrinkle-free clothing to serve that specific need.
When asked about a profitable niche business, Woodley referred and explained how it served a large niche market to become successful. “Many niche businesses that fill a hole in the market no one previously recognized quickly come to be considered essential. For instance, a delivery service in New Jersey provided parents of infants with a convenient, affordable service that many came to rely on, eventually sold to Amazon for $545 million.”