Finding Your Business Niche
by Phil Hanson
Starting a new business – especially if you’ve never before been in business for yourself – can be a bit intimidating if you don’t have a clear idea of what your business is to be about. What kind of product or service will you offer? Who are your customers? How much competition will you have? Must you have special skills, and if so, do you have them? Can you offer a level of service or quality that your competition cannot? Knowing the answers to these questions won’t guarantee your success, but they can help to remove some of the uncertainties you’ll face during the startup process.
Use previously gained assets to your best advantage. Your prior knowledge, training and experience mean there’ll be that much less for you to learn about running your new business, saving you time, effort and energy. Do you have specialized knowledge about a particular product, service, system or piece of equipment? If so, can you build a business around it? Can you incorporate it into your business? The fewer things you need to learn about, the shorter the learning curve. If you have a wheel that works, there’s no need to reinvent it.
Every business depends on selling something in order to make a profit; profits are highest when influencing factors work in harmony. Whether you’re planning to sell a product, a service, or a combination of these, efficiency and frequency are the keys that open the doors to big profits.
Greater efficiency means your business runs smoother, thus lowering your costs to achieve a major business goal, i.e., make a sale. Lower operating costs increase your profit margin, which benefits you in one of two ways. You earn higher profits as you increase the frequency of sales, or you can lower your sales price to thwart your competition and still make a profit.
Because market demand sets market value, you can sell your product or service for a higher price if there is great demand for it. Of course, competition strongly influences market demand, too. When competition floods the market with identical or similar products or services, you must either lower price to undercut the competition or improve quality to increase perceived value in the minds of potential customers.
It’s helpful to know if a market exists for your product or service before you finish laying the groundwork for your work-at-home business. Neighborhood canvassing, telephone surveys and in-depth demographic studies are among your primary tools for market discovery. At the same time you’re researching markets, you should also be researching your competition.
Markets exist because of need and/or desire. It’s generally futile to try to sell to someone who has no need for your product or service. While you almost certainly can’t create a need for something, it’s not beyond the realm of possibility to discover a previously unrecognized need for the same thing. All it takes is diligence, imagination, creativity and acute powers of observation.
Selling to someone who desires your products or services is often easier than selling to someone who needs them. Many people place desire ahead of need in the pecking order of spending priorities. You’ll find the most ready-to-buy customers among those who also need the things they want.
In this age of specialization, it pays to specialize. If you cater to a low-end market you’ll have to sell lower-quality goods for a lower price in order to generate enough sales to make a profit. The drawback is that you’ll find more competition in this market. The payback is that it’s a very large market. Should you target an upscale market, where there’s less competition, you’ll have fewer customers, but they’ll gladly pay higher prices for high-end merchandise. When you sell to the upscale crowd, however, your products and services must be exemplary.
In a world of infinite possibilities, all possibilities exist. Everything has its niche, and a niche is where you’ll find your fortune.
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