How to set up a niche business

Handwritten 'find your niche' on a notepad on a deskMany small firms offer specialist products and services aimed at niche sectors. Bruce Townsend of SellerDeck finds out how small can be beautiful

Not every business can be an Amazon. In truth, in business not everyone wants to be. But whether you want to be the next Richard Branson or just make a quiet living and be your own boss, you need to start somewhere. In a successful company, every area of the business will be firing on all cylinders. To make that happen, you need to focus. You need to do the key things well and avoid spreading yourself too thin. In short, you need to find a niche in which you can thrive.

Find a gap in the market

Just because you find a niche, doesn’t necessarily mean there’s an opportunity. There may be a hundred businesses already exploiting that gap and doing it better than you could. But where products are hard to obtain or the available range is limited, of poor quality or excessively priced, there are usually pickings to be found.

Use your expertise

Staff in larger companies usually only have good knowledge of the best-selling products. By specialising, you can build up enough knowledge to answer the more difficult questions and provide quality advice and information. You may even be able to use knowledge and expertise you already have. For example if you take your existing bricks and mortar company online or turn your hobby into a business.

The International Magic Shop illustrates this well. It is a family-run business with over 50 years’ experience selling magic tricks, books and accessories in central London. Its wealth of knowledge and experience made it easier to succeed online than if it had started from scratch.

Condense your knowledge into information pages and FAQs on your website and use that knowledge as a source of tips you can share via social media. This will attract visitors and links to your website further building your reputation and making it more appealing to search engines.

Do take it personally

Large businesses with thousands of customers generally find it impossible to provide the personal touch to their customers. But a smaller business can often provide a much warmer experience. You may begin to recognise customers who purchase repeatedly - and find ways to acknowledge them and personalize your service to their specific wants, needs and preferences.

Traditional baker Botham’s of Whitby includes an individually printed gift tag with every parcel and acknowledges orders from repeat customers with a personalised message. This makes each sale a personal experience and makes customers feel they are dealing with people, not just a machine.

With smart use of email and customer data even your marketing can be personalized. You can tailor your offers and messages to specific groups of customers. Don’t overdo it though. Communicate in person as much as you can.

Grow by small steps

Once you are established in a niche, it becomes easier to spot other opportunities in adjacent ones, and move to exploit them. It’s always easier to expand into areas that have something in common with your current business than to take a great leap into something completely unknown.

Key steps to successfully setting up a niche business

  • Find a gap in the market - go where the market is less crowded
  • Use your expertise - market your knowledge not just your products
  • Do take it personally - personalise your communication
  • Grow by small steps - don’t take the risk of giant leaps

Written by Bruce Townsend of SellerDeck.

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