Finding a Niche Industry for Your Start-Up
The first year of the Covid-19 pandemic brought a 24% increase in new business applications, according to the Economic Innovations Group™. This reveals two things: First, more people are taking the plunge and starting their own businesses. Second, as a result, it’s even harder to find a niche for such a business to address. That doesn’t make it impossible, but it does mean a prospective business owner must do more research before launching a new undertaking.
Identify an Area of Need
Steph West spent more than a decade in a public school system in Texas, working with neurodiverse students and their families. She decided to step outside school board policies and limitations to start her own business, Starfish Social Club™, focused on the needs and challenges facing this special student population. “When you work in a very specific zone of genius, you can have a stronger impact,” says West. Such a niche is also more lucrative both because it addresses an underserved need and because there’s less competition within that space. “In my situation, teachers were being asked and expected to teach social skills to autistic students without having the knowledge, desire, or sometimes even the mindset to be able to do so successfully,” says West. “There was an overall feeling of kids not making progress, but no real solution to address either the employee or the customer challenge.”
Finding Your Own Space
To identify an area of focus for your small business, consider the following questions.
Where is the current model failing?
Consider where people must “make do” with the current product, service, or system. Consider offerings that are helpful, but inadequate to solve a particular problem.
What are the pain points in your industry that don’t ever get addressed?
What things do current customers complain about?
How do current companies in the industry fill in the blanks: “I wish we could ______, but ________.”
Write full answers to all these questions and a roadmap for new business will emerge. The more specific issues you address, the better defined the niche you can fill.
Seek Opportunities for Improved Service
Some of the most innovative companies found ways to serve their customers more directly. Amazon™ eliminated bookstores from its supply chain. Carvana™ eliminated the need for sales staff. West initially focused her business on educating teachers about supporting children and teens on the Autism Spectrum, but she encountered a number of obstacles and decided to refocus her efforts. Starfish Social Club now works directly with students and their families.
“Since I was the expert, working directly with kids was the only way to make sure the kids were getting the best results possible,” says West. “Also, my reach was so small working within the school system. I could only cover one school district in my state. So I figured out how I could do this on a national scale in person and online.”
Write Your Own Rules
In many industries, restrictions and regulations choke new businesses. While you can’t ignore legal or governmental mandates, it is often possible to refine a business focus in order to move just outside the bureaucratic entanglements. West realized the restrictions of the public school system were restraining her and limiting her impact.
“Most rules are the result of a belief regarding a lack of time, money, and/or talent,” says West. “When you go out on your own, you are now the talent, you are willing to invest your time, and you realize that money is everywhere. All the supposed rules disappear.” Consider what you can accomplish if you have the freedom to solve problems in your industry.
Evaluate Developing Opportunities
New and developing industries are most likely to have their greatest opportunities ahead. Consider those industries and how to carve your own niche within them. Online investing, cannabis, entertainment, and adult beverages all are undergoing significant growth and innovation. Developing your own portion of a growth industry puts your business in position to dominate that sphere.
Take Action; Earn Profit
The longer you wait to identify and pursue the opportunity you love, the more likely it is that someone will beat you to that space. Research and planning are critical steps. It’s important to understand market trends and areas of developing consumer passion. You need a partner with the experience and innovation to guide you to your perfect niche. Contact the experts at The Profit Link, a small business support team based in Memphis, TN, for help defining your space, developing a business plan, and creating a brand that will serve you well into the future! We want to link your business to profit today.