Niches in a Nutshell

If you've heard the old addage, "Find something you like to do and figure out a way to get paid for it" then you already understand the basic idea behind the niche.

When you're talking about a niche in business, you're talking about a targetable portion of a market. A niche addresses the need for a product or service that is not being provided by other mainstream businesses. You could also think of a niche market as a narrowly defined group of potential customers.

Here's a few examples:

• If you're really into gardening, you might consider this as a business. In order to go after the niche, you'd have to specialize in just one type of gardening or plant instead of gardening in general. You might consider rose gardening, plant propagation, or composting for example.

• Let's say that you like to hike. You might choose a niche like Colorado mountain hiking, little known hiking destinations, or specialized hiking equipment.

• If you're a health and fitness nut, you might be tempted to choose weight loss, exercise, or dieting as your business... but those markets are completely saturated. A better choice might be a line of children's exercise videos, exercises for the morbidly obese, or kid sized exercise equipment.

I'm sure you get the general idea here, but you can click here (opens in new window) to see hundreds of other examples of niche markets that you can use to spark your imagination and get you thinking.

You may be asking yourself at this point why you should try to find a niche... after all, isn't there more money to be made in bigger markets?

Well, yes and no.

There is a lot of money to be made in a general market, but it's also a lot harder to get your piece of the pie. The greatest advantage of finding a profitable niche is that you can have the entire pie (or most of it) rather than just a tiny sliver.

In addition, it's very difficult to compete with other businesses (most of them very large) in a large general market... especially when you're just starting out. Those big businesses have big budgets, lots of employees, and a lot more experience in their market then you'll have. It's just too hard to compete in general markets.

That's not to say that big businesses don't go after niches as well. Many of the most successful corporations and businesses today only do one thing like Pepsi, Hummer, and Microsoft. Others started with one thing and then gradually expanded their market like Heinz, IBM, Ford.

How do you find a niche?

Excellent question!

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