Trying to tackle a wide market is usually too broad of a scope for any but the largest companies to handle.
As a smaller business, it's often a better strategy to try to divide potential demand for offerings into manageable market niches. Small operations can then offer specialized goods and services that are attractive to a specific group of prospective buyers.
There are undoubtedly some particular products or services that you will be especially suited to provide. Study the market carefully and you will find opportunities. For example, surgical instruments used to be sold in bulk to both small medical practices and large hospitals. One firm realized that the smaller practices often disposed of instruments because they could not afford to sterilize them after each use like hospitals did. The firm's sales representatives talked to surgeons and hospital workers to learn what would be more suitable for them. Based on this information, the company developed disposable instruments that could be sold in larger quantities at a lower cost. Another company capitalized on the fact that hospital operating rooms must carefully count the instruments used before and after surgery. This company met that particular need by packaging instruments in pre-counted, customized sets for different forms of surgery.
To research your own company's niche, consider conducting a market survey with potential customers to uncover untapped needs. During your research process, also identify the areas in which your competitors are already firmly situated. Put this information into a table or a graph to illustrate where an opening might exist for your product or service. Your goal should be to try to find the right configuration of products, services, quality, and price that will ensure the least direct competition. Unfortunately, there is no universal method for making these comparisons effectively. Not only will the desired attributes vary from industry to industry, but there is also an element of creativity that is needed. For example, only someone who had already thought of developing pre-packaged surgical instruments could use a survey to determine whether or not a market actually existed for them.
If you do find a new niche market, make sure that this niche doesn't conflict with your overall business plan. For example, a small bakery that makes cookies by hand cannot go after a market for inexpensive, mass-produced cookies, regardless of the demand.
Next Avenue Editors Also Recommend:
- A Small Business Is Small Only in Name
- Common Bookkeeping Tips for a Small Business
- What You’ll Need for a Small Business Loan
- How to Market Your Small Business
Next Avenue brings you stories that are inspiring and change lives. We know that because we hear it from our readers every single day. One reader says,
"Every time I read a post, I feel like I'm able to take a single, clear lesson away from it, which is why I think it's so great."
Your generous donation will help us continue to bring you the information you care about. Every dollar donated allows us to remain a free and accessible public service. What story will you help make possible?