Get a Life! Volume 3 Issue 6

The importance of defining a clear niche for your business

In most of the coaching work I am doing these days, eager entrepreneurs-to-be come to me brimming with plans to create an exciting product or service. Brainstorming is the fun part: there are so many directions to go and so many markets to serve. The tough part is deciding which particular group of people and part of the market they should focus on first. So we always start by defining a niche.

So what exactly is a niche?

The word niche comes from the French verb nichier which means "to nest." The most appropriate definition of niche for the purpose of this conversation according to Websters Dictionary is "The area within a habitat occupied by an organism." That may sound very National Geographic, so let me add Michael Port's definition:

"It's important to understand the difference between your target market and your niche. If you've done other research or reading on the subject of building your business, you may have heard both of these terms before and you may have heard them used interchangeably.

However, they are not the same . . .Your target market is the group of people you serve, and your niche is the service you specialize in offering to your target market." (emphasis added)

People pronounce the word different ways. Some pronounce it "nitch" while others "neesh." I am in the "neesh" department, as I rarely have the opportunity to show off my high school French that I picked up as an exchange student living in Switzerland. I don't know why, but words pronounced with a French accent just sound smarter.

An example of a niche for a financial planner would be:

Broad market segment: Men
Target Market: Divorced African-American male entrepreneurs aged 50-55 who graduated Summa Cum Laude from a Top 10 College, make more than $250,000/year and live in the greater New York area.
Niche: Useful, quick investment information for the self-employed delivered via iPod and Blackberry

Why is it important to define a niche?

The main reason to get clear on your niche is so that you know how to reach your intended audience. A colleague of mine recently had a client come to her with a great epiphany. "Guess what, I have finally taken your message to heart and have chosen a very specific niche! I have decided that I only want to work with women."

That narrowed her market down to a mere 3 billion people.

The benefits of a tight niche are many:

You can immediately think of publications that write for this market, and target your PR efforts
You can identify which associations might cater to this market (in my example, you could explore alumni associations of Top 10 colleges or entrepreneur associations that target African American professionals) and try to get speaking gigs
You can identify websites or blogs that target this market and post ads or write valuable comments on blogs
You can be very specific in your marketing materials about the type of problems your product or service addresses. And if you do it right, people will say things like "I read your website and felt like you were talking directly to me!"

Why do people resist defining a tight niche?

Most creative thinkers and entrepreneurs live in the world of possibility. Dreaming up new plans to take over the world is the most fun part of the job. The tough part is choosing an area of the market to focus on and penetrate deeply. According to my friend Suzanne Falter-Barns, you want your niche to be "an inch wide and a mile deep."

The process of choosing a slim portion of the population to work with can feel limiting and confining. Don't worry - you are not committing yourself to a lifetime of serving 65 year old Anglo grandmas with Chihuahuas who live in Sioux City, Iowa. You may just start with them to get a toehold in your business. Then you can expand out to other markets like 25 year old aspiring models from New York City who have Asthma and pink poodles. If you don't define a tight target market and differentiated service, you will find yourself drowning in the ocean of possibility. Get your toes wet in the kiddie pool first.

How do I find my niche?

Believe it or not, finding your target market can have the grand overtones of a spiritual quest. What you are really doing is finding your people who will support and embrace what you do with gusto. The best way to get clear on your niche is to ask yourself the simple question:

Who would I really enjoy working with that would find my product or service extremely valuable and has the means to pay for it?

You can get ideas for the type of people in your niche by looking at:

Magazines: Do your people read Wired, Mother Jones or the Harvard Business Review?
Organizations: Do your people belong to the Young Republicans or the local Greenpeace Chapter?
Movies: Would your people be drawn to the latest sequel of Police Academy or an obscure foreign film with subtitles?
Music: Do your people listen to Eminem or Andrea Bocelli?
Stores: Do your people shop at Costco or Whole Foods? (for those outside the US, Costco is a large volume discount retailer, while Whole Foods is an upscale health food market)
Websites: Do your people frequent Joel on Software or Shoewawa?

Should I care about a niche if I am an employee of a company?

I think defining the "part of the habitat that you occupy" is critical for both employees and entrepreneurs. You need to get clear on the types of people and work that energize you the most if you want to have a fulfilling career.

A sassy blog reader named Kathy Doran just sent me her book called Finding Your Niche Can be a Real Bitch . . . but it doesn't have to be. She sent me a note with the book on her personalized stationary which says "Nitch Bitch." That just cracked me up, as I am always a fan of an edgy brand name. In her slim but informative book, she interviews lots of people such as Scott Adams of Dilbert fame who have found their niche in the world. You may get some inspiration for finding your own niche by reading her stories.

In Escape from Cubicle Nation, I write about 5 entries a week on topics related to helping people in corporate jobs break out and start their own business. Here are some recent posts from the month of June:

Is starting a small business impossible if you are the sole income earner in your family?
What’s in a brand name? More than you think
Creating a Dr. Seuss business plan and other questionable things I did when I started my business
Dr. Seuss aside, what I did RIGHT when I started my business
How can you find great mentors?

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-Pam

Pamela Slim
Ganas Consulting
7744 E. Albany Street
Mesa, AZ 85207
480-663-3252
pcs@ganas.com
www.ganas.com

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