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How Viable is Your Market Niche?

Guest post by: Kerri Salls

Article Overview: Before you invest, test the market niche viability for your business. It’s the same test whether you are starting the business or expanding and looking for new markets for your product/service. Here’s a quick assessment of the niche you selected that you can do individually or with your team:

How Viable is Your Market Niche?

As you know, identifying a target niche and what to do to claim your market niche is not enough. You still have to validate the viability of the market niche you chose.

Before you invest, test the market niche viability for your business. It’s the same test whether you are starting the business or expanding and looking for new markets for your product/service. Here’s a quick assessment of the niche you selected that you can do individually or with your team:

1. Are you passionate about it? Can you see yourself serving this niche for a long time, or will you get bored?

2. Is there a clearly identified need? Is it a valuable and compelling need? Can you provide beneficial results?

3. Is there room in the market for you? Search online or offline. Find out how many people/companies are doing this. If you find a lot, you may want to dig deeper to define your own sub-niche within that niche – where your product can standout.

4. On the flipside, if there’s no one else doing it, why not? Is there a barrier to entry no one else has broken through? Or maybe you are extremely original? Or maybe you defined your niche too narrowly? Or too early?

5. To be viable, your clients have to be able to pay for your service. If they need you but can’t pay, and you serve them, then it’s charity. Pro bono work is very generous, but does not pay your bills to stay in business or pay your team. So the bottom line question has to be; can your potential clients afford to pay you? Do they have the wherewithal in their cash flow to purchase your product or contract for your service? If not, they aren’t your clients.

6. Do the individuals/decision makers in your target niche form an identifiable group? Do they identify themselves as members of that named group? It could be an association they belong to, the department they head-up, or the industry tradeshow they attend.

7. Can you find your ideal clients? Especially groups of them? Is there an association, list or other resource where you can find them all? There are many great target niches among the 13 million small business owners out there – not all of them can be found. Target the ones you can find.

8. Can you reach them? If they don’t know about you, how will you get in front of them or communicate with them?

The answers to these questions will help focus your research on the market opportunity for your product/service. Test the viability before you invest.

I’ve seen a number of startup presentations being pitched by startup companies to the venture capital market. Many of these same questions come up over and over before the angels and venture capitalists will open their checkbooks. The principles are the same.

After all that work identifying and claiming your niche, you are not done. You know you can’t afford to make a mistake – it would be too costly in time or money. But, at this point, it is easy to let human nature lead you down a path of self-congratulation only to end up without a business in short order. To avert that outcome, here are four common mistakes to avoid.

1. Don’t choose a niche because it’s popular – why do you want to create more competition for yourself?

2. Don’t choose a niche just because you know it – you need to pick something you like. I know retail sales and merchandising. I love technology and I have an affinity for the people who create great new things.

3. Don’t pick a niche lightly or too quickly – research your possibilities, take the time necessary to work through the process.

4. Don’t pick a niche and then stop. Your niche is the basis of everything you do – the impetus at this point is to craft the business to serve this niche.

It is very easy to get consumed working hard and doing a job well and skip this task. Nevertheless, you must support your offering with a serious investment in thoughtful marketing efforts focused on a clear proven opportunity, or you will not fill the sales pipeline.

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Article Tags: market niche, market testing, market viability, marketing, niche market



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