How Small Businesses Find Market Gaps
Every small business knows the importance of finding a niche, especially in today's digital world. It's one of the top buzzwords -- you want to find your niche, mine the niche markets, fill a niche that no one else has thought of before. A well-chosen niche can mean the difference between millions of dollars in revenue with little marketing, or struggling for visibility against far more powerful competitors.
Huge corporations, by definition, do not operate on a local need or specialty interest. Their aim is to appeal to as many people as possible for the maximum number of dollars nationwide or worldwide. This leaves massive needs unmet where the potential audience may only be 100,000 or even 1,000,000 people. Such numbers are beneath the notice of the big players of the business world.
Small businesses cannot compete with corporations on their own playing field. A small business doesn't have the buying power to compete on price, they don't have the distribution, they don't have the sales force, and they don't have the shelf space.
This is why it's absolutely critical for small businesses to learn to completely bypass corporate competition by jumping into the gaps that haven't been filled. How do you go about finding your niche? The process is easier than you might think. With just a few simple steps, you can find people that you connect to, and for whom you are in a unique position to fill a need. These are the steps I've followed while building several small businesses, and they've served me well in a variety of industries.
Find your target market
The traditional model that so many business people follow - produce a product, then find someone to sell it to - is completely backward. You'll just have to work with what you have if you already have a product, but if not then don't be concerned about what you're producing yet. Find the type of people that you can really understand and connect with, and that you know you can serve. Think about anything you are or have been - a beginning entrepreneur who is not successful, a certified dog trainer, the spouse of an alcoholic, the working parent of small children, etc. - and build on that to find people who might be interested in the kind of knowledge that you have and want to share.
Determine your competencies
Once you've found a market that really resonates with you, brainstorm all of the things you bring to the table in your business relationship with them. Let's say you want to serve them in the area of keeping aquariums - do you know about saltwater, or just freshwater? Can you teach them how to breed species that require advanced skill, or should you focus on helping them find healthy fish at the pet store? Take some time to really clarify in your mind what it is you have to offer, but don't necessarily make it into any kind of offering just yet. If possible, discuss your idea with friends or family members -- not to get their take on it, but to see if it's clear enough that they can picture what you're trying to achieve.
Ask the market what it wants
Now that you know to whom you're going to market, and also know what type of products or services you'd like to deliver to them, find out what they really want. Surveys, open answering platforms, and feedback forms are all useful ways of getting thoughts directly from people who fall within your target market. They know better than anyone what the competition lacks. They've most likely already taken the time to comparison shop, maybe already tried out a few products, and can tell you exactly what needs have not yet been filled. This saves you the time of trying to figure out who the competition is, research what they have, find ways to fill in what they don't have. When all that kind of research is done, you only have the knowledge to develop a product and hold your breath that the market even wants what you have. Let them tell you exactly what they want, then focus all your energy on delivering that.
Tell the market you have what it wants
Once you've figured out where your niche is and exactly what the market wants within that scope, the final key to truly filling the gap in the market is to effectively tell them that you have what they requested. This may seem really simple, and it is - but that doesn't make it easy. Take the responses you received in your polls and surveys, and look for repetitive wording. Phrase your marketing messages in a way that resembles this type of wording as closely as possible, so that people reading it will know that you're really talking to them. The more globalized business environment of the present day means that people know they can demand specialization, and they will only respond if they know that you are the embodiment of the niche for which they've been looking.
Give them what you promised
Finally, produce the products that your market has already requested, and keep looking for new ways to fill their needs better. Get a good response with one offering? Ask those people what else they need, what comes next after this purchase. Can't seem to engage your audience? Find ways to narrow them down even more until their common features are apparent.
Ultimately, the key to finding a truly successful niche lies in finding people who know they have a need that they want filled, and with whom you can work to fulfill that need. The more motivated your market is, the easier it will be for you to truly fill out that market gap and become the leader in your particular niche.