Enterprising entrepreneurs know that a successful start-up business offers a service or product that fills some sort of gap in demand. Most new companies, after all, cannot compete head to head with large firms unless their product is distinct and unique, in some form or another, utilizing custom software design or customized tools of some variety.
Consequently, it is no surprise that many entrepreneurs find themselves entering niche industries with a niche consumer base, at least when they first get started.
There are many benefits to working in a niche industry. It is often easier to know and target your demographic base. Even new businesses can more accurately forecast sales, advertise correctly, and tailor the specifics of their product or service when they are entering a niche industry.
At the same time, though, there are some key drawbacks. The industry might be hard to break into. Your potential consumers may already be deeply loyal to another brand, even if your product does offer a unique position or superior quality. And, of course, the consumer base many be very small–sometimes not even fully existent yet.
What both these benefits and drawbacks have in common is one key thing: the element of community. Niche products usually target niche buyers and are a part of niche industries, all of which means that all this specialization probably yields a pretty cohesive community of potential buyers. Whether the product is a special shoe for rock climbing, a laundry service for bankers, or a new mobile app, you’re dealing with a market that is likely not just limited in size but also is highly interconnected on several levels.
Knowing the community can provide you access to all the aforementioned benefits of working in a niche field. Not being able to adequately permeate it, conversely, may render your new business plagued by all of those drawbacks.
With this in mind, it behooves the entrepreneur to consider their potential access – or lack thereof – to a niche community before starting a business and rolling out a new product. This does not mean that, as the entrepreneur, you need to be part of the community yourself. But your business model should be understood by your clients and you should possess the ability to reach the publications, websites, and social media that your target demographic values most.
There are many ways to go about doing this. Still, an entrepreneur may be best served to work within a niche community he knows best. Doing so offers an already-existent structure through which to go about connecting with the most important consumers and players in the industry. More concretely, it probably means you have friends and associates out there who know what you need, and furthermore who know people that can help you reach those objectives.
In some industries it is not only beneficial but necessary to understand your niche community. For example, if you’re improving upon an already established technology or service you need to be aware of all feedback from the community. You can’t develop a proprietary system without understanding what has worked and what hasn’t worked in the past.
This will also ensure that your company has an immediate familiarity with every aspect of the process. Anyone can have a great idea, even if they have no connection to a particular service or industry, but it takes that familiarly to most successful see the idea through.
So when you’re looking to start or expand your business, create or market a new idea, make sure not to lose focus on the importance of niche community. It’s a powerful concept in the entrepreneurial world – and, no doubt, you’re going to want to penetrate it.
Article contributed by Jenna Smith