Fledgling firms can struggle to gain traction if they are not targeting a particular niche, so carefully planning and research are needed.
To that end, here are a few steps to take to identify a potentially lucrative and currently untapped niche as you work to realize your business ambitions.
Use the right framework to generate ideas
When it comes to creating business ideas that are actually viable, the CPSO method is a good starting point, especially if you are eager to embrace entrepreneurship but you do not have a specific niche in mind already.
This acronym describes the main components of any revenue stream, starting with the customer, the pain point they have, the solution your organization can provide and the offer that defines how this is accessed. Knowing this framework will allow you to single out niches and then build your business around them.
For example, you might notice that there are potential customers who have lots of different file types across their various devices, creating the complication of compatibility issues, particularly when sharing with others. The solution is to build a service that lets users upload files and convert them to the format of their choice without needing advanced skills or locally installed software, with pricing tiers based on the number of conversions carried out.
The same approach, of highlighting problems and working out how your business can solve them, is the foundation for finding new niches across every industry.
Even if you do have an idea for a business that seems unique, you will likely find that a competitor already exists in this space. This creates challenges in its own right, but also gives you an opportunity to research what your rivals are doing, looking for any opportunities they are missing out on or weaknesses that they have.
As you will likely be aiming to market your business digitally, even if the products and services it provides are physical, your analysis of the competition will also reveal whether or not you stand a good chance of overtaking incumbent brands in a given niche. If the only existing companies have lackluster digital marketing chops, then you could eclipse them with relative ease.
Assess the effectiveness of your business concept
Even if you have managed to overcome the first hurdles of starting a business and you have an idea that you think will work within a niche that you have identified, it is a mistake to assume that ticking these boxes will guarantee success.
This is where testing becomes important, no matter the area you are targeting. Get feedback from prospective customers on products and services during development, so that you can make tweaks and changes if necessary, or even take a different tact entirely if serious flaws are revealed.
Most importantly of all, remember that running a business is a marathon, not a sprint, and so rushing to jump on a niche before you are really ready to exploit it fully is not recommended.