Learning how to find your niche as a new business owner is non-negotiable if you want to achieve sustainable, long-term growth.
And yet, many founders skip this step entirely, instead opting to be everything to everyone. This is a mistake.
I know you want to sell more — every entrepreneur does! But a broader niche does not equate to more sales, and here’s why:
Your organisation’s success ultimately depends on your ability to meet your customer’s needs.
Understand your ideal customer’s unique pain points and desires, and you’ll create magnetic messaging that ignites sales. Speak to everyone, and, in the words of Seth Godin, you’ll speak to no one.
Figuring out how to niche down can seem tricky, but with the right tools and research, you can make a data-driven decision that (1) distinguishes you from the competition and (2) demands a premium price. Here’s what you need to know:
What is niche marketing?
A niche market is a focus or specialisation within a broader market — a subset with a unique identity, characteristics, and needs.
To understand how to find your niche, let’s take the fitness industry. Within that wide-ranging market, you’ve got distinct segments: yoga, CrossFit, weight loss, combat sports, running… the list goes on.
We can then take any of those segments and continue to niche down further. For example, not all runners are the same. An ultra-marathoner's pain points will likely differ from someone training for their first couch-to-5K.
If you’re starting your business, I suggest narrowing it down as much as possible. That’s because the more tightly focused your speciality, the more impactful your marketing — and the easier it is to stand out from your competition.
What are the advantages of niche marketing?
Let’s take a closer look at the tangible benefits of niche marketing:
Improves your messaging and marketing
We touched on this point above, but it bears repeating:
If you want to create products people actually want, you’ve got to intimately understand your target market, and you must know how your product solves their problems and meets their needs.
So, hone in on who you serve. Get crystal-clear on their pain points. Then, position your brand as the best possible solution to your target buyer’s needs. You’ll improve your marketing ROI with laser-focused campaigns that deeply connect with your audience.
If you’re building a new business, don’t try to compete against more prominent, well-established brands with bigger marketing budgets.
Instead, niche down to minimise your competition and outperform them in that niche. You’ll boost your chances of standing out so your brand doesn’t drown in a sea of sameness.
Commands higher price-points
Let’s say your product is a time-management app. If you’re targeting the general population, what could you charge? Of course, we need more information to answer this question accurately, but a quick Google search reveals somewhere in the ballpark of $10 - $20 a month.
Now imagine you master how to find your niche and create time-management software for the dental industry. You conduct market validation and craft a product dentists want: HIPAA-compliant software with streamlined patient communication and paperless billing.
How much would this specialised product be worth to a busy dental practice? Glancing at the competition, easily $200 or more.
This is a simplified exercise, but my point is this:
Learn how to find your niche, and you’ll create products and services with a higher perceived value, which is an excellent thing for your bottom line.
Establishes your expertise
I’m sure you’ve heard the figure of speech, “Jack of all trades, master of none.”
It’s much easier to position yourself as an expert on a pocket of topics than to prove your authority on a broad range of generalised themes. So, niche down to demonstrate your unique knowledge and attract more ideal customers along the way.
How to find your niche: 5 steps to niche research that works
As you work through the following five steps, I want you to remember this:
Choosing a niche is not like marrying your partner — you are not committed to one industry forever and always.
Changing or even adding niches as you build your business is fine. With the right go-to-market strategy, you’ll quickly discover what works (and doesn’t) so you can concentrate your efforts in the right places.
1. Talk to your potential customers
Don’t guess which niches are underserved or neglected. Buyer personas based on surface-level assumptions and fictional profiles don’t work — and they certainly won’t help you narrow in on a niche with a tangible pain point.
Talk to potential buyers when you conduct your market research. Need help reaching them? Search customer reviews to discover unmet needs or use forums like Quora to ask questions from your target audience.
2. Consider which niches you already understand well
Sure, you can enter a niche you know nothing about, but doing so will require a steep learning curve.
I suggest you first consider your passions and interests — the topics in which you are already well versed, the industries where you know there is a gap in the market because you, too, are a target customer.
You’ll streamline learning how to find your niche when you choose a focus that aligns with your strengths and interests.
3. Research which niches have significant market potential
You want to niche down, but you also want to establish a large enough demand to create profitability. In other words, you want to ensure you’ll have enough customers.
Use tools like Google Analytics and Google Trends to get a helpful snapshot of market demand.
4. Look at the competition
If your niche already has a lot of competition, you might be looking at an oversaturated market. And if there is no competition? That could be a red flag that there isn’t enough market potential…
This is a good list of competitor research tools that can help you with this stage of market research.
When identifying competitors, look at trends that could affect future sales, including AI, that could shift the competitive landscape. (Hello, ChatGPT.)
5. Test your niche
Before you spend countless hours creating a costly and complicated marketing campaign, test your niche following my winning go-to-market strategy.
As you get started with how to find your niche, it’s okay if something doesn’t quite click. This is your opportunity to learn and optimise — to dip your toe in your chosen niche before you dive in head first.
Follow these niche research tips to clarify your target market and ensure product/market fit. You’ll supercharge your marketing with more aligned messaging to scale more quickly and profitably.