The profitable market niche selection process should not be something of the other world, but with some steps, you could well choose the market segment.
The concept of a niche market is linked to the world of marketing and advertising. I remember that the first time I heard that word was in the university in the subject Marketing. However, over time I have realized that, beyond any definition, market niches are financial opportunities. This is why in Finance & Projects I show you how to identify them to start a business idea.
What is a profitable market niche and how does it work?
The concept refers to a group of people or companies that have a series of needs in common and that has the will and economic capacity to satisfy them. Note that a niche is not limited to a community with mutual interests and nothing else, but focuses on the willingness and economic capacity to cover it.
This is key to understanding the operation of the market segment, because it may be the case that in a segment the needs and the will coincide, but lack the economic capacity. Or in the same way that there is economic capacity, and not a need or will; therefore there is no such niche. Which means that these three characteristics must coincide so that then there is a financial opportunity.
In that sense, the operation is summarized to how these variables interact (interests in common, will and capacity) within the concept of supply and demand. Where the company “A” makes available to the chosen segment, the products and services it offers, and the manner in which they are or are not accepted by that audience.
Identification process of a profitable market niche
Taking into account what it is and how it works, the key to everything related to the niche market is its identification. That is, to locate that group of people or companies with common interests, with the will and economic capacity to satisfy that need that defines them as a group.
And for this, you have several types of approaches, depending on the line of thought you follow. However, I want to show you a simple way where you can identify the market to invest your money.
Search your ideal consumer
The first step in the identification process is to have that ideal client. That person or company that meets all your expectations. In other words, the prince or blue princess of your fairy tale called entrepreneurship.
This part does not have to be very schematized or with business report borders. What you are going to do is sit down one day and start describing that person; For example, you can describe it as follows: An adult person (25 to 45 years old) who lives in the city, who works, can be single or married, without children, with needs to save time, etc.
As you can see this is not quantum mathematics or spatial physics, it does not have to be a mega-process of white collar with suit and tie, on the contrary, it should be simple, where you see those things that make this character the ideal client or consumer of the product or service that you have in mind or that you have already launched to the market.
Analyze if there are ideas or ventures similar to yours
In this world, there are few “new” things because almost everything is invented. In fact, the Bible states that there is nothing new under the sun; that in essence humanity repeats or recycles ideas, giving it a touch of improvement. But in essence, everything is the same.
Therefore, your idea of entrepreneurship, it is very likely that another person has something similar or similar out there. In case that is so, then you have to analyze what that endeavor has done. This does not mean that you are going to copy things, but to see how viable it is for you to enter that profitable market niche and if it is indeed profitable to live from that.
During this process you must analyze variables such as the time that this idea has in the market, how much, at least visibly, has the brand grown; if it is handled with offers, its prices, etc. You will try to dismember the different elements of that idea that is running around, whether or not it is successful.
This step is extremely important because by analyzing this you can, at the same time, see opportunities to differentiate and give added value to your project. So, it is crucial that you carry it out.
Defer and add value
After analyzing you have to enter a process of differentiation, where you will look for your uniqueness. This is key and is concatenated with the previous analysis, because to the extent that you are different and you add value to your proposal, your chances of success increase.
Now, do not break your head either by creating a spaceship. It’s not that you have to do something “spectacular” but that you see what makes you unique. And I tell you because the tendency is that you have to do something so unique that one does not exist. But if it were always like this, then banks would not offer credit cards, because at the end of the day the operation is the same, they are all the same.
What makes them different from each other are small details, almost imperceptible, so by differentiating and adding value what you are doing is putting a dot and followed the paragraph. Which means that you have to do the things that work already, and add your particularity and there you have your difference.
Make the numbers and make a decision
Finally, to identify a profitable market niche to start, you have to do the numbers. At the end of the day, every business seeks to generate profits. And if the numbers do not give, then it’s not the right niche for you.
In this, you are likely to need the assistance of a financier although it is not essential. You can do your own calculations and find out if this is a good idea or not. These numbers have to start from your initial investment or seed capital, from the budget of your venture, from the sustainability of the venture and from your capacity to have income.
When these factors are combined and the result is positive, you are in front of a profitable niche to undertake, which means that you have the go-ahead to enter this day. Of course, it is valid to clarify that paper holds everything and that in designs and projections we all win.
However, beyond the eventualities that may arise; When you do this preliminary analysis, and a business plan that supports it, the chances of success are greater than those of failure, therefore, my recommendation is that before entering a market segment, first take into account this process of selection of a niche.
Selecting the profitable market niche represents most of the success of any enterprise, since to the extent that this is the right one; it substantially increases the success levels of any business.
In that sense, the selection process should not be something of the other world, but with some steps, you could well choose the market segment that best suits you. For this you must:
- Search for the ideal consumer or customer
- Analyze existing ideas or ventures
- Differentiate yourself and add value
- Make the numbers and make a decision.
These four elements must be sufficient for your market niche to be clarified for you. But in the same way, I would like to know your opinions and comments, you can write them in the form below and share this entry via your social networks or electronic mail.