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5 Ways to Find the Right Niche and Target Market for Your Small Business

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5 Ways to Find the Right Niche and Target Market for Your Small Business

By Caron_Beesley, Contributor
Published: November 10, 2011 Updated: August 18, 2015

One of the first steps in the business planning process is determining who your target market is and why they would want to buy from you.

It sounds simple, but do you really know what you are selling and to whom? Is the market you serve the best one for your product or service? Are the benefits of dealing with your business clear and are they aligned with those or your target customers?

If you aren’t sure about the answers to any of these questions then you need to step back and revisit the foundation of your business plan.

The following tips can help you be clear about what your business has to offer, identify the right target market for it and build a niche for yourself there.

Be Clear about What you Have to Offer

Sounds obvious, but more than just a product or service, what are you really selling? Think about it.  Your town probably has several restaurants all selling one fundamental product—food. But I’ll bet one sells drive-thru fast food, perhaps another sells pizza in a rustic Italian kitchen, and maybe there’s also a fine dining seafood restaurant that specializes in wood-grilled fare. All these restaurants sell meals, but they sell them to targeted clientele that is looking for the unique benefits each has to offer. What they are really selling is a combination of product, value, ambience (or not), and brand experience.

So, if you are starting a business, be sure you understand why anyone would buy from you. What needs does it fulfill? What benefits and differentiators will you bring to the table that will help you stand out from the crowd? This article offers tips on how you can develop and capitalize on these elements of value: Six Tips for Creating a Customer Experience that Embodies Your Unique Business Value

Don’t Become a Jack of All Trades, use Strategy to Focus

One of the pitfalls of not defining what you have to offer is that you can quickly become a jack of all trades and master of none and this can have a negative impact on business growth.

Think about it from the perspective of a consumer. How often do you see marketing flyers promoting the service of a local handy man who claims to be an expert in everything from drywall installation to plumbing repairs, and so on? Now, this handyman may get some business out of his efforts, but he’d win a lot more if he specialized in doing one or two things well, building a reputation for himself, and fine tuning his marketing message.  This is why you need a strategy: it will focus you.

Identify Your Niche

The flip side of being a jack of all trades is finding your niche and playing to your strengths within that niche.  Creating a niche for your business is essential to success. For example, say you want to quit your day job and become a freelance writer. You know there’s a need in the market for a trustworthy, reliable, and consistently good technical writer – and clients are willing to pay a certain price point for that quality and value.

Now you could simply advertise your services on an online freelance marketplace, as many do, and hope to pick up any business from any customer anywhere on the map. But by identifying your niche and choosing to attract customers who will value your services, you will quickly build on that niche and be on the path towards business success. 

Finding Your Target Customer

Identifying and finding your ideal target customer is a process few businesses can afford to get wrong. A few simple steps can help get you along the way and are covered here in this SBA guide: Identifying Your Target Market.

Tailor your Business Message to Your Market

Now that you’ve identified your target market you’ll need to craft a message that reaches and speaks to that market while reinforcing your brand identity. It should explain what you have to offer, why you’re different, and why anyone should buy from you. For tips on tailoring your message to your market, read: Stand Out from the Crowd - Seven Tips for Creating a Marketing Message that Sticks. The following blogs can also help you nurture and build your small business brand identity:

Useful Resources

About the Author:

Caron Beesley


Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the SBA.gov team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley


That's right? We ourselves run own business, so we must be clear about what we're aiming to do and which kinds of clients we target to. I find best advice from reading your article. Thanks for that!
I definitely agree with the great article above. Creating a nice market means identifying specific target more easier. We can get a lot of consumer and high income. However,sometimes we forget to improve high quality product which is very important for them.
Nice insights Caron. I'd like to point out a couple more thing about the "Finding Your Target Customer" part. In my experience those years i've seen many people / small businesses that they think that everyone is their target Customer. Some time ago i interviewed a prospect (who is now a client of mine) and asked him who his customer is. His business was related to swimming pools, but strangely enough, he couldn't understand that his product wasn't for anyone. Initially he told me that everyone is his target customer, but after i interviewed him, we both understood that his clients were people above 50's, they had a lot of money and their profession belonged in some of the following categories: -doctors -politicians -famous actors & persons of showbiz -industrialist etc Making a rough "persona" of your potential prospect will save you a lot of time and money in the end.
this handyman may get some business out of his efforts, but he’d win a lot more if he specialized in doing one or two things well and fine tuning his marketing message.
To succeed you need a clear research strategy and the amount of development before market research is very important. Extremely useful article!
I think some of your greatest tools are research and data. As long as you know how to correctly manipulate it to get the information you need for your business, it can help you determine who to target, where to target, and the needs of that market. Also, as you move forward with your marketing plans, the data taken from those items can tell you what areas are effective and which should be disgarded.
What about diversification? If you have a limited scope don;t you run the risk of the business drying up and then having no alternatives?
Main thing, Quality Service to your clients, this will bring more and more customers.Thanks for your time.
I agree 100% of the way that you need to be clear on what you offer, not being a jack of all trades. Specialize in a particular product. There are very good points on this page. Too many businesses try to offer many different products just to make money, rather than actually focusing on their main product.
Great information. Thanks for sharing this. But I do want to add that if you're in a service company and you're a small business, then you MUST, MUST always give quality service to your clients. This will help you in the long term.


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