Find Part One of the Staying In your Lane series, How picking a lane for your business helps you grow here.
Defining your niche can be a pretty scary process. It seems counterintuitive to commit to dealing with less people, and offering them “less stuff”. It’s a step that takes confidence.
If you’re still wondering why you need to do this, re-read Part One.
If you’re ready to go all in, here’s the first step – defining where you’re going to put your effort.
What do I love doing?
Think about what you love doing – whether it’s getting outdoors, cooking up a storm, heading overseas on holiday, or any other activity you’re passionate about. It’s pretty easy to get yourself excited whenever you’re doing something you love.
One of the keys to being successful in your niche is being passionate about it. It’s very difficult to be great at something that you don’t like doing – so focus on doing things you like.
When you’re thinking about what you love doing, it’s easy to worry about whether they translate to “success”. That’s not what we’re worried about at this stage, however – we’ll get to that in a second. Just focus on what you love doing.
Which things I love am I good at?
Now you’ve got your list of things that you’re passionate about, take some time to think about which of them you’re good at.
I love baseball, but there’s not much chance of me playing in the Major Leagues. I’ve never played an inning of baseball in my life!
Creating a business that combines something you love with something you’re good at is quality of life nirvana – and it’s not even that far-fetched. Even if you don’t have something that sticks out as a money maker at this point, you’ve probably got an idea you can put a spin on, and use to tell a story that is compelling enough to get people to engage with you.
Whether you’re working on a service offering that enables you to do what you love every day, or you’re finding a product to tell a story you’re passionate about, you now need to figure out what you’re selling.
What am I selling?
Cross what you love with what you’re good at and that’s what you’re selling – well, pretty much.
Odds are that the story you can tell about the intersection of these two areas is something you’ll be able to tell with a lot of passion – engaging your audience much more easily.
Hang on, you might say – how do I make money from this? You’ve got two options here – the hard route, which is developing a proposition from scratch and creating a new market, or the easy one, which is finding a product or service that’s already in the market and using your passion to present it in a new way, with a new story.
Either way can be rewarding, however each carries a different level of risk.
Once you’ve chosen a path, validate!! This is essential to the success of your business – and your sanity. Talk to some people who you think your story will resonate with, and pitch them your offer. Then, listen to the feedback, tweak the offer, improve your messaging – suddenly, you’re going to market with a bit of confidence, and way less hot air.
A word of warning – if validating and iterating your plan takes you down a path where you no longer feel passionate about what you’re doing: stop. It’s way easier to bail now than get stuck trying to make something you don’t enjoy work.
Where are the people?
We’ll talk more about people in the next part of the series, but when you’re defining your niche, you need to make sure that the niche is big enough.
Before you figure out where the people are, figure out how big an audience you need (not to make a million dollars, but to be commercially viable). You might be selling $100k consulting packages that are hugely involved time-wise, in which case you only need a couple of customers (and an audience of 20) to make your business worthwhile. Or you might be selling $100 BBQ products – in which case you need an audience of a few thousand to get the traction you need.
Then, define who they are – ask the following questions:
- What are my customer’s demographic characteristics?
- What are their goals?
- What are their values?
- What are their challenges and pain points?
- Why would they buy (from me)?
- Where are they getting your information?
Apart from the first item, all of the above are people questions – building a picture of what drives someone and how they behave, rather than a set of data points about their life.
It’s much easier to understand your market when you understand who they are instead of what they are.
Finally, use the last question to figure out where they get their information from – do they congregate on Facebook? LinkedIn? Or are they reading the message board at the local supermarket? This will give you an idea of where to go to get your story in front of them. You can also use the inbuilt analytics in most digital platforms to check that the audience size is big (or small) enough to meet your needs.
Where’s the money?
Last but not least – where’s the money? Cashflow is king, whether you’re just starting out or you’ve been in business for a while but are pivoting to something new.
Whatever you do, make sure you’re giving yourself the best chance to keep the money coming in the door (i.e. don’t go out and fire your old customers all at once). If you have to, keep dealing with some stuff you’ve been doing for a while – stick at it, the cashflow benefits are worth it.
Make sure you’re across how long it takes you to get paid, as well. It’s essential that you plan for this – and keep enough cash on hand to deal with it.
Now you should have a pretty good idea of where your niche is. Next up, we look at finding your 100 (or 10) great customers, and why they’re so important.