How to Choose Which Niche Your Small Business Should Target

To choose a business niche, explore the world the way your customers see it

Some hotels cater to travelers with kids, while others focus on allowing pets or creating meals that satisfy people who must eat gluten-free diets. Choosing a niche is smart business practice; it allows you to position your business as a leader in a specific market and help your small business compete on a global scale. However, deciding on the niche can be tricky. Here are a few tips to help.

1. See the world as your customer does. In other words, slip into your customers? shoes. Ask the following questions:

  • When my target client searches online, what keywords are used?
  • What problems does my target client most need solved?

For example, say your business is a restaurant, and you know that more and more customers have dietary restrictions. Perhaps a loved one of yours has Celiac disease, and you?ve heard about her struggle to find suitable dining establishments. Your target customer might search for something like: ?restaurants in X city for Celiac disease.?

You could choose to specialize in dishes that are delicious for everyone, and just as importantly, perfectly safe for people with Celiac disease.

2. Tap into resources to help you figure out how your customers see the world. In the example above, you already had a relative with Celiac disease to jump start the process. But what if you don?t know where to begin?

Write a list of common challenges facing your customers. In a restaurant business, they could include affordability, time, specific dietary limitations and much more. Talk with your customers to find out what they want, and read about other restaurant niches.

3. Think about natural links. For example, an accountant who works from home could choose to target restaurants as her clients because they?re the most plentiful type of business in the 5-mile radius surrounding her home.

4. Make sure that a need exists within the niche for your product or service. Market properly to the niche, personalizing your services as much as possible.