Tuesday, April 28, 2009

Niche is nice

It seems that in times of economic downturns, there are lots of people who become "consultants". Some are serious. Some are just looking for some income until they find a new full time job at a company. Most won't make it.

A friend who has been working for a while in marketing communications approached me, and she said she plans to become a consultant. We talked about her business idea and how to go about starting a business (including my strong recommendation to get a book that describes the basics of starting a business (link to blog post)). One area that made me feel better about her business idea is that she does have a niche (link to Wikipedia definition of niche) she will target. Not just that she wants to focus on e-marketing, which I don't think is a tight enough niche by itself(lots of these new consultants say they do e-marketing). But she has a specific business idea where she knows potential customers have pain, is in an area she has expertise with, and even has contacts at potential clients who she can contact that she thinks her system would improve their lives.

As I've talked about before (link to blog post), one common problem with people who start a new business is they want to sell to anyone who could possibly use their business. Unfortunately, this is not a focus. You just don't have the resources to do this effectively. Instead, it is much better to "pick the low hanging fruit".

Another company I work with is a local bicycle retailer (link to store's web site). The owner is a friend of mine, and I helped him a lot when he opened the shop (including investing in the shop, so I am actually a part owner and on the board of directors). I saw right from the start that he has a very targeted niche - high end mountain bikes used for "all-mountain" style riding. Yes, he gives up potential sales of children's bikes, road bikes, commuter bikes, etc. But he is doing well with this very tight focus. His customers would often drive 30 minutes to come to his shop, passing over a dozen other bicycle shops on the way to see him. His shop filled a need that other shops didn't.

Of course, there is no guarantees for my friend and her new consulting business, but I feel much better about her idea than I do about many others of the new consultants that are out there.


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