How many times have you heard about a new business idea and said to yourself, “I wish I’d thought of that!”? We’ve all been there. But business ideas don’t just spring up out of the blue. Most successful business concepts are a result of months (or years) of thorough market research, financial considerations, and fine-tuning the idea.
Today, when consumers have so many options at their fingertips, a generic business idea has little chance of survival. If you want to build a unique business, you need to narrow your focus and look for an underserved yet highly marketable niche. Many startup business owners start by creating a business plan.
Develop a Mission Statement
Part of developing a business plan is discovering your “why” and “how”. Creating a mission statement is a crucial part of a business plan and an essential step to finding your niche. A mission statement captures your life goals, philosophies, business objectives, and how you intend to offer customer solutions (all in three or four paragraphs—so be succinct). Ask yourself:
- Why do I want to start a business?
- Who are my customers?
- What’s important to me?
- What image do I want to project?
- What kind of work environment do I want to create?
- How will my idea be different from the competition?
- What value do I bring to my community?
Once you get a general mission statement down on paper, you can judge every business idea you have against the objectives you’ve made for yourself.
Be a Trend-spotter
I can’t emphasize enough the importance of keeping your eyes open to the world around you and read, read, read. To spot trends, you need to be attuned to what’s going on in the current marketplace so that you can see any coming changes. If you’re unsure where to start, pick a few industries you’re interested in and do a deep dive into how those markets are doing. Are new businesses popping up, or are existing companies struggling? Learn about changing demographics in the area, the region, or the country at Census.gov, sign up for industry newsletters, and do a trademark search to see what ideas are out there. Any of these resources could spark a new business idea.
Define the Market Need
A successful business idea addresses a need in the market. To find your niche, you need to find “the hole in the market and fill it.” Is there a need for products or services that don’t yet exist? That doesn’t mean you need to reinvent the wheel. The idea might exist somewhere else, but not in the location you’re considering. For instance, think about daycare. Not a new concept by any means. However, if you find an emerging new community that’s appealing to young families, daycare is likely to be in high demand.
Or if the idea you’re considering does exist in that area, is there a way you can improve on the concept? Think about daycare again. Most operate five days a week from 7 a.m. to 6 p.m. A daycare that is open six or seven days a week with extended hours could appeal to many young families that work flex schedules.
Refining your business idea involves knowing what specific need your product or service fulfills, what features of the product or service provide a solution, and how that solution is different from any competitors.
Define a Target Customer
In addition to recognizing profitable target markets, you need to identify your ideal customer. Creating a buyer persona can help you focus on finding the right business to reach that consumer. A buyer persona is a fictional depiction of your ideal customers based on your research.
Consider asking the following questions when you think about each persona:
- How old is this customer?
- Where do they live?
- What are their likes and dislikes?
- Where do they shop?
- Where do they work, and what do they do on their time off?
- How much money do they make?
Or you can approach it by their needs:
- What do they struggle with?
- What are their concerns?
- How could their day be better?
- What could I offer that would solve their problems?
You get the idea. Part of finding the right niche is understanding precisely what your customer wants and expects from a business like yours. Unlike huge organizations trying to be all things to all people, a small business’s advantage is being able to personalize its offerings to appeal to its potential customer base.
Find Your Unique Selling Proposition
Part of that personalization is defining your unique selling proposition (USP). It’s what makes it different from any competition. First, consider the potential competitors—how will your business stand apart from theirs? What benefits will you offer that will convince consumers to do business with you?
Once you decide on a business concept and start carving out your niche, it will be easier to define your USP.
Evaluate Your Idea
At this point, you should have some idea of the business you want to start and the niche you will target. Here’s a checklist to make sure you’re on the right track:
- List the benefits and advantages of your idea.
- Pinpoint the exact problems/challenges your idea will solve.
- Identify any constraints you might encounter, such as money, liabilities, etc.
- Is there a clear need for your business? Is there any competition? If there isn’t a need today, do changing demographics indicate a market will develop soon?
- Create a Plan B. Are there variations of the idea that can appeal to a different or additional market or adjust to changing times (for instance, selling products online rather than in a storefront)?
Ready to define your niche and turn your idea into an actual business? Let CorpNet help you reserve a business name and pick the best business structure for your business.