Business Startup Strategies | Small Business Loan Central

Going all out and trying to capture all market segments right in the beginning is not an effective strategy for start-ups. Smaller businesses should start by offering specialized goods and services targeted at a smaller demographic, which makes it attractive to that specific group of prospective buyers. So how do you go about creating your own little dedicated group of customers? Here are some things that you should try to keep in mind and implement.

1. First of all, realize that carving a niche does not necessarily mean that diversification goes out the window. By doing this, you would only be choking possible income streams at the start-up stage of the business, depriving yourself of much needed revenue. Try instead to combine several related interests into something that is unique and solves a particular problem. It's having focus and an overall goal that will make you more money long-term.

2. A good way to arrive at your niche is to sit down and write down your interests, your skills and your connections (friends, prospective customers, co-workers). Try to combine them and come up with a related, yet unsolved problem relevant to these people – if it works for them, it will work for the customers too. Something that you think you can and would enjoy solving. Usually, you can come up with more than one such problems that have been overlooked. You can then just pick your final direction from there.

3. Having a niche really means that you become the "to go" man or woman when someone thinks of a particular product or service. Think of a multi-faceted creative person who is a writer, photographer and graphics designer. That’s good, but separates him or her from all the other people with the same skills. According to statistics, they are exactly 1100 people in the world who have the exact same skills as you. How are you defining yourself? What’s your one skill that no one can come close to and how do you use it to solve unique problems? One you have your finger on that, word-of-mouth will take care of the rest.

4. Once you have established a niche and people start knowing your business by that, you will still get requests if you can do some "other work." You realize that having a niche does not bind you down from trying out new things. It is just an important from a marketing point of view. Keep exploring, keep penetrating new niches. No one said that a business can specialize in just one thing.

The above steps are provided just to give you an idea about the concept and maybe encourage you to dwell a little deeper. If you want to implement this for your business, and want to be systematic about it – you should begin by conducting a market survey to uncover untapped potential. Tabulate this information, complete with areas in which you know where your competitors are firmly situated; this will help you find an opening for your product or service. Arnoldo Hax, strategy professor from MIT Sloan, says that, "watch our competitors, but never follow them" and that we should "play a different game on the same field as the competition." He stresses that within marketplaces, conventional wisdom about the rules of competition build up and that over time, those rules become irrelevant to potential customers.