An updated formula for finding your niche

How do you identify a niche to start your business around or tighten your existing niche?

Use this updated 3-step framework I give my clients:

• 💡 The product/service you sell
• 👥 A target person or group of people
• 🤔 A problem they want solved and/or opportunity they want created

Here a few examples to show how it works:

• 💡 AI-powered resume builder for 👥 recent graduates 🤔 looking for their first tech job
• 💡 Subscription-based craft boxes for 👥 families with young children 🤔 looking for educational activities
• 💡 Recipe app for 👥 individuals with food allergies 🤔 looking for safe and delicious meal options
• 💡 Eco-friendly packaging solutions for 👥 small to medium-sized shipping companies 🤔 aiming to reduce their carbon footprint

Notice the "🤔 problem to be solved or opportunity to be created" is generally prefaced with a verb.

In choosing your niche, you can decide to niche by:

• Geography ("in the southern United States")
• Psychographics ("who value high personal achievement")
• Lifestyle ("for those living a minimalist lifestyle")
• Age or Life Stage ("for middle-aged professionals switching careers")
• Industry ("within the renewable energy sector")
• Business Focus ("that design small residential projects")
• Challenges ("for individuals with limited mobility")
• Opportunities ("that are transitioning to online sales")
• Interests ("for amateur astronomy enthusiasts")
• Culture ("for expatriates working in Southeast Asia")

Why is it important to narrowly niche?

Because it's far easier to box out the competition if you're only one of the few solutions that can adequately serve your target audience's specific wants and desires. 

For example, if you were launching a health-focused food product in Brazil, would you prefer a general marketing agency or one that specializes in the Brazilian health and wellness market (and which understands the nuances of the regulatory environment, local health trends, and consumer behavior)?

More than likely, the client would pick the specialized agency.

And from the agency’s perspective, the one that is niched in the Brazilian health and wellness market can charge higher prices, more easily attract clients and command greater customer loyalty. There simply aren't as many such specialized marketing agencies as ones with more general expertise, which allows the former more leverage to set commercial terms.

In addition, the more niched provider will be able to more easily cross-sell and up-sell, and enjoy increased market defensibility.