To define your niche means clearly identifying a group of people who need a product or service that you are able to provide. The best niches are those that no one else can fill or don’t fill adequately. If you have a product or service that is in high demand and you may not need a niche. But the more competitive the field you are in, the more important it is for you to find what you are uniquely qualified to do.
Your niche needs to be small enough that you don’t have a lot of competition and can reach most of your potential clients within the limits of your time and budget. And the niche needs to be large enough to provide sufficient customers to support your business.
Gold Leaf Printing, for example was in the printing industry, which is highly competitive. In fact, it was so competitive that to earn bids and clients, some competitors were willing to bid below cost just to attract new customers. One competitor told people to find the lowest price and they would beat it by 10%! Now how do you compete with that???
However, when I created a new company called Medi-Forms which specialized in medical printing, there was no competition! Sure, all the other printers in the area could print the same things we printed, but none could say that they specialized in medical printing and didn’t print anything else. (Yes, we printed other types of printing on the printing presses that we had, but all the other printing was printed by Gold Leaf Printing, not Medi-Forms!)
I formed a new company, registering it with the state and had loose leafs printed with Medi-Forms logo on the front and the most popular medial forms and printing inside. Our business cards were for Medi-Forms and stated that all we did was print forms for the medical industry! Since I and one other person performed the sales function, we both learned all we could about the medical industry and the forms they needed. When we visited a doctor’s office or hospital, we could talk in their language about their needs.
The other printers thought it was too much trouble to create a new company to specialize, so they didn’t fill the niche that Medi-Forms filled. Printing orders came flying in. And, to make it even better, we could charge a price that made a fair profit and when our competition gave pricing that was lower, our new customers still ordered from us because we “specialized”!