Know Your Market - 2

So, now you think you know what sort of industry you want to pursue, and you have some ideas for niche markets within that industry that both suit your interests and seem profitable.

Now, it’s time to bring out the big guns. You need to be “in the know” about the industry you are pursuing, the niche market you at which you are aiming, and the advances within that industry. After all, every marketplace changes all the time, and you have to keep abreast of the changes to maintain your advantage and profitability.

LEARN ABOUT THE INDUSTRY

Knowledge is power, regardless of the topic of discussion. When you start a business of any kind, you have to know more than just the ins and outs of your product or service as you see it. You must also know what the customer expects, what other companies in the market offer, and what is involved in becoming part of that niche market you intend to corner.

There are several steps you can take to become an expert on your topic, but the most important aspects of learning your industry and your niche market are research and knowledge of current events and conditions.

RESEARCH, RESEARCH, RESEARCH

The basic problem with conducting research is that most people aren’t sure where to begin. In business, industries, and marketing, it can be even more difficult than ever to grasp the concept of research because it seems that all you really need to know is how much everyone else is making from similar business ventures. However, this is a completely inaccurate assumption

As with research for all things, you must start at the beginning. In researching a particular industry to determine profitability and success of a niche market, starting at the beginning entails researching the history of the industry.

Where did it begin?

How has the industry evolved over time?

How has the industry been divided thus far, and what sorts of niches already exist? Who are the key players in the industry at this time, and where do the holes in the market seem to exist for new and innovative niches?

All of these questions can be answered through thorough research and careful searches. Look to the Internet, as well as publications and periodicals in the library for information.

What niches could you consider?

Once you’ve learned about the past of your intended industry, you can begin to make your determinations regarding the possibilities for the niche into which you can fit your business. How do you know your options? Consider examples from other industries. Think about the pet industry.

Obviously, there are various niches in both product categories and services. You can choose to zero in on a particular species – dogs, cats, birds, fish, etc. Then, (let’s say you choose cats as your interest) you can narrow down your offerings based on whether you are going to sell products geared toward cats or provide services related to cats.

Perhaps through your research you find that there is a need in your area for a cat-sitter. You found that there are hundreds of cat owners within a few blocks of your house, and many of them have problems traveling because they have no one to care for their cats while they are away.

You decide that one possible niche for your business is the cat-sitting business – offering to feed the cats, clean out litter boxes, and perform other necessary chores for the cats while owners are away – all for a nominal fee.

Of course, maybe you would rather work with dogs. Another possible niche for your pet business might be daycare for dogs. A lot of pet owners think of their dogs as more than pets and don’t want to leave them home alone all day.

Your business could therefore be allowing owners to drop off their beloved canine friends at your location, where there is human interaction throughout the day, someone to walk and feed them, and other dogs with which to socialize.

Remember as well, that when choosing a niche market, you can actually include the target audience as part of your niche. For example, most theme parks are geared towards family or children, but what if someone was to specialize a theme park for senior citizens or disabled individuals?

That would certainly be a niche within the theme park industry. In the same fashion, you could take an idea that is typically geared toward a particular audience and alter it to meet the desires of a different target market

Whatever industry you’ve set your sights on, you must consider more than one option that you think could make you happy and fit nicely into a niche market. Remember, the industry itself is most likely a very broad area, and you can’t expect your business to do well if you try to cover the entire spectrum of opportunity.

Therefore, choosing a specific niche market for your Internet business requires narrowing down the target audience, and before you can make a firm decision as to which of the action items on your list will be the best choice, you should also consider the likelihood of profitability.

Where is the cash flow now?

You are staring at your list of niche market options, and in the example above regarding pets, it may look something like this:

 Cat-sitting
 Doggie daycare
 Custom fish tank design
 Pet vitamins
 Custom rodent runs

Now, it’s time to consider in which area of the market you’ll currently find other businesses profiting most consistently. Of course, this requires more research. This time, however, you have narrowed down the information for which you intend to search, and you will be looking at a different set of statistics.

Now, instead of researching the past, you are looking at current events and trends in the market to see what area of an industry is most profitable. This is determined mainly from staying abreast of the latest in news and technology, which will be discussed later in the chapter.

Factors to consider when looking into the niche that is most likely to bring in a constant cash flow include demographics (for example, if there are a relatively small number of pet owners in your neighborhood, cat-sitting will not be very profitable), competition (if there are six other dog daycare centers within a 10-mile radius, you may not find success at this venture), and overall value (remember, people have to be willing to pay what you intend to charge for your goods or services). These considerations may help you further narrow down your list of possible niches.

What are my odds at success?

Determining your odds for success is a little harder than deciding into which niche your business fits. The reason that so many businesses fail is that owners and creators, especially of Internet businesses, don’t think about the future. They are more concerned with the here and now.

However, just like it was important to acquaint yourself with the history of your industry, it is vital to be prepared for the future of your business.

Your odds at success rest on several things, only some of which are within your control. For example, if you are selling a product, you must be prepared to invest with little return. Including working capital funds in your business plan is a must if you are going to succeed because no Internet startup business is going to take off overnight. If you plan ahead, you have a better chance at enjoying success.

Choosing a very specific industry can also help your odds by narrowing down the competition, though opting for too small a market share could make success difficult.

While market trends and customer interests are beyond your control, being versatile so that you can address changing desires will aid you in making a success of your Internet business. The trick to maintaining an evolving business niche is to keep informed of the latest trends.

KNOW THE LATEST IN NEWS AND TECHNOLOGY

If you lived in a country that was in the middle of a war, and the battle zone was moving closer and closer to your neighborhood, you would probably spend a lot of time following the evening news and reading newspapers.

You’d be concerned with the latest occurrences in the actual fighting, and you’d probably want to know about the technology being used – how far away can a specific weapon target your home or neighborhood? Are you still safe, or is it time to move underground?

Taking care of your Internet business, especially as you are just starting up, could be considered a war, and it is pertinent to your success that you are aware of and fully informed about the latest news and technology both in your overall industry AND in your particular choice niche. Much like an army, if you lack the equipment, knowledge, and skills to best your competition, you are going to lose.

KEEP UP WITH THE JONES’S

No one is saying that you have to take part in covert operations to find out what your proposed competition has up its sleeve. However, taking note of competitor websites, especially updates and new offers listed, can help you to keep up with what’s new on the front lines of the war zone.

There are other sources, as well, that can help you keep track of your industry in the news and on the technological front, including impact on the niche you’ve decided on.

The Stock Market

The Stock Market is an incredible tool for tracking the overall success and interest in a particular niche market. Keep track of businesses that offer supplies for your industry, as well as those that have a niche or marketplace similar to the one in which you are interested.

Let’s return to our earlier example regarding the pet industry and say that you’ve tentatively decided to market a brand of pet vitamins on a website. To find out just how lucrative this business could be for you, you can target the value of stock in companies that produce various medications and treatments for animals.

Research veterinary pharmaceutical companies, and keep track of their share trends on the stock market to see how steady and secure the industry is before jumping right in. At the same time, try following other pet-related business trends on the market to see if there may be a better niche for your business.

Online Sales Trends

If you are intending to start a website selling a product or service, there is no better way to keep tabs on the industry than to track online sales trends. Know what the competition is selling, how they are marketing their product or service, and how much it costs.

Also, make sure you find out just how profitable that business is. There are ways to find any company’s reported earnings for a particular fiscal period (usually both quarterly and yearly), and this information can tell you exactly what you can expect should you enter the industry in a similar niche

Trends in the Industry

Look beyond the here and now. Use the knowledge you’ve gained from all your research, including your digging into the past and your knowledge of current trends, to determine where the industry is headed in the future. Cellular phones are some of the best examples of ever-progressive technology.

First, there was a way to reach anyone, anywhere, so everyone went out to buy the huge, clunky cell phones. Then, in no time, there were tiny little flip phones that everyone wanted. From there, the advancement of the industry exploded, with everything from cameras and games to wireless internet services and PDA capabilities right in your cell phone.

Don’t be in too big of a rush for the latest and greatest product to offer – know that there is always going to be an industry standard, as well as those pushing the envelope, and this will create an ever-advancing marketplace. By staying abreast of this information, you can at least be prepared and stay in the lead by updating your niche offering with the rest of the industry (and hopefully before the competition!).

KNOW ENOUGH TO PROVIDE CONTENT

Have you ever looked up a website and seen something that leaves you unfulfilled? Often, this is because of a lack of content, which causes the website to appear empty.

In fact, many sites that are not virtually blank are populated with simple pictures and useless content that is unrelated to the specific product sold or service rendered. How can your customers rest assured that you have the knowledge necessary to provide excellent services or quality products and support if you cannot show them right on your site that you contain such knowledge?

It is vital to know enough about your industry and your niche market to provide quality content on your website. It is essential to include details and important facts on your site that convey a sense of your expertise in your niche marketplace. Without such, you cannot gain loyalty or trust from your clients and will not have great success.

THE CURSE OF AN EMPTY SITE

There are many ways in which your website can appear to be empty. Any of these can be detrimental to your success and the attraction of your site to customers. While a site that is “under construction” at least offers hope upon return, one with insufficient information will not inspire returning customers to look for future updates

Lack of Information

Lack of information is probably the top reason that websites are untrustworthy to customers. You can be an expert in your field and have the greatest idea for pursuit of a niche market in a particular industry, but if you don’t include enough information on your website to convey your knowledge to the customers, they will be leery of purchasing any goods or services you have to offer.

On the other hand, a site that delves into the topics at hand, providing not only information on the item or service for sale but also on the industry, the trends in your niche marketplace, and other information that is important to readers as well as to your success as a businessperson, is much more credible.

Lack of Graphics or Pictures

While it’s not necessary to get “picture happy”, graphics and pictures serve an important purpose on a website. The content is what’s most important, but if you have pages upon pages of text with nothing to break it up or illustrate a point, it is as much of an eyesore as an empty website.

Also, pictures and graphics serve to enhance your description of goods and services. A picture should illustrate anything you are selling, whether it is a service or simply a photograph of a product that you are selling. People by nature are visually stimulated and, though you could describe a product with words for pages, nothing speaks as loudly as a picture.