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Often one of the most effective strategies for a small business is to think small and target a market niche. Here are six reasons that niche marketing can be a winning strategy for small businesses.
More Productive Financially
While targeting a large market may be tempting, given the revenue potential from penetrating even a tiny fraction of an enormous market, it simply may not be feasible financially. If your small business, like most, has limited funds, you may need to narrow your target market in order to use your cash most productively. Among other things, your marketing dollars may go much further in a niche market.
Easier to Stand Out
Being a big fish in a small pond can be a great way to stand out from the crowd of small businesses, to establish your firm's reputation as a company on the rise, and to create a solid base of customers, revenue and cash flow from which to grow. Also, it is easier to become known as an expert in a niche market.
Greater Growth Potential
By identifying a niche for your business, you may be able to focus on a less mature market segment with greater potential for rapid growth than a more established market. This can be especially advantageous if your small business is just starting out, since it may be able to gobble up market share more quickly in a niche market than it would otherwise.
Competition may be less intense in a niche market, and less competition may give your business an opening to grow more rapidly than would be possible in a larger market. One caution on this score-while limited competition in a niche market can be a plus, no competition could be a warning sign unless you have developed a new product or service that is so unique your business will actually be creating a new niche market. If that isn't the case, do some in-depth market research before entering an untapped market, since the lack of competitors may indicate that the niche is too small to support a business.
More Media Attention
You may find it easier to get media attention for a niche business. Of course, there is no guarantee of this, but if your product or service is unique or your niche is unusual or interesting, you may find that business reporters, who are always looking for something new to write about, will be happy to give you coverage. Having said that, don't expect them to come to you, but be proactive in letting your local media know about your niche business.
Platform for Future Growth
Future growth doesn't have to be impeded by initially targeting a niche market. In fact, your business may be able to use lessons learned in building a successful niche business to successfully expand into new markets over time.
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