Thursday, May 28, 2009

Is your niche too small?

In the past I have discussed the importance of having a niche. A niche is the segment of the market that your business focuses on and sets your business apart from the competition. While it is important to have a niche market that separates you from competitors, you also need to avoid the problem of having too small of a niche.

Recently I saw a note from someone I knew that is having problems with cash flow now because their niche in the market is too small to pay the bills. Now they are expanding into other areas in order to put food on the table.

It is very important when you are doing your marketing plan that you conservatively estimate the size of your market. If you estimate too low and your market is much bigger, so much the better. However, if you estimate too high and there isn't enough market to support your niche, you will not be in business for very long.

In other words, do not look through rose colored glasses when you are doing your marketing plan. Be realistic about the potential of your marketing and be conservative. This also points out how important it is to have that business plan and to keep it updated on a regular basis.

Remember you have plenty of resources to figure out what the market is for your niche so be sure to make the most of them.

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