Define your Business Niche Part II
Last week’s blog discussed the value of a business niche, and why it is important to define your business to focus your efforts. But, how do you go about actually determining what niche market is the best for you? Well again, Allan Dib comes to the rescue with the 1-page marketing plans’ P.V.P Index.
Start by writing down the different niches that you came up with on a piece of paper then you will need to grade those niches to assist in your decision making. On a scale of 1-10 with 1 being the lowest and 10 being the highest in 3 categories. This method allows you to take a methodical and measurable approach.
This is just what it sounds like, how much fulfillment do you and your staff (if applicable) get from working with this specific niche? If a niche is extremely profitable, but you don’t enjoy working in that niche then the monetary value may not overcome the lack of fulfillment. Write down the score for each of your potential niches in this category.
Value to the Market Place:
To further define your business, you need to determine the value of each niche to the marketplace. Depending on the focus of your niche, the market place may be geographically limited, or you may need to look at the market regardless of location. Is this an underserved niche that you can add immense value? Is your product novel for this business niche, or is it a cookie cutter? Do your best to evaluate honestly and write down the score for each.
You are in business to make money, correct? If not, then the rest of this blog post and most of our posts won’t be much of a benefit to you. If you happen to not have the profitability numbers broken down, you may need to do some math. Because these are niches you will need to account for, percentage of profit not necessarily total profit earned from each. These numbers should be black and white so the scale you use should be much easier than the other steps involved that were needed to define your business.
Family Photos: P = 8 V= 6 P=6 (Total = 20/3 =6.67 Average)
Wedding Photos: P= 10 V=7 P=6 (Total = 23/3 = 7.67 Average)
Corporate Photos: P = 6 V= 10 P=10 (Total = 8.67 Average)
In the example above, you can see that despite having the lowest personal value the overall rating of corporate photos was the highest by more than a point. This may or may not be enough for an individual to be willing to focus on the least personally fulling niche, but it may be just the clarification this photographer needs. Now that you have been able to define your business niche, next week in part III we will cover some of the final considerations before you go full steam ahead.