Month: October 2019

Opportunity Recognition

While opportunity recognition is instrumental to starting a successful business, it can be utilized in every aspect of business. Looking to expand your market? Observe what competitors are lacking and consider incorporating it into your own business. Wanting to reach new customers? Consider what platform your target customer is most likely to use. After all, if you’re selling hearing aids, the radio probably won’t be the best choice.

Now, many business workshops or blogs will have you write a list of your interests or hobbies. And yes, having a passion for your business is instrumental in making it a success. However, not every idea will work in your community. Even if you are the most passionate baker, if there are four other bakeries on the street, you will be starting with a great disadvantage. Instead, find an idea that matches an interest with a community need. This is how you harness the power of opportunity recognition.

I’m going to leave you with a challenge. Take a look around you, around your neighborhood, your city. Look and consider what is there and what should be there. Maybe there are many dog owners but no dog parks, or cyclists with no bike lanes. What is a real need in your community? It’s this type of thinking that is the foundation for having an entrepreneurial mindset.

How to Define Your Niche Market

A niche market is a specific, targetable demographic within a broad market. You can have a niche defined by age, location, budget, religion, or any other factor you can imagine. For instance, if you’re a painter you could specialize in industrial buildings or homes and market towards new construction or remodels. While defining your niche does limit your target audience, it does so in a productive way that will maximize your marketing budget by only marketing to consumers that are likely to need your services or products. If you sell pet supplies, “all pet owners” would be a target market that many would pursue. However, what if someone with a potbelly pig comes to your store and you do not carry any products for pigs? This is why niche marketing is so important. A better market may be “dog and cat owners”.

While it can be hard in rural areas to move away from the “something for everyone” mentality, with a new business it is crucial to capitalize on your unique offerings to the area. Too much inventory or too many services will tie up all your finances. If you try to market to everyone, you will have to carry products and have equipment for services that may only be purchased very rarely. With a well-defined niche market, you can be guaranteed that every customer will purchase one of only a few products or services that you have to keep stocked and ready, making inventory or service preparation a simple task.

How do we narrow down a broad market to a niche? Begin by looking at the products or services you offer. What are your strong suits, and where are you lacking? What makes your business valuable? Most importantly, what area of your business do you have a passion for? What makes customers choose small businesses over large chains is the individualism and sincerity. When you have a passion for what you do, that excitement and confidence will be clear to your customers. If there are many businesses in the same market as you, look for an overlooked niche you fill. Maybe you run an auto repair shop, and your competitors don’t work on motorcycles. If you look closely enough, there are always demographics that are ignored.

Learn from your existing customer base! Your customers chose to patron your business for a reason. Look at what your customers value about your products or services and focus in on that. It’s okay to reduce your amount of services or products to define your niche. As you gain a firm grasp on your niche market, you can expand back out into related products once again. Consolidation does not mean you are confined to that narrow niche forever, it is merely a strategy to grow your business with limited risks.

I encourage you today to consider what your business could gain by focusing on niche marketing. Think of what demographics are overlooked in your industry. Do you have a service or product they need? You may be surprised by how many consumers are just waiting to be acknowledged.

Appealing to Investors

Prepare Your Finances.

The most crucial aspect of your pitch is the financial viability of your business. You are asking investors to place their faith in you, and they want to know their time and investment will be worthwhile. Before you even begin looking at prospective investors, prepare your finances. Limit all unnecessary spending and maximize your profit margin as much as possible. Make sure all your numbers add up and taxes have been handled. Show them their faith will be well placed.

Have a Well-Defined Niche Market.

Investors want to be assured your business is sustainable. Explaining the niche you fill and the advantages you have compared to your competitors will show your worth and business viability. This is also a great opportunity to explain your methods for continued growth.

Have a Great Team.

Your business is your baby, and it takes a village to raise a child. No business can be sustained and grown by just one individual. Having a great team with diverse skills and abundant knowledge is invaluable, to you and to investors.

Have an Optimistic Growth Plan.

Investors have to know they are going to get a return. Having a detailed strategy of how you plan to grow and expand your business is key. Be optimistic and enthusiastic, but be realistic as well. If your goal is 200% growth in 3 years, investors will disregard you immediately. Have an obtainable goal and many strategies to meet that goal outlined.

Be Honest About Where You See the Business Going.

Even after you have secured an investor, honesty is key. In your pitch be truthful about where you want your business to go. If you’re wanting to get off the bandwagon in 5 years, this is something you need to make clear to investors.

Be Passionate.

Many investors focus just as much on the person as the business. If you’re passionate about your business it shows them that you are committed to making it succeed. They are investing in you. No one knows your business as well as you do. Make sure you know every in and out so you can confidently answer any questions an investor might ask. Relax and know what you want to say. Practice your pitch. Nothing will put up a barrier as quickly as reading your speech. Just speak from the heart.

Be Patient.

Finally, remember that not every investor will be looking to invest in your industry. Obtaining funding can be hit and miss, but don’t let the rejections slow your momentum. From each dismissal learn what you can alter to be more appealing to the next investor.

Searching for investors can be stressful, but if you make sure to be prepared and patient, the process will go smoothly. Keep in mind that a rejection is not a reflection on you or your business, but is just a motivator to become better. The best of luck to you!

Scroll to Top