You’ve most likely heard of the term niche market before. Often business owners are asked specifically what theirs is by business advisors, accountants, financiers and other owners. What we’ve found though, is that there is a reasonable amount of owners who still haven’t identified their own, or have little understanding of what the term means.

Let’s give you an example. Jess runs her own business selling handmade baby clothing. From merino baby coats through to cloth nappies and baby bibs, it is certain she is working within the baby clothing market However, this is a wide market with many variables, and what she should be focusing on is one specific aspect of that niche market. This will narrow her focus within the baby market, but allow her to specifically tailor her marketing, manufacturing and messages specifically to her target audience.

To help you find and dominate within your niche market, we’ve put together this handy article.

What is a Niche Market?

A niche market is a small specific part of a larger market. It is a gap in the competition, something that no one else is targeting or can target as you can. Your USP or unique selling point targets a highly refined customer audience, and this forms a big part of how you find your niche market. For instance, your target audience will need to have either a large potential for growth as well as a significant amount of market potential.

Like most businesses, the chosen niche tends to be a passion of the owner of the business. They often have an interest in a specific industry or experience within it. For instance, a person has always enjoyed gardening. A sudden redundancy has allowed them the opportunity to start up their own business and they’ve chosen to focus upon the plant industry. They are tending to lean towards the growing of plants from seeds rather than opening up a nursery, on-selling to retailers and not the general public.

How to Find Your Niche Market

You’ll already have identified the broad market you want to target, be it women’s shoes or gift baskets. What you need to do is narrow this down further using five key points:

  • Price – will the product be low or high priced? Does it need to be regularly discounted?
  • Quality – will it be a handmade product, mass-produced, premium or economical?
  • Location – will the product be marketed in a certain country or city?
  • Demographics – what is the age, income level, education and gender of the target market?
  • Values – what morals, values, attitudes and interests does the target audience have?

In the case of Jess and her handmade baby clothing, she used the five key considerations above and further narrowed down her niche to merino baby booties. She will now have the clarification she needs regarding her niche to be successful:

  • Price – mid to high priced booties, no discounts.
  • Quality – handmade in small batches.
  • Location – New Zealand wide, mainly in large cities
  • Demographics – tertiary educated, double-income families, female
  • Values – like artisan products, limited editions and one of a kind products

From here, Jess can take this information to adapt the content on her website, where she advertises, the social media platforms she targets, as well as the manufacturing and pricing of her products.

Then next comes the creation of a business niche or niche strategy to help your business take over the world or your specific target market that is. As well as identifying your target market and the unique selling proposition you can provide, you’ll need to research and understand your target audience intimately, create a business plan and start marketing to them. This moves us on to the world, or rather niche domination.

How to Be Successful Within Your Niche Market

Having identified your niche market, then now is the time to put all of your hard work into play. Of course, if you have not been thorough enough, now is also the time you’ll find out and may need to head back to the niche identification stage.

Assuming everything is all good with your work though, you’ll be able to start marketing within your identified niche. You’ll already have an advantage that the big players don’t have, and that is a highly targeted audience. It is to them that you will consider when making every decision you now come to. This means you’ll need to:

  • Identify the best ways to communicate with your market. Do they want face to face contact, or would they prefer using social media or emails?
  • Instigate a solid communication strategy with your target audience. Trial and error, surveys, questions and asking for feedback will help you identify what works best. Then once you’ve nailed it, it is important to set a regular schedule for communication with them and let them know what it is.
  • Offer products which you know your target market will want. Remember you want to be highly specific here. You can’t provide the enormous selection the big players can, but you can be very narrow in your offerings to your great advantage. Customers who want exactly what it is you are selling will want to deal with you because they can get what they want when they want it.
  • Keep growing and seeking advice. No business is an island onto itself. Asking for support from a business advisor can help keep you on the right path, solve issues as they arise or help hold you accountable for following your business plan.
  • Be a real person. This means making a personal connection with your audience, moving away from being a faceless name and instead be someone they can relate to.
  • Be accessible. Provide exceptional customer service, tailoring the ways you do things to meet the needs of your audience. Take the time to ask for and respond to feedback, as well as utilising the optimal communication channels.
  • Market your business. Having an excellent understanding of your target market, you’ll be able to run the most effective advertisements in the right locations for best uptake. Make sure you can keep an ROI for all marketing promotions you undertake, as these will ensure your money is always well spent.

Finally, being successful within your niche means sticking to it! It can be tempting to add another product or advertise to a different audience because of hearsay or a special offer being promoted. That’s why it is vital you have an in-depth business plan in place which clearly identifies what you are selling, who you are targeting and where you will be selling.

For advice on finding and succeeding within your market niche, we can help. Get in touch and make a time to chat with one of our business advisory team and let’s get busy.

Before you go down the path of seeking capital from outside your business or borrowing funds, identify any other ways of raising capital. If you need funds then sometimes it’s not a loan that you need.

Identify areas in the business to make savings

There’s a good chance that you can generate at least some of the capital you need by using business savings. If you can generate the cash internally, it’s often a better option that increasing your debt or taking investors on board. Look at how much you’ve got available in cash reserves or what contracts or payments are due.

Then look at ways you can make savings and increase your cash flow, such as selling equipment you don’t use very often (and leasing it when you do need it), cutting down on travel expenses, moving some staff from full-time to part-time roles, re-negotiating deals with suppliers for better credit terms and reducing your own salary.

It’s also important to chase up any late payers. Make sure you have robust systems in place for handling debt and collecting what you’re owed.

You’ll be surprised at how much all these savings can add up, generating more cash in the business that can be used to reinvest in business growth.

Shorten Cash Cycles

Shortening your cash cycle will increase your cash reserves, keeping your business going and providing a buffer in times of financial uncertainty. The longer your business goes without cash, the longer it takes you to pay your creditors, and the riskier your business becomes. Encourage your customers to pay using online and mobile payment options – the cash is then in your account immediately. If you have to invoice, do it immediately and incentivise your customers to pay early, such as offering discounts. You can also shorten your credit terms.

Focus Your Attention on Sales

Increasing sales is one of the best ways to improve profitability and bring more cash into the business. There are a number of different ways you can improve your sales numbers, such as making sure you and your staff are all trained in how to cross-sell and up-sell, investigating new distribution channels like an online store, implementing a professional sales system so that you can track customer buying behaviour and predict their needs, or even look into franchising your business if demand warrants it.

It’s important to remember the 80/20 rule: 80% of your sales will come from 20% of your customers, so look into ways you can sell more to your existing customers while still trying to gain new customers through your marketing strategies.

It’s always worth considering a price increase too. There are ways to increase your prices without losing sales, and it’s something that should be done now and again, even if it’s just to keep up with inflation.

Alternatives to Capital

Before you jump into researching the different sources of capital that are available, first consider the alternatives. It could be that, depending on what your growth goals are, you don’t actually need extra capital, you just need to be thinking a bit more creatively.

Raising Capital to Grow Sales

If your main goal is to increase sales, you don’t always need extra cash to be able to do this. There are other options that can help your sales numbers and it’s worth looking into them before you go borrowing money.

Strategic alliances are often worth checking out. Business owners are increasingly discovering the advantages of joint ventures and strategic alliances and many experts see strategic alliances as one of the best paths to rapid growth. There are many ways in which you can work with other businesses or people, ranging from short-term joint ventures to more formal long-term commitments. You can form strategic alliances with suppliers, with customers or with complementary businesses or with non-profit organisations such as charities. Think of how often you see a Subway attached to a service station.

It might also be worth looking at updating your business model. A change in your business model might help you find new opportunities for growth to increase your business’s revenue. Direct selling is the shortest route between your business and its customers. It involves buying directly from you without any go-between. It’s probably the simplest and certainly the most direct business model.

Like many businesses, you might currently sell some items through the web but is it time to make a bigger investment in the online world? Global e-commerce is rising daily and the opportunities for growth are significant.

Whether you want your goods distributed widely through wholesalers or via carefully selected retailers, the tweaks you can make to your distribution channels are almost limitless. If you’re a retailer, you might consider also selling at the wholesale level, and vice versa.

Raising Capital to Expand

Your goals may be more focused on expanding your business and you’re considering how to increase your capital to do this. Before you borrow the funds you need, consider other ways of achieving expansion.

For example, look into leasing equipment instead of buying it. If you want to boost your capacity so you can handle more orders, that doesn’t necessarily mean you have to fork out for the additional equipment you’ll need – you can lease it. The monthly lease payments are often less than what loan repayments would be. You can also lease equipment only when you need it, rather than having it sitting around gathering dust and being unproductive when you don’t.

It’s also worth looking into contracting out some work, especially for large projects. Contractors will often have all the resources they need to handle work, and when you bring them on board you’re getting access to those resources.

You could also consider forming partnerships to jointly produce your goods. For example, if you manufacture coffee tables, you might align your business with one of your suppliers, making it cheaper to get the raw materials you need.

Talk Through Your Options for Raising Capital

There is a lot to consider when looking at raising capital. To talk through all your options, get in touch with an MBP Business Partner. You can book in a free 30 minute chat with us HERE.

Bootstrapping is figuring out how to reduce the cash you need to start or run your business, by eliminating any unnecessary overheads while finding out who will give you a hand.

If for whatever reason you’re not able to raise enough capital to start-up you might be able to get what you need by ‘bootstrapping’ (finding what you need through unconventional or low-cost methods).

Some Options to Consider When Bootstrapping

Can others lend you what you need?

You don’t have to purchase new equipment to start your business. Think about what items you might be able to borrow over the short term or do without until the business grows.

Draw up a list of your asset needs and make a determined effort to borrow from others what you can while searching online for second-hand items that will save your business money. Are there people you know that are already in business who could lend you what you need?

Call in favours

Time to talk to friends, other business owners’ and family to see which assets, time or money they can help with. It’s a common bootstrapping technique to save money and chances are there is more help out there than you realise.

Reduce your set up costs and overheads

Look at the bare minimum you’ll need for your own living expenses and cut your salary or work for no pay for a time. It’s quite common for business founders to put in this unpaid ‘sweat’ equity to start with.

Look around your home and decide what you can sell to raise the cash you need. If your business is that important to you then sell everything you can.

Harness free

Search online for what’s happening in your industry to see if there is any specific support in your industry.

Find willing volunteers

Tap into any family and friends that are willing to help which could be cash or just a helping hand setting up and spreading the word you’re in business. You’ll be surprised who in your circle of friends will help.

Work from home

Depending on the type of business you’re beginning, you may be able to work from home or use a workspace that costs little or even nothing. There are lots of shared office options and some businesses with spare capacity may rent out their spaces or equipment to save you signing up to long leases or buying equipment.

Harness social media

You don’t need a large marketing budget to build a customer base. The Internet can help you develop a strong presence for free.

Whether you decide to create a presence on Facebook, Twitter, LinkedIn or Instagram, regular interactions and postings are the keys to gaining customer awareness.

Use crowd funding to raise cash

Having gained popularity over the last few years, crowdfunding lets you receive donations on the Internet to help get your business idea off the ground. You can offer people incentives to encourage them to get behind your business.

Some examples include:

Each of these sites has great case studies and examples you can view.

Delay payment

Possibly you can negotiate with suppliers a much longer payment cycle, free trials or a number of months’ rent free in a new lease agreement.

Low cost marketing

Effective marketing can be creative rather than costly. Some ways you can get your brand in front of potential customers include:

  • Email campaigns – as you begin to sell to consumers’ you’ll want to get them coming back for repeat purchases. This is where building an email contact list and sending out regular deals with calls to action can keep your business going.
  • YouTube videos – images can speak louder than words, and video even more so. Whether you’re explaining what your business does or showing how a product works, videos are a cost-effective medium for getting your messages across to your target market.
  • If you sell direct to other businesses then use up some leather and go visit (walk, drive, call, fly). Face to face meetings don’t require an advertising budget.
  • Build word of mouth referrals by actively asking new customers to refer you. Don’t wait for word of mouth to build over time as it tends to be too slow.

In summary outline all the ways that you can save money by first reducing what you need and then from what you can borrow. Spend your time like a currency and do as much as you can yourself (with friends) before you start paying others.

Your next steps

Research your local industry to see if there is any specific start-up grants, subsidies or support that you may be able to tap into and talk to your trusted advisors (like your accountant) if you’re looking to fund from the crowd to make sure you’re doing the right thing.

List everything you need and brainstorm with others how you can get access without paying for it and be confident you’ve accumulated more goodwill than you think; if you don’t ask you won’t get.

Book in a chat with us to discuss your next steps. The chat is free, so is the coffee. We also have access to a range of 50% and 100% funded business services.

If you’re a small business owner whose company hasn’t gone through hard times, that’s great but it’s likely to happen at some point. As much as we dream about being brilliant enough at business that we’ll never face slow times, there are many things beyond our control that can negatively affect our business. How you go about managing the impacts of unexpected events and getting your business through tough times will set you and your business up for success for years to come.

Here are our top four tips for getting your business through tough times.

Focus on your Existing Customers

When companies go through tough times, many owners turn their focus to bringing in new business. The downside is that existing customers are often forgotten, but those are the most efficient people to make sales to. You don’t need to stop marketing yourself to new customers, but make sure you give extra focus to the customers you already have, to ensure they remain loyal. Find out what their current needs are, how successful you are at meeting them, and what you can do to maintain an ongoing relationship. Communicate with them, and always provide exceptional customer service.

Reach out to Others

Chances are, you aren’t the first person in your industry to experience tough times. Talk to other people who have been in similar situations to learn how they navigated those challenges. Ask them what did and didn’t work for them, and what they learned from the experience. Some—if not all—of their answers could be applicable to your business, or could at least inspire a solution.

If you need a chat, a sounding board or someone to run through ideas in tough times, reach out to the team at MBP. Regardless of whether you’re a client or not, you can book a free 30 minute chat with one of our team here.

Examine your Marketing Plan

Your marketing plan brings in new customers. Now is the time to consider fresh marketing ideas to bring in new revenue. Is there an area of your business you haven’t promoted before but could bring in clients? Is there a new way to market yourself you haven’t tried?

Examine previous marketing efforts to determine how successful they were. If they weren’t successful, stop wasting your valuable time and money on them. Use your efforts on something new.

Improve your Cashflow

Assess your company’s financial health to see if there are ways to improve cash flow. Can you charge clients a deposit or encourage payment up front to increase cashflow? Are there products you sell or services you provide that bring in revenue more quickly than others? Are there ways to save money that won’t hurt your business in the long run?

It can be tempting to eliminate staff, but when things are good you’ll just need to hire employees again. Doing so costs time and money. See if you can find small ways to save money that won’t negatively affect your business when it starts booming. Cutting overtime, for example, can save you money without losing staff.

Make sure you can account for every dollar your business spends. Don’t hide from creditors, communicate with them to find out if you can restructure your debt or extend your terms. Free up as much money as you can without setting yourself up for failure when things turn around.

Final Thoughts

Chances are your business will go through tough times at least once. It’s important you take action to help get you through it, rather than crossing your fingers and hoping the difficulties pass.

The steps you take during these challenging periods will help you, but they can also help set you up for increased success in later years.

Got a question? Please don’t hesitate to get in touch.

Regardless of the type of business you run, having a passive income should be high up on your list of goals. Earning money while you eat, sleep and play sounds like something from a fairy-tale, but it certainly is achievable.

Here at MBP, we’re constantly looking for ways to help our clients achieve their business and financial goals. We find that by spending time now to set up a passive income source can provide significant future benefits. So, we’re discussing the benefits of doing so and making some suggestions for ideas you could try or adapt to develop a passive income for your business.

Benefits of Creating a Passive Income for Your Business

Being able to earn money even when you are not working is what many of us strive to achieve. With time being finite and what little we have being split between work and personal commitments; a regular income not dependent on your actions is essential.

The benefits of spending time and effort in setting up a passive income stream for your business include:

  • Less financial stress – you know that you have more than one way to bring in an income. This leads to lower stress levels when one avenue starts slowing down.
  • Promotes freedom – we’re not saying you can run away from your business, but rather that you may be able to give it less of your time and attention. This frees you up to do more of the things you want to do – a bit like outsourcing.
  • Jump of income potential – the sky may be the limit when it comes to the amount of income your business could achieve. If you don’t need to do a lot to bring in the cash for one thing, then you can work on other avenues and ways of increasing your income.
  • More opportunities – the extra income your business generates provides you with additional opportunities to grow and promote your business.

You will need to do some research into ventures you could use to develop this income stream. We’ll give you some ideas which you may wish to investigate next.

Passive Income Ideas for NZ Businesses

It’s always better to have income coming in from multiple streams. Should the economy crash, a product sells out or a natural disaster occur, if you only have one income stream, your business could be under significant financial hardship. That’s where developing and trialling different passive income ideas comes into play, such as:

  • Writing and selling eBooks or guides – is there a burning question or topic your audience is always wanting to learn more about? Creating the ultimate guide and then selling it via your website or through online eBook resellers is an option. An eBook doesn’t need to be hundreds of pages long to be successful. Also, if writing isn’t your thing, you could even pay a ghost writer to do the job for you.
  • Monetising your YouTube channel – if you’ve got some great skills in the video department, grow your business’ YouTube channel. Once you have a significant number of followers, you can use it to start to bring in an advertising revenue. Start by applying to YouTube, and if you meet their criteria, they will start placing advertisements before, during and after videos on your channel.
  • Create an online course – you know enough to be considered knowledgeable or even an expert in your industry. Why not teach others what you know so they can benefit from it too and charge them for doing so? You could either sell the course through your own website or use one of the many online course resellers (who will take care of the marketing and hosting for you – at a price).
  • Affiliate marketing – as an affiliate marketer, you recommend online products or services to your audience. When they take up your suggestions, you receive a commission from the original seller. This is done by applying to the seller to become their affiliate. You are then given a piece of code that needs to be positioned within your website or a specific link to share. The seller’s software tracks the use and conversion rates of the links and will know when you have directly resulted in a sale for them. This is then paid to your bank account. It is good manners to tell those who may click on these links that it is an affiliate link you will benefit from.
  • Build a sales funnel – ah, the old sales funnel strikes again. But if you have got a process going to move your audience from your social media feed or Google search, build a relationship with them and eventually get them to buy something from you, this is the ultimate in passive income generators. Often a pre-written newsletter series is used to do this, as is retargeted marketing. A sales funnel usually requires that you obtain the prospect’s email address so you can follow up with them too.
  • Create an app – if your skills lie in the technology world, create an app and then on-sell it. Obviously, it would be useful to be related to your industry, as then you could market it to your existing and future followers. An app could be sold via your own website, but also through app resellers, which would help you reach a wider audience.
  • Investments – we wouldn’t be bean counters if we didn’t recommend investing, now would we? While the returns for most businesses won’t blow your socks off, interest is a genuine form of income. We suggest chatting with a financial advisor, and we can point you in the right direction if you don’t already have one.
  • Monetise your blog – if you have a blog which has high levels of traffic or are prepared to put in the efforts to achieve one, you could monetise your blog. This would involve either selling ad spaces in text and image formats on individual pages. You could even sell sponsored blogs, where you create content specifically targeted at achieving the aims of your sponsor, and then publish it on your website.

Obviously not all these ideas will work for your business, either financially, time or industry wise. That’s where using the services of a business advisor can help. Our business development services can assist you with the planning required to establish successful income streams within your business. We’ll make sure that your ideas fit within your core values and help you to identify if they have a solid chance of being successful.

Make today the day you start growing your income streams. Get in touch with our team of business advisors and let’s make a time to chat about developing passive income opportunities for your business.