By Owen Mead-Robins
Becky asked me to write an article about finding or developing a niche. So let’s go back to the beginning of Oprius, where the need was identified. My girlfriend was working for Cutco selling professional knives, and was having trouble keeping track of all the little details. My girlfriend was working as an independent sales rep in her spare time to put herself through school. Many join a company like Cutco, MaryKay, or USANA to make a bit of money in their spare time, or simply for the pleasure of running their own business. As with running any small business, there is a lot to keep track of.
So having a programming background, I created a really basic database for her to use. One day she took the software into the main office to use while she was calling potential customers. That day 5 other people in the office wanted to know where she got the software and where they could get a copy. All of them could see the huge value in it. This was the big ‘ah ha’ moment.
I then realized that if my girlfriend was having a problem with this, probably many others doing similar work would be having a problem. Most business are formed by solving a problem or by making something easier or more enjoyable. So at this point the problem was identified: “Having trouble keeping track of all the details of running a network marketing / micro business organized.”
The next part was finding a solution. Instead of building yet another software system, I started to look around for software to meet this identified need. My original plan was to find something and then just become a reseller, as I was certain software existed for this problem. However, there was no software that was really solving this set of user’s needs. This is where the niche comes in. The wikipedia defines a niche as:
“A niche market is a focused, targetable portion (subset) of a market sector.
By definition, then, a business that focuses on a niche market is addressing a need for a product or service that is not being addressed by mainstream providers. A niche market may be thought of as a narrowly defined group of potential customers.”
Another way of thinking of it: if you take a large group of people (people selling things), is there enough of a difference to form a group inside that group (selling things part time out of their homes with little to no sales, business, or technical training). Is there enough of a difference that if you took your large group of people, and divided them in a room that one part of the room would have quite different needs from the others in the room?
In our case, most software for helping people with sales is designed for large sales. This software has a great deal of functionality and it works well for what it was designed to do. The problem is that for network marketers their sales are much smaller. They aren’t trying to sell a $250,000 piece of machinery to a mill; they are trying to sell a $25 bar of soap. As well, they don’t have an IT team to support them; they have to do everything themselves. Also terminology like “Sales Funnel” and “Opportunity Pipeline” sounds more like plumbing than something for their business. The result is that we have enough strong reasons why someone in our niche would definitely purchase our product over the existing general solutions. Remember that the existing solutions are typically established with a mature product/service and large customer base. So those reasons to separate your niche from the rest have to be strong reasons.
So now that we have our niche of people and a problem to solve for these people, we need one final piece, size. Let’s say that we want to sell… dog collars. Let’s say further that I have identified a group of dog owners who want silk collars, made with fair trade practices, with a GPS tracking system, to be sold in Central America. You very well could have a very compelling argument for why this group of people will buy your special collars over the generic ones, but you need numbers. For Oprius, there are 15 million people in network marketing in North America. If your niche is only a very small handful of people, can it generate enough sales to sustain a business?
- So in summary you need 3 things:
- A compelling difference from the larger group
- A problem to solve or improvement made for that group
- A decent sized group to sustain the business
As a side note I would be curious if putting a tracker on collar would be a good business. Probably better to use a radio tracker like they use for wildlife conservation. Might help people with dogs who like to wander. Feel free to run with the idea, just as long as you let me know when your business becomes a success.
Owen Mead-Robins – VP Operations
Oprius Software
Tools For Network Marketers
http://www.oprius.com/
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Becky started Small Biz Survival in 2006 to share rural business and community building stories and ideas with other small town business people. She and her husband have a small cattle ranch and are lifelong entrepreneurs. Becky is an international speaker on small business and rural topics.
