Is it a market or a niche?
Before we go into how to distinguish a good market from a bad market and a good niche from a bad niche, it’s probably a good idea to look at what markets and niches really are, what they have in common and what makes them different.
Here’s what markets and niches have in common…they are all about demand, a demand for something that’s wanted because it solves a problem or meets a need.
When starting a new business or expanding an existing one, we are looking for products and services that meet the demand of a market. Put another way, you do not have a market until you’ve identified the demand.
The only difference between a market and a niche is scale and specificity. Markets are large as in broad and deep, and good markets encompass many possible niches.
On the other hand a niche is a very focused and specific segment of the broader market, which though smaller in demand is generally easier to sell for reasons I’ll go into later.
A market for organic food can be made up of niche markets for organic fruits, organic vegetables and organic grains. Those can be further differentiated into specific types of organic fruits, vegetables and grains.
So the very first question anytime your business is looking for new products and services is…where is the demand and is it large enough for what I intend to do?
Next up…So why niche at all?