Operating in a niche can be very cost effective as well as enabling your business to become a leading player in its field.  A niche market lets you target your sales messages with greater precision; the more specifically you define your niche the easier it is to cater to the shared interests and needs of the people or businesses in that market. A great example of niche marketing comes from an entrepreneur by the name of Frank Kern. He markets a product for parrot owners that he guarantees will teach their parrots to talk within 30 days. This one product nets him an estimated $20,000 per year and is just one of fifty niche marketing sites he’s in the process of setting up.

What is a niche market?

A niche market is a group of people or businesses that can be described as:

• Sharing the same interests and requirements
• Having a need or want for your products
• Sharing the same communications channel(s)
• Large enough to produce a profitable volume for your  business
• Not presently being targeted by a large number of your competitors

You need to find areas where prospective customers’ needs aren’t already fully satisfied.  Analyze any other businesses operating in this market area and the quality and features of the products they offer. You then have to create a competitive advantage by offering a value-add that isn’t already available. 

Clarify what you’re doing

Estimate just how much time, money and other resources will be required to profit from this niche. Meet with your team and prepare an outline of the project. Identify what is needed to develop the product or service to a marketable stage, what marketing investment it will need, and the timeline for its development and launch. 

Create your niche proposition in detail

It would cost a fortune to set up a business that sells all kinds of books online and could compete with Amazon.com. They’ve had ten years to grow into the world’s biggest bookstore and would probably be impossible for a small operator to successfully compete against. But you could profitably cater to a niche of the book retailing market – for example, publications for owners of classic Fords or people interested in the art of silk painting, and succeed because of your specialization.

Consider every aspect of the product itself. What’s needed to make it the most attractive option available to your niche and how will it be marketed? Go through everything in detail with your chosen niche in mind; the language you use, the packaging, and how it will be sold are just some of the details that have to be worked through. Be sure that the product is right, the pricing is acceptable and your marketing efforts appeal to your audience before moving ahead.

The positions in most SMEs have evolved into their present form rather than having been created with specific objectives and duties. This means that the roles of team members often overlap or don’t incorporate everything the person could be doing. A thorough review of each position will clarify these vital details and put your business in a position to run more efficiently. The review should be done in conjunction with the person in the position so that both of you gain a clearer understanding of the role and its responsibilities.

Tasks of the position

Begin by making a simple list of all tasks each employee does – ‘answer telephones’, ‘purchase stationery’, ‘collect mail’ and so on. For each task list the outcomes that the work is to accomplish. Be as comprehensive as possible and ask why each task contributes to the functioning of the business. ‘Answering telephones’ makes a contribution to sales, to accounts, to public relations and frees up managers to spend their time more effectively. Then create a brief outline about how each task is performed:

• Is it performed manually or with the use of equipment?
• Is it performed independently or with the assistance of someone else in the office?
• Is it required to be performed at specific times of the day?
• How much time does it take each time the task is performed?
• What skills are required for completing the task?

Priority of each task

Assign each task a level of importance according to its contribution to the business. Use only three classifications:

• Essential – the business will not survive unless this task is done
• Valuable – contributes to the functioning of the business but not essential to its survival
• Nonessential – if the task was not performed it would have no effect on the business

This requires some sensitivity to people’s feelings as everyone thinks that what they do is important. Duties such as picking up the owner’s dry cleaning or collecting money for a weekly lottery entry may be part of somebody’s responsibilities but contribute nothing to the business.

Document the essential tasks

Prepare a ‘how to’ step-by-step manual for performing each essential task in the business. As you do this, go through every step and ask whether this is the best way to do it or if there is a way to improve it. If the person now performing a task leaves the business it will be much simpler to bring a new person up to speed because you’ll have a written procedure they can follow.

Examine the valuable tasks

Tasks that are considered valuable deserve closer examination. Each should be analyzed to answer the following questions:

1. Should this function be performed by someone else in the business?
2. Are the outcomes of this task the same as another task that’s being performed?
3. Is the task being performed at the optimum time of the day?
4. Is the equipment being used appropriate for the task?
5. If the task is performed with others, are you using the best combination of team members?
6. Is too much time being spent on the task?

There are a number of tasks that are valuable to a business but could be handled in a way that adds more value. If the person doing the task is struggling then consider training them up or reassigning the task; or perhaps they’re being performed inefficiently because the wrong equipment is being used; or maybe they are just being done in a way that consumes too much time.

Eliminate the nonessential tasks

The final step in your review is to eliminate any nonessential tasks. This will free up team members’ time for better performance of their other duties and for new tasks that may have been put aside because there wasn’t time for them.

If your business has a website it’s probably recording valuable information that could be helping you to grow your sales – but you may not be doing anything with it. In fact you may not even be aware of it. Ten years ago the number of ‘hits’ on a website was the basic measurement of success; today’s metrics are much more sophisticated and consequently much more valuable.

There are no standard metrics that apply to all websites. Each company needs to gain specific information from analyzing its website statistics and this can only be obtained by having the right equipment and software in place. Smaller firms may even be better off using a hosted web service that can collect and analyze this data for them.

But when you have details on the levels of activity on your website you can answer questions like these:

• How many people are visiting the website?
• Which pages are viewed most?
• What kinds of search phrases do people use to find your website? =
• From which other websites do visitors come to your website?
• Which countries, regions and cities do your visitors come from?
• How long do visitors spend at your website?
• How do visitors navigate within your website?
• What are the peak times for visitors to access your website? What times are the quietest?
• What kind of browser do they use when they visit your website?

This is the raw information that can be collected. The value of some of it is immediately obvious – if you aren’t getting many visitors then you need to be looking at how well you are marketing the site for instance. But further analysis can yield even more actionable results.

Business to consumer (B2C) websites

If your website is designed primarily to interest consumers in buying your product or service then website activity analysis, or ‘clickstream’ analysis, can provide information about your customers that enables you to proactively meet their needs.  You can analyze the behavior of your customers when they visit your website including where they enter and leave it and what areas hold the most interest for them. You can find out which products customers relate to one another and what kinds of information they want to learn about each product. Clickstream analysis will also determine the website’s drop-off rate – how many customers abandon the purchasing process once they’ve started to buy something. And that can indicate a need to simplify or clarify the buying process so as to take customers through to the sale.

Business to business (B2B) websites

Because time is so important to everyone in business it’s essential to collect data on such metrics as how long it takes to place an order and how much time is spent searching for particular products. ‘Stickiness’, or holding visitors on the site, was once considered a measurement of success. But when the time spent is because the customer can’t easily find what they are looking for and it’s costing them money then it’s a definite disadvantage. The website’s server files can be analyzed for user patterns and trends that can provide feedback about the site’s ability to meet customer needs. For example, if users are searching for something too often it can indicate that the product is too difficult to locate or is so popular it should have a more prominent link.

Content based websites

Sites that are content based need to track the number of unique visitors as well as total visits and page views; these are important metrics that can be used to promote your site to advertisers – they indicate how widely the advertiser’s product is likely to be seen.  Analyzing in detail how your visitors navigate on the website will tell you whether they are able to find the content they want and help to improve site navigation. Search function reports can show every keyword searched for on the website and identify gaps in content.

How this information can be used to grow sales

Website analysis technology lets you to get to know your customers through their online behavior and this information enables your sales team to respond to the unique interests of a potential customer. Innovative software can alert your sales team when a particular prospect is online and tell them what page the prospect is viewing. The sales team can follow up this visit to the website shortly afterwards, knowing that the information is fresh in the prospect’s mind.

You can even tell which visitors are ‘hot’ prospects and identify those that are probably ready to make a purchase, as well as knowing which ones are interested in a particular product or service. Content based sites will record which whitepapers a visitor has downloaded and which subjects they’ve searched for. To get the best result from any website monitoring it is best that all data is tracked and analyzed to show longer term trends. The longer the time over which data has been collected, the more likely it is that the conclusions drawn will be actionable and effective in growing sales.

Self-employment has lots of advantages. You make all the decisions. You’re the one who determines your own success. And you can always be sure of having enough money in the bank to pay the bills – or can you? Being self-employed has its own set of challenges, not the least important of which is managing your money. How you handle the money you receive, and especially how you plan a budget and stick to it, will determine whether you stay in business.

Be prepared before you open the doors

If you’re about to start a new business there are many things to do that will help you get through the initial stages of self-employment. The most important of these is to be sure you’re not undercapitalized. The basic rule here is, unless you have enough money to cover all your forecast expenses in the first year, don’t do it.

Clear out as many of your personal debts as possible and don’t incur any new ones. Trade in the family car on a work vehicle if one’s required. Use furniture from your home for the new office, at least until you can afford a new desk and chair. Be as economically conservative as possible and only spend money on true revenue producing activities.

Prepare a business plan

Every business needs a business plan and one that’s just starting up needs it the most. Properly constructed, a business plan is a model of your business including such details as income and expenses and showing when each will come in. It will incorporate your marketing activities and show how much cash will be available to repay loans.

Your business plan will enable you to prepare budgets for the business and for your family as well. A self-employed person always has close links between their business and their personal life, and there’s never a ‘Nine-to-Five’ day nor is there likely to be a five day week.

Watch your cash flow

It’s impossible to overestimate the need to monitor the business’ cash flow. Cash is called the ‘lifeblood’ of a business and it’s certainly necessary for the continuing health of any organization. Very few small businesses have a truly steady income. There are usually peaks and troughs; some months are a lot better than others. About the only certainty is that the bills will have to be paid on time. Get your invoices out quickly and have a credit policy that you rigidly enforce. Don’t let bills pile up either; if you think one month’s bills are hard to pay, just imagine trying to come up with the money for three month’s bills in one hit.

Keep tightening the belt

Make frugality a habit. Before spending anything always ask: “Is this really necessary?” This doesn’t mean penny pinching on important areas like product quality, but it does mean avoiding the temptation to spend up big just because the business had a good month. This is why it’s so important to set a budget and stick to it. The business might perform better than you’ve forecast, in which case you can begin to build up a reserve to cover yourself if times get tough in the future. Invest any extra cash, even if it’s only an on-call account, and squeeze every bit you can out of it before it’s needed to pay bills.

Remember to set aside funds for taxes. There’s a temptation to put off taxes until the end of the year when you see how much money the business has actually earned, but this can leave you with a big debt and no way to pay it. Include taxes in your business plan and put an amount away every month. 

“Drive thy business or it will drive thee.” – Benjamin Franklin (1706-1790)