How To Prevent Your Business From Failing

You know your business is in war, right?

Your business is constantly competing in a bloody battle for survival against 24 million others in our interconnected world.

So why do most businesses fail? Because there's no need for them (i.e. they're pointless).

Chart Courtesy of StatistaCharts by CB Insights

If your business doesn't address a specific pain-point people are struggling with, and offer the "perfect solution" for it, you're doomed.

That's why Step 1 of business should be to determine what problem you can solve. The more pressing the issue, the easier people are willing to part with their money.

In order to stand out in a crowded market though, your problem needs to be unique. If a million other products satisfy customers' need in the exact same way, you're doomed too.

What is a Niche?

Your Niche ("neesh") is your unique position in the market.

Finding a niche means to serve a specific, targeted part of the market and focus only on serving that part of the market.

Why focus on only a small part of the market?

It might sound counter-intuitive. We tend to think that trying to cater for everyone means we'll have a larger pool of customers. In reality, it means you'll blend in between 24-million others and never get found (Especially online).

To get found online you need to stand out, and the easiest way is to focus with laser-precision on a small section of the market.

If you're scared that you won't have a large enough audience if you focus too narrowly — don't be. Trust me, with about 40,000 google searches per second the internet is a very big place.

So how do you find your niche?

I'm going to use a blog as an example because it's one of the simplest online businesses.

So let's say you want to start a blog about pets. You'll have a lot of competition… According to Google, there are about 805,000,000 other results:

You'll have so much competition, in fact, that your odds of being found are slim-to-none (1 in 805 million to be precise).

But what about if you have a blog about pet nutrition? Now there are only 198,000,000 others. It's still a lot, but you've cut your competition by 400%.

If you really want to stand out and make it easy to be found, you could write about something totally unique such as 'rabbit nutrition'. That will cut the competition by over 5000% to only 14,300,000 results.

How specific should you go?

The more specific you can be, the easier you'll make it for yourself.

When starting a business and trying to build a customer-base you get to choose your own difficulty-setting (most people don't even realise it).

No niche is too small if it's yours.

-Seth Godin

The broader your market, the harder you make it for yourself.

Being very specific builds authority.

Let's say you sell toys improving cat behaviour, and another business sells general cat toys.

If a googler is looking to improve their cat's behaviour by stimulating them with toys, which one of the following results would they click on in a Google search?

a) Cheap Toys For Cats & Dogsb) Behaviour Enhancing Cat Toys

A clear-minded searcher will choose Option B. They want specific products that speak to their issue, and someone promising that specific product is way more useful to them than someone promising some product that might be useful.

Pro tip: Start so narrow that it hurts

Over time, as you grow an audience you can broaden a bit to give yourself more freedom and expand your business. But, I'd recommend starting as narrow as possible and broadening as your customer-base as it expands.

Here's an example:

Start a business selling Behaviour Enhancing Cat Toys — people searching for more specific products will likely find you easily. Then, over time, you can expand into providing toys for other animals and eventually have a behaviour enhancing pet toys range.

Homework: Go do your research

It's tempting to jump into the fun stuff and start marketing a product, but doing research about your target customer is crucial.

Without data, you're just another person with an opinion.

-W. Edwards Deming

You need to know if anyone wants to buy what you're selling.

Look at the following graph from Google Trends (an amazing tool you should be using before you open your doors):

If we're going to be selling Cat Training Toys in our fictional business, we need to know what the demand for training cats is.

Notice how we're not looking at the demand for cat toys. Cat toys aren't a specific problem — and recall that the failing 75% of startups don't focus on the problem. Our research should be into finding how large the pool of people struggling with the problem we solve is.

The blue line shows searches for 'how to train a cat'. The red line shows searches for 'cat behaviour'.

Your first instinct might be to think you should focus on Cat Training Toys because people search 'How to train your cat' most often, but that isn't true. In fact, it's the opposite.

There might just be too much interest. The high amount of searches and large amount of competing results means the market is likely already being efficiently served.

The other consideration is your audience's motivation. Someone googling 'How to train your cat' is looking for advice and techniques. Someone searching for 'Cat Behaviour' might be looking more toward a solution.

You'll need to narrow your focus and try to serve the less popular 'cat behaviour' searchers.

The yellow line shows what happens if you go too narrow. No one is searching for 'maine coon behaviour' on a daily basis. So although we've seen there's much less competition for that search term, we now also know there isn't a lot of interest.

That's why research is vital.

How to Find Your Business' Specialty (Niche)

So, how do you find your niche? Your specialty should be where your knowledge, passion, and audience intersect.

Does my niche have potential?

Head over to Google Trends (http://trends.google.com/trends) and look up possible search terms for your product/service. Remove the keywords/searches from the list that have no audience potential (or too small potential).

Next, head over to Google and search the remaining topics (the ones you didn't just remove). Look at how many results they have.

Decide which searches have too much competition (you already know there are people searching for your remaining items, so now you only need to find the ones with the least competition).

This will guide you to phrase the problem people are solving.

Your Pain-Point-Phrase (PPP)

Now you need to put what you've found in a sentence.

For example:

Pain-point: Bicycles that get stolenProblem with existing solutions: Locks and chains rust in the rain

PPP: I make rust-resistant bicycle locks for casual cyclers.

I say casual cyclers because that will be my focus. I mean why would a professional cycler leave his expensive bicycle outside?

Next steps…

So now you know what your niche is, and you've made sure there's a potential audience, and you don't have too much competition. What's next?

Sign up for the Mingan.co.za 30 Days to Success free email course, and find out in Day 2.