It’s one thing to decide to start your own business; quite another to find the right niche to enter. Business books and blogs are full of advice for entrepreneurs to follow their passion and make or sell a product or service they know about and love. But expertise and enthusiasm alone are not enough if your idea does not fill a gap in the market or you get out-competed by failing to pay attention to rivals with a more finely-honed product or service.
The history of business is littered with products in search of markets that simply don’t exist. Take Juicero, the Silicon Valley company that spent nearly $120m developing a high-powered internet-connected juice machine, retailing for around £300. It abruptly closed its doors last year after it was revealed that its juice packs could be almost as easily squeezed by hand, showing that it takes more than enthusiastic entrepreneurs with deep pockets and big dreams to create a niche product that people really want.
To avoid such missteps, the Federation of Small Businesses (FSB) has published a crib sheet of 20 questions to help entrepreneurs decide what path to follow. They include: Can you see some form of opportunity from your existing work or occupation? There may, for example, be a niche product your employer finds hard to source. The FSB encourages entrepreneurs to think big, asking: Can you combine products or services into a package or bundle? Consumers may be happy to pay for the additional convenience this could offer.