Why finding a niche in the market is vital for the success of an SME
Having ideas in the business world is one thing, but implementing a strategy around them can often be an entirely different prospect.
Finding gaps in the market is ideal for product launches and innovative ideas, as this is where expansion and development of a company can occur on the grandest scale.
But it is not without risk – as products might not sell as well as forecast or may develop issues which can cost a considerable amount to put right.
While these problems may be unlikely, they can destroy the profit margins for a company and put them in financial difficulty.
Should this happen, the situation can often be rectified by sound advice and support and the occasional rethinking of strategy, although it is best to swerve away from allowing situations to get to that stage.
In terms of finding a niche, it cannot just be any old hole in the market as the chances are there’s a reason for it being left blank.
Demand in business is vital, as there isn’t any point in developing a product or system that people just don’t want – it won’t sell and the profit won’t be there either.
It’s vital to ensure that there is demand for a product through detailed market research before the planning stages are even contemplated.
That way the financial risks are reduced and the SME concerned is in a much brighter position to enter the market place and do what they have to in order to achieve growth.
In areas where competition is rife, exploiting the gaps with small but elegant design changes can lead to massive sales margins.
Of course, that all depends on the ideas, and SMEs by their very nature are free to explore avenues that other larger companies may choose to ignore.
Therefore they can restyle existing products and develop new ones, without the pressures of failure that can rest so heavy on those in larger businesses.
Often, only subtle changes are required to create a product that is successful, and when it does happen it is worth all the time and effort that is piled into such projects.
For SMEs, finding the gaps in the market is a fundamental aspect of them getting off the ground, while future success is often based on fulfilling consumer demand with the goods and services that they want.
By Phil Smith