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Seek an Edge by Finding Your Niche

Clearly distinguishing yourself is the key to entrepreneurial success

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Seek an Edge by Finding Your Niche

"The Engine of America", Hector Barreto (Wiley: 2007)

Hector Barreto is the former Administrator of the U.S. Small Business Administration (SBA). In his new book, The Engine of America: The Secrets to Small Business Success from Entrepreneurs Who Have Made It! (compare prices), he reveals winning business strategies from CEOs of 50 successful small businesses (some of which are now large corporations), who share their experiences to help those starting or growing their own business. In this excerpt from Chapter 6, he explores the importance of finding your niche when you start you company, not as an afterthought.

Two of the most successful businessmen I know, Dimensions International, Inc.'s Bob Wright and Fabrica International's Al Frink, have both learned this lesson.

"One thing I learned a long time ago," says Wright, "is that to be successful you have to find a need and fill it. There are a lot of needs that are out there, and you have to find them and then fill them. You must create a niche for yourself and then just work your tail off to make it happen."

Frink puts it this way, "If you're starting a new business, whether it's producing a product or providing a service, you have to have something that you're doing that distinguishes you from what's already available. It's important to look for voids that are not currently being serviced in the marketplace. When you come into the marketplace, what is it that's going to define what you're going to do? Your long-term success is going to be defined by your ability to be different, unique, and better.

"The key is your ability to differentiate yourself in providing a service or making a product that will be your edge. If you can't enter a market with that, then you better wait until you can. How are you going to be able to succeed in the new venture if you can't define what you are going to do in terms of success?

"When I first started in the carpet industry, there were close to 10,000 carpet manufacturers in the United States alone. Today, there are less than 50. The company I founded is still one of them because it was positioned not to be a low-cost producer, but to differentiate itself."

So if finding your niche is the answer, the obvious question is how do you go about finding your niche?

Bill Bryan, a counselor with the Northern Illinois SCORE, gives some advice:

The ultimate key to small business success is finding a niche that is not covered. If you can identify your own niche, you'll probably do well. We are all trying to do business in an overcrowded marketplace and soft economy.

The consumer is inundated with commercial messages and often does not know which way to turn. Too many choices and too many sellers compete for a buyer's attention. It's enough to make some folks say, "To heck with it" and stay home with their consumer dollars.

Finding a market niche -- which you must defend by operating superbly and providing customer service without peer -- is the secret for financial success.

When a successful baseball player was asked for the secret to his constant batting success, he replied, "I hit 'em where they ain't."

SCORE has a wonderful device for teaching small business owners, or potential small business owners, many of the lessons they must absorb if they are to be successful. SCORE calls these lessons "60-Second Guides." They can be found at www.score.org/guides. html.

Jennifer Lawton founded a computer service company, and then became senior vice president for corporate strategy of a major Internet company and now has switched careers by buying Just Books, Inc., which she calls the "Smallest but Oldest Bookstore in Greenwich, Connecticut." She has written a number of incisive articles for the small business web site of the Ewing Marion Kauffman Foundation. Here is her interesting take on finding your niche and on niche marketing:

I've learned that niche marketing can play two ways. The first, which is what we do, is to have a niche-oriented company that you support with marketing and other "branding" efforts. The second is to have a broad-based company that seeks new markets, or a deeper experience, within a specific piece of the broad market.

One starts as a niche, the other carves a niche within a broader space. So when formulating your niche marketing campaign, you must first decide where you fit. Once you do, consider implementing the following five-point plan, which can play to either niche "face":

1. Know yourself.

2. Know your goal.

3. Know your customer.

4. Keep it simple.

5. Have fun!

Here's a tip for how to find a niche: If you need something and can't find it, do others need the same thing and can't find it either. If so, have you discovered a need, a market, a potential business?

I am amazed by some of America's most successful companies that are now household names that were started by entrepreneurs who first found a need because they personally had a need.

There's Tom Stemberg, who we talked about earlier, driving around the suburbs of Boston on a Fourth of July weekend looking for and not finding a printer ribbon. This led him to realize that office products were not being marketed correctly and that led him to the concept of the office superstore and the birth of Staples.

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