There are a number of guides, articles and interviews the conventional business owner can read to gain a better understanding of their challenges. But, when you own a niche business, a lot of what would normally apply, is not useful.
Niche businesses are inherent, in smaller markets, have more specialist products and services and they require a better marketing campaign to flourish.
You face many of the same challenges as conventional business owners but you need to approach and solve them, in unique ways.
One of the key concerns is, how do you expand?. As you’re aware, niche businesses take longer to grow so expanding is pretty risky unless you do the following things.
Buy or build?
Let’s say you are a clothing business owner. You would like to expand into another city, region or country.
You don’t need to worry about whether or not there is a consumer appetite for your industry, because clothing is both essential and fashionable. So building a new store would be on the cards and the location wouldn’t be too difficult a question to answer.
However, if you were a niche business such as a funeral home, you would need to be more careful regarding where you move to. A small town won’t have as many people dying and, thus, not need any more new funeral homes. This throws up the obvious conundrum of, ‘is it better to buy or make?’.
Using this information provided by BSF, it’s clear to see that in some cases, buying a business is better than starting one. If you’re looking to get into this kind of niche, require a loan to buy a funeral home instead of creating one to give yourself a head start.
Expanding your product range
As a niche business, you’re trying to battle the need to expand your products while also, remaining loyal to the avid enthusiast. If you sell niche cars, your main consumer-type will be someone who has great knowledge of cars and is wealthy enough to buy unique models.
And yet, in this day and age, a niche business cannot rely purely on this type of loyal customer. Take a look at how Savile Row has changed over the last two decades.
Once upon a time, all the tailors only made bespoke suits. But since large clothing businesses have begun to sell suits at a cheaper price, albeit of lesser quality, the suit makers of Savile Row have had to adapt.
Most, if not all tailors, now sell off-the-rack suits for the casual customer. It’s a way to introduce your niche brand to customers who aren’t as familiar with what you do.
Niche products are always going to cost more to make. However, in order to compete with the larger brands making cheaper products, you should become knowledgeable in competitive pricing. This is an adaptive skill that requires good accounting and market risk analysis. Both of these things you can and should pay for by hiring freelancers to work with you.
It’s great to be a unique business but with it, comes unique challenges. If you’re looking to expand your locations, consider buying instead of making from scratch.
Are you in a niche business? Have you found business expansion difficult?