Every business needs to find their niche - something that makes you stand out from the crowd. This may mean offering improved products or services, taking them to new markets, or even coming up with an entirely new offer. How to spot gaps in your market and identify opportunities for innovation
Innovation is at the heart of every viable business idea - but "new" can quickly lose its gloss in a competitive marketplace. Rivals will waste no time improving on your offer, and customer expectations will rise accordingly.
"If you sit on your laurels, there's a risk your customers will move away from you," warns John Fitzgerald, chief executive of entrepreneur-support organisation BRAVE. "You could have a perfectly good product or service, but your customers may have become more demanding, or there may be new, cheaper or more innovative competitors in the market."
How to find a gap in your market
Spotting a gap in your market could help your business to soar above the competition. Here are our six tips for seeing the opportunities that your competitors haven't.
1. Listen to your customers
"Any small business needs to look for trends in its customers," Fitzgerald says. "What are they thinking? Are their expectations changing?
"If you listen to your customers, you find out whether they may be thinking of leaving and give yourself time to do something about it," he continues. "Don't allow the day-to-day to get in the way - put time aside to talk to your customers, and not just your favourite ones either."
2. Think laterally about your strengths
If your business is already established, there’s likely to be some things you can do better than pretty much anyone else. Whether it’s the best equipment, highly specialised staff or super-efficient production processes, think about how you could use these in innovative ways to rout the competition.
One example is Uber, which built up an unbeatable distribution network of drivers as a ride-sharing platform. It was then able to leverage this strength to move into - and totally dominate - the food delivery space in 2014 as Uber Eats.
3. Watch your competitors
Knowing your competitors' strengths will help you identify what you could offer that they don't - highlighting needs in the market that are not currently being met.
Mystery shopping is one way of finding out about rivals, as is attending trade shows. But your customers are likely to be the most valuable source of information.
"Ask them 'What makes you stay with this competitor?'," advises Fitzgerald. "Is there an opportunity in that for you? For example, if you offer a higher standard of service, maybe that gives you a new unique selling point (USP). Look for weaknesses in your competitors and use that information to target unserved markets."
4. Look further afield
You don’t necessarily have to come up with an innovation yourself - if you regularly travel, try looking at how your industry functions in different countries, and see what innovations you can spot.
Local firms may well have come up with a game-changing idea or business model, which they haven’t rolled out to your territory.
Good market research is essential, to check whether you could launch a similar idea (or a modified version) back home.
Market gap analysis also means looking at the way other sectors do business. If you can, bring their approach into your own firm.
5. Search for unsolved problems
To find a niche in your market, instead of thinking in terms of what product or service you can offer, think about the problem you can solve. What pain points do your customers have that no-one else has addressed yet?
Qualitative market research can help you unlock insights from customers about what’s currently on the market in a particular sector, and what sort of breakthrough would persuade them to switch brand or product.
6. Keep up with business legislation
New laws steer businesses in new directions and may even open up new markets. Environmental regulations, for instance, have generated an industry dedicated to helping firms reduce their environmental impact.
"Keep an eye on the Government changing the landscape," Fitzgerald says. "A lot of companies don't keep up with legislation, and this costs them opportunities.
"The most important thing is to give yourself time," he concludes. "The earlier you spot a market gap, the easier it is to fill it before anyone else gets there."
