Small businesses have been popping up like crazy since the beginning of the pandemic. People are getting crafty, learning new things, and also shopping online more, with stores closing and traditional manufacturing slowing down (Read more about that here). Although things have managed to settle into the ‘new normal’, we’ve faced the Delta variant, and now the Omicron variant that has many people fearing a return to the quarantine of 2020. Pair this with the busiest shopping season of the year and you have what is cooking up to be the perfect storm for small businesses and entrepreneurs. While we’ve focused on helping small business owners in the past few articles, for this blog, we’re turning back to entrepreneurs! If you missed the 2020 small business pop up craze, but don’t plan to miss it for 2022, we are here for you!
For all entrepreneurs starting out, there are few new lessons we can teach you. The best thing about the internet is that it allows platforms like ours to offer plenty of resources out there to help you take your business from inception to execution. This is why we’re starting with a seemingly simple but essential piece of advice. When designing and envisioning your business, keep in mind that starting small is your friend. When starting your business, focusing on a niche can help you stay centered and help your business naturally grow before expanding. According to Mark Cuban:
“While many aspiring entrepreneurs still do the “Even if we just get a 10th of 1 percent of the market, that’s still 59 million!” math, choosing to enter a product category simply because of the market size is a recipe for failure.”
Another way to see this is as the diversity rule which says that “technology lowers the barrier to entry at every state of the value chain.” Essentially, technology has lowered the barrier to entry for entrepreneurs looking to start a business. As we stated earlier, there are articles, videos, and guides all over the internet on how you can turn your passion into a business. Because of this, more people are starting businesses, alongside people picking up all kinds of crafts and hobbies during the lockdown. Many who lost their jobs decided to go for it and launch their passion projects. Because of this, just about every niche is being tapped into, perhaps not on a large scale yet but most niches have active businesses.
For example, the makeup industry has recently seen a boom due in part to the rise of YouTube, Tik-tok, and Instagram. As a result hundreds of niche makeup brands popped up. From sustainable brands like Athr and Elate, to brands focused on catering to people of color: like Melt, Blk/Opl, or aging women: RMS, ByTerry or not even women at all! (Hims & Hers, Patrick Ta) All these brands picked a niche within the makeup industry and catered directly to it. Taking it slow and growing as organically as possible is what has led to their rapid success. Thus, despite being rather young brands, many can already be found in large retailers.
When choosing your business, your first inspiration and motivation is probably a passion, or a problem you’ve personally faced. These naturally lend themselves to niche markets. Of course, there are outliers: most software and tech companies are finding themselves VC backed and despite running successfully, do not turn a profit for years! However, niche markets are not the end all be all for your business; getting too comfortable in a niche market means if you do not innovate and keep your customers interested and excited about your brand you run the risk of losing all your traction, and being one of the hundreds of businesses that die a year. No business is perfect, and of course, your niche market must grow if you hope to really see your business thrive! For more pros and cons of the niche market, check out this article.
This time when you start drafting your business plan, which is just as important for small businesses as large businesses, keep in mind how you can make the most of your niche market and expand slowly. (Using an MVP is a great way to start, and we even have a video on it!) As an entrepreneur you’ve probably got plenty of ideas on how you can bring your product or service to the masses. Keep those in mind for your future, and remember that maximizing your niche is key to your success!