Finding your business niche

I have lots of different businesses.  With only a couple of exceptions, all of my businesses only earn a little bit of money each.  That’s what I like.  Truth is, I have so many different businesses that off the top of my head, I am not even sure how many different businesses I have.  In fact, even if I sat down and started counting, I am not certain which ones I would count as actual businesses, some are so small, and things I do so seldom that I might not even count them.  But, I suppose if they are something I do to earn money, they are businesses, regardless of how small.

These small businesses that earn small amounts of money are what I would call “niche businesses” because they are not of appeal to the general public, but there is a small group of people, or a “niche,” who are willing to pay me for that service.  Usually, when you are involved in such a niche market, people will pay you more than if your business is of mass appeal.  For example, if you have a business that millions of people want to shop at, you will have plenty of competition, because the market is large.  In this case, you will need to keep your prices low to compete with all the other players in the business.  However, if you have a business that is very “niche” there will either be no competition at all or very limited competition.  In that case, you can charge more for your time or product, because there is not much competition at all.  As an example, let’s say that you were the manufacturer of Cola product.  Cola is very popular with several “big players” making it.  If you wanted to come out with a new Cola, well, you need to make your price competitive, even lower so that you can attract a slice of the market.  However, if you produce an off the wall, unusual flavor of soda, even though fewer people will like it, you probably would not have any competition for that particular flavor, and thus could charge a higher price for it.  After all, for those who really like your unusual flavor, even if the price is a bit more, they can’t get it anywhere else and will pay your price if they really want it.

The other day, I was talking to my Mom on the phone.  I mentioned that I had been hired by somebody to do a certain job for them.  My Mom said, “gee, I didn’t know you were in that business,” to which I replied “Oh yeah, you didn’t know?  I’ve been doing that for years,” I told her.  It surprised me that she didn’t know, but as I thought about it, I guess I never told her!  That is sort of the way I look at these businesses of mine, none of them are such a big deal, because they are small.  But, even though they are small, they earn me a nice living.

So, how do you go about figuring out what kinds of businesses to get into?  A lot of people tell me that they just don’t know what kind of business to set up.  They are looking for a business that will make a lot of money, and they can’t find it.  Well, the beauty, at least in my eyes, of niche businesses, is that you don’t need to look for something that will make big money, just look for something small that you will enjoy doing and that a few people might want to pay you to do, then promote the service.  If it turns out that a lot of people want to hire you to do that particular thing, well, that’s a good thing!  If only a few want it done, well, that’s OK, you just need to find other things that a few people will want to, and you will stay busy, and keep food on the table too.

So, again, how do I find these small businesses?  How do I decide what type of small businesses I should get into?  Well, that is very easy.  I let other people tell me what to do.  You see, if I get requests from people for a certain kind of service, if it is something I would enjoy doing, I do it for them, and then I start telling others that I will do it for them too.  I have a somewhat unique situation where I live in a place where there are not too many Americans.  Because of this, I get e-mails from people back in the States, in Europe, or elsewhere who need something done here.  For example, let’s say that an American guy who lives in the States likes to come to Davao where I live, and maybe he owns a house here.  Perhaps he needs something is done, some papers for his property or whatever.  A lot of these kinds of people will e-mail me and say “hey, would it be possible that you could go to the tax collectors office and get these papers for my house?”  Well, if I decide to do it, I will then set up a website advertising to others that this is a service I can provide for them.  After a while, I will have dozens of different websites offering different services, and maybe a half dozen people in a year will also ask me to do that for them.  Add all these up, and you will find that you are soon making some nice money.  That is how I come up with different types of businesses that people need and I can provide.  After all, if nobody needed the service, nobody would have asked me to do it in the first place.

It is similar to my wife.  She enjoys doing things like home decorating and such.  She also likes helping people.  Thus, she offers a relocation consulting service for foreigners who are going to move to the area where we live.  She will help them find a house to rent, negotiate the rental price for them, help them decorate the place, show them around town and such, and she makes nice money doing it.  She gets a fair number of jobs doing this, and her customers seem to always be very happy with the service that she provides to them.  It all started out by people asking for such help, and she decided to make a business out of it.  This is a sure fire way to anybody to find niche businesses that people will want to use.

As I said in my first paragraph of this article, there are a couple of exceptions when it comes to the “all of my businesses earn only a little bit of money” rule.  Why?  Because I started out with something that only earned a little bit of money, and it turned out that there was a bigger amount of demand for that particular service.  In fact, a couple of my businesses earn quite a bit of money, and they keep my life, and my family’s lives, comfortable.

But, if those few businesses do very well, does it mean that the other businesses that earn only a little bit of money are failures?  No, not at all!  For me, anyway, if a business earns me any money at all, no matter how small, it is a success.  Now, I suppose that if a business only earned me a few hundred dollars per year, and I was spending 20 hours a week on it, well, that would be somewhat of a failure.  However, if a business earns only $200 per year, and I spend an hour a year on it, well, that is still a success.  It’s just not enough of a success that I can live on it.  But, if I have many of those businesses that can earn me $200 for an hour worth of work, well, I can live quite nicely, don’t you think?

For me, niche business is a great way to get good paying work that will keep you busy and may lead you to some very profitable businesses too.