How to Identify Your Business’ Niche and Target Markets

Whether you’re an entrepreneur with an innovative new idea, a startup founder getting your company off the ground, a seasoned professional with experience in your industry, or any combination of the above, knowing the focus of your business is crucial to success.

A big part of that focus is understanding who your customers and stakeholders are and how to hone your skills and products to accommodate their needs and make a positive impact on their lives. These partners of the Ohio Third Frontier offered their expertise on how innovators, entrepreneurs, and other players in the Ohio startup scene can identify their niche and target markets for success.

Why is it so important for entrepreneurs and startups to identify their niche market and what is the biggest benefit? 

“If you know your market/your customers before your launch, you will spend less money and less time finding them after the fact. A niche market simply means smaller market, but finding your target, or right market, translates to a categorically more aligned and passionate audience who want a solution to a particular problem. This makes it easier for startups to find early champions, build trust, gain velocity, and focus on fast scaling in a greater market. This is simply accessibility and speed to market, but mastery of market indicates an entrepreneur who has done the proper preparation for their journey. Understanding the larger market helps to narrow down the niche offering.”

— James Hilton, Senior Director of Entrepreneurial Services at Bounce Innovation Hub

“Finding success as an entrepreneur or startup requires pinpointing where you belong in the marketplace. This approach is much more cost-effective than attempting to appeal to a broad and diverse audience, allowing them to be more precise with their efforts, while still reaching their desired goals. Taking the time to find a niche market and dedicating limited resources, such as time, capital, and marketing efforts to target this specific audience can help create products or services that meet the niche’s unique needs and preferences efficiently — allowing you to differentiate from competition and establish a competitive advantage. But more than that, understanding and leveraging the needs and desires of a niche market enables startups to connect with those specific customers on an emotional level through storytelling, fostering customer loyalty, and creating a lasting foundation for success.”

—  Kate Hursh-Wogenstahl, Marketing & Communications Manager at Cintrifuse

“Identifying and proving your value proposition in your target market is the most capital-efficient way to scale your business and generate revenue. Startups operate with limited resources – knowing your target market helps you build out a focused plan. Whether you are bootstrapping your business or raising capital from investors, you want to know how you are spending your limited resources. Knowing your target market helps you see patterns in customer behavior and answer critical questions, such as do all customers have the same pain point, do they have the same buying behavior, how they will use the product, and how much will they pay for the product? Getting consistent feedback on these questions is crucial to building out a focused plan in all areas of your business, including product, go-to-market, sales, and operations.”

— Hardik Desai, Managing Partner for Investing at JumpStart

“If you think about what is implied in identifying a ‘niche market,’ that’s the set of customers that can extract the most value from your offering. Hopefully, the effort required to get them to buy from you is lower than from other market segments. Small businesses and startups tend not to have a lot of time or money to waste in finding customers, so the sooner you can find your niche, the better!”

— Scott Koorndyk, President at The Entrepreneurs’ Center Inc.

Once you’ve established what your niche market is, how can entrepreneurs and startups leverage that information to generate growth?

“Identify the pain points, create the scenario where that pain is lessened, and then present your solution as a part of the journey to a pain-free life for your potential customers. That path is how any company will be able to find product/market fit and generate growth from a niche market. The value of a niche is accessibility, which will tie into velocity and costs. What most investors might look for in any startup is the ability to get to your first customer (niche), then how repeatable that is (non-niche market), and then correlate that to potential. While investors represent one path, the ability to identify the niche market you are entering and capture attention is important whether you are going a venture-backed startup path or a smaller business.”

— James Hilton, Senior Director of Entrepreneurial Services at Bounce Innovation Hub

“Knowing you’re selling to the correct customer is going to provide winds behind your back immediately. You can now focus on building proper pipeline management, identify a better understanding of your sales cycle and addressable market, and begin to better project growth. This all has the downstream impact of improved resource planning and forecasting.”

— Pete Blackshaw, CEO at Cintrifuse

“Once you see a consistent pattern of customer behavior in your target market, you can start building out the product, collecting data to prove your value proposition, and demonstrating product-market fit. You can leverage early product-market fit in building out a robust go-to-market plan that allows you to scale your business. Various aspects of the go-to-market plan could include generating case studies, identifying lookalike customers, building out a digital marketing strategy, and attending conferences where your target customers go. While the specific tactics may vary by industry, knowing your target market allows you to grow revenues in the most capital-efficient way.”

— Hardik Desai, Managing Partner for Investing at JumpStart

“Once you’ve established your market niche, you enter into a constant level of conversation with those customers. Great startups leverage those relationships to grow sales, identify other opportunities, and pivot if necessary.”

— Scott Koorndyk, President at The Entrepreneurs’ Center Inc.

How does your organization offer resources to help entrepreneurs and startups identify their niche and target markets?

“Our focused tech and small business programming is tailored to meet entrepreneurs where they are with frameworks of success that are repeatable across many different verticals and stages. These frameworks have been built by experienced entrepreneurs and advisors who have run the race before, successfully. We surround entrepreneurs with resources and wrap-around services to make this journey less challenging. For identifying markets, the programs we offer tailored for earlier-staged companies use these methodologies to help founders do the things mentioned previously.”

— James Hilton, Senior Director of Entrepreneurial Services at Bounce Innovation Hub

“Cintrifuse offers multiple resources that help entrepreneurs and startups find niche markets, including one-on-one coaching, hack-a-thon opportunities, and access to industry insights. Our sustainability-focused hack-a-thons, which we run in partnership with the city of Cincinnati, allow startups and entrepreneurs to innovate in niche areas of sustainability. Following the hack-a-thon itself, Cintrifuse has organized an incubation period that fast tracks startups’ growth through access to mentoring, accelerators, business advisors, and bootcamps, creating a cohort of startups that are pilot-ready and venture-scalable in less than a year. Not only will they create job opportunities and economic growth, but they also attract other businesses and investors to the area. Additionally, Cintrufse offers startups access to our Data Desk, a one-stop shop for startups and ecosystem partners to access powerful analytics and research, ranging from industry deep dives and investor lists to competitive intel.”

— Pete Blackshaw, CEO at Cintrifuse

“JumpStart offers a variety of resources to help entrepreneurs and startups in their market discovery journey. Customer discovery and market sizing are just one of the ways we are able to support our founders with custom service plans to help them along their startup journey. Some of the target market resource support includes workshops and one-on-one coaching on customer discovery to help founders identify their target market, what their needs are, and if your solution is meeting those needs. It also includes market research support from analysts with access to industry databases to understand how large the market opportunity is that you are targeting and access to industry and subject matter experts to get deep market feedback via interviews and surveys.”

— Hardik Desai, Managing Partner for Investing at JumpStart

“The Entrepreneurs’ Center makes the development of customer relationships and the niche markets that they form a key priority of the work we do with our clients. The EC has formal customer discovery workshops, training programs, and learning modules to help our customers. In addition, the EC employs a team of Entrepreneurs-in-Residence who provide direct support to our entrepreneurial and small business clients.”

— Scott Koorndyk, President at The Entrepreneurs’ Center Inc.