Your Niche in business

In this article we continue to look at developing your niche. So what’s your best-selling product... and what’s the profit margin on that product?

Do you have a “best-seller”? Do you know what it is? What is the margin on that product? Don’t know?

Find out!  And, when you do, raise the price on that product by at least 10 per cent.

Then, ask yourself if you could simply focus on that product (and perhaps the accessories for that product or service) to create a more narrow, yet more highly profitable business.

Say you own a full service restaurant, but the morning breakfast crowd is the bulk of your volume... can you become a breakfast-only cafe? Can you focus on great coffee and freshly-squeezed juices?  Can you become a “premium” priced café versus a “discount” full service restaurant?

Take a look at your business. Learn your numbers and know what it is you are selling. You just might discover the “gold” you are looking for outside of your business actually exists within it.

How do you get new leads and customers... and how much do you spend to “buy” your customers?

Do your marketing efforts pay for themselves? More importantly, do they make you money? Do you know how much it costs to get a potential customer to your door? Through your door? Or how much it costs to convert that lead into a sale?

If your advertising budget for last year was $100,000 and you can’t tell if it brought in new customers or added new dollars to your bottom-line, you have a serious business issue you need to resolve right away.

Learn as much as you can about how to turn your business into a marketing machine. Get comfortable with the idea of marketing and of “buying” new customers through advertising. If buying a new customer costs you $30, but the lifetime value of that customer is $5000, you have a great business and marketing program. But if those numbers are reversed, you won’t be in business long. As the late management guru Peter Drucker wrote, “the purpose of business is to create and keep a customer.”

I’ve met and known a lot of very successful business owners and entrepreneurs, and there are some in that exclusive club who run extremely profitable businesses with low overheads and very narrow selections of products and services.

Not only should they be envied, they should be copied. And the basic ingredients in their recipe for success are these simple steps.

Just remember simple is not always easy. But it can be very, very profitable.

Article reprinted courtesy of My Business Magazine