Finding Your Niche in Business Quickly in 2023 (With FREE Worksheet)

Kaine Levy
April 1, 2024
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In this article, we’ll be breaking down how to find your niche so you can build your brand and grow your business faster.

What Is a Niche Market?

Before we dive into how to find your niche, we should first define what it is we’re looking for. A niche market is a smaller segment of a larger market and is made up of people who share similar wants, needs, pain points, and even lifestyles. For example, the larger market might be “food and beverage”, but niche markets within that could be “vegan chocolate”, “organic tea”, or “vegetable snack products”. The reason this is so powerful is that when you understand the needs, pain points and behaviours of the people who buy in a particular niche, you can figure out how to talk directly to them in every aspect of your brand.

“The beauty of the Internet is there’s a niche market for everything, and if you can focus on it, you can build a sustainable and viable business of it.” - Michelle Phan

Why Niching Will Make You More Profitable

Whenever we do brand strategy with our clients, we encourage them to go all-in on a niche. Why? Because nearly 1 million new businesses are started every year in the UK, and that means that each year becomes more and more competitive.

Niching will help you to grow your business and become much more profitable in 5 ways:

  1. Better targeting: you can create a more targeted product that fills a gap in the market and an unmet customer need.
  2. Builds your brand: you can become known as the brand that sells a particular niche product that no one else does. This will be vital for your positioning strategy and allows for more effective market penetration.
  3. Increases short-term sales: targeting a niche will allow you to generate a lot more sales than you would if you were competing in a larger market against bigger fish. Your competitors have a lot more money, resources, market share, and brand awareness than you do. There’s no need to put yourself in an unnecessary battle that you’re unlikely to win.
  4. Enables you to scale faster: considering the previous two benefits of short-term sales and brand building, you can reinvest these resources back into the business to scale much faster than you otherwise could competing in a larger market.
  5. Better expansion opportunities: by focusing purely on one niche and serving it well, you will occupy an unclaimed market position that you will eventually dominate. From here, you not only have a loyal tribe of customers, but you can also move into a new niche and repeat the process.

So to summarise, niching down opens up the landscape of opportunity massively for your business. It gives you a group of customers begging for a so low competition.

What Are Niche Examples?

Now that you know what a niche market is and why it will make your business more profitable, let’s look at 3 food and drink brands that have used niching effectively:

1. Liquid Death - the “funny water company who hates corporate marketing”

Liquid Death is a great example of how to niche down both in the market and in a product. Their “water in a can” not only solved the problem of recycling and single-use plastics, but it also turned water - something typically boring and sterile - into something cool and edgy.

As a company, its branding and marketing go completely against the grain. Even the name "Liquid Death” is completely counterintuitive to the pure and healthy qualities of water, but that’s exactly why they have seen so much success. By building curiosity around water they have actually encouraged more people to actually drink it, and changing consumer behaviour is what effective brand strategy is all about.

It’s no surprise then that the Liquid Death brand is now valued at $700 million.

Niche product: canned water

Niche market: edgy, alternative people and Gen Z

Image via CNBC

2. Candy Kittens - the colourful cat company that specialises in “gourmet vegan sweets”

Piggybacking on the personal brand of their Co-Founder and former Made in Chelsea star, Jamie Laing, Candy Kittens are a company that cares equally about its impact on the environment as on its customers.

With the vegan market growing at astronomical rates year on year, Candy Kittens chose to niche themselves at multiple layers. The first and obvious one is that their sweets are vegan, so they’re not made for the mass market. The second one is that, to date, they only make sweets. And the third niche is gourmet. Niching three layers deep mean they’re not competing with non-vegan sweets, other vegan snack brands, or vegan sweets that are cheaper and more “entry-level”.

In 2022, Candy Kittens were listed as the “second-fastest growing sugar confectionery brand in the UK” according to The Grocer.

Niche product: gourmet vegan sweets

Niche market: vegan confectionery

Image via The Pretty Box

3. Tony’s Chocolonely - “100% slave-free” chocolate

I’ll try to contain my excitement on this one as Tony’s Chocolonely is one of my favourite brands (I’m eating a bar while writing this article). Tony’s Chocolonely positions itself as “incredibly tasty chocolate” that is “100% slave free”. Therefore, their niche market is sustainable and conscious snackers.

Like the vegan market, sustainability has become increasingly important to consumers in recent years. Knowing this, Tony’s has targeted a niche segment of this market in sustainable snacking (and more specifically sustainable chocolate).

Everything about their brand is unlike anything you’ll see from other chocolate brands and is reminiscent of the Wonka bars made by Nestlé between the 1970s and 2000s.

Niche product: slave-free chocolate

Niche market: the sustainable snacker

Image via Tony's Chocolonely

How To Find Your Niche Market

Now for the part you’ve all been waiting for: finding your niche. If you haven’t already, download your FREE 3-step “Find Your Niche” Worksheet at the top of this article. Inside you’ll find three exercises that will guide you towards your profitable niche.

Step 1: Ikigai - “Reason for Being”

The Japanese have a powerful concept called ikigai, meaning “reason for being”. The ikigai model helps you find your niche by pinpointing the overlap between:

  • What you’re good at
  • What you love doing
  • What the world needs
  • What the market pays for

Use the exercises in our free worksheet to brainstorm your ikigai and your niche.

Step 2: Niching Prioritisation Table

Now that you’ve brainstormed your ideas, we need to prioritise them from a profitable business perspective. Using the table in the free worksheet, list your ideas from Step 1 and score each of the four categories out of 10. The one with the highest score is your niche product!

Step 3: Market Validation

Now that we have our niche product, we need to validate that there is a market for it. In his book $100 Million Offers, Alex Hormozi breaks down the 4 essentials for identifying a profitable niche market:

  1. Markets where people have a massive pain and a need for a solution, not just a want.
  2. Markets where people have sufficient money to pay for the solution.
  3. Markets that are made up of people who are easy to find, reach, and target.
  4. Markets that are ideally growing or at least staying the same, but not declining.

You’ll rarely find an untapped niche that ticks all 4 boxes, but if you do you’re onto a goldmine. If you can tick 2-3 then you’re onto something that's likely to be very profitable. Don’t bother with anything that ticks only 1 box.

Use the exercises in our free worksheet to help you validate your niche market.

Grab your FREE copy of our 3-step “Find Your Niche” Worksheet at the top of the article

What Are the Best Niches for 2023?

Unfortunately, there is no easy answer to this. If there were we would all be millionaires. However, finding your niche doesn’t have to be complicated, and you can do it in under 30 minutes using the process outline above. Of course, I’d recommend doing deeper research on your niche market with a healthy mix of studies and surveys. If you’d like to know how to do that, check out our article on how to find gaps in the market in 2023.

👉 Don’t forget to grab your FREE copy of our 3-step “Find Your Niche” Worksheet at the top of the article!

Join our tribe of entrepreneurs to learn how to find gaps in the market and build a brand.

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