Finding a gap in the market is a great way to create a new product or service for your business. By filling a specific, unserved niche, you can guarantee demand, drum up sales and win over loyal customers. Better yet, you’ll have less competition to deal with and a unique edge that can be leveraged in your marketing and sales activity.
Identifying a market gap can also be a strong foundation for your business plan. By finding consumers who need your offering and tailoring your strategies to serve them well, you will have the keys to success. This is very promising to an investor or lender, helping you to secure the funding you need for your new venture and bring potential stakeholders on board.
However, the UK business population is dense, and it can often seem like there’s already a brand for everything. So to find something new takes creative thinking and understanding of your intended market.
Below, we’ve listed our top tips for finding gaps in the market that can bring prosperity to your business.
- Focus on your area of expertise
- Look at your own challenges
- Speak to potential customers
- Utilise market research
- Be inspired by your competitors
- Think outside the box
Focus on your area of expertise
When you decide to create this new revenue stream or start a venture, the likelihood is that it will align with your existing skills, interests and passions. Ultimately, you’re the person who must live and breathe the business, so it needs to be something you’re invested in.
If there is a set area you are looking to position yourself in, it’s essential to understand that market. If it’s already something you have experience in, you may have some of this knowledge. However, you should still deepen your understanding by researching the sector, reviewing data and hearing what other experts say.
By enhancing your knowledge of the sector, you will determine what’s missing for customers. This will enable you to identify a suitable gap while keeping your entrepreneurial idea aligned to your skills, so you can excel at filling that gap.
Look at your own challenges
Often, entrepreneurs will come to their brainstorming from a business angle. However, you’re also a consumer – perhaps even in the sector where you’re aiming to establish a business. It’s worth using this experience as a customer to review what challenges you have faced and what you would like to see in the market.
Consider past purchasing or service experiences you have had and ask if there could have been a better solution. Alternatively, think about times where you’ve had a requirement and couldn’t find any suitable solutions. This will empower you to come up with ideas from a customer’s eyes and find worthy ideas that could appeal to them.
Once you’ve come up with an idea, it is worth sense-checking it by discussing it with others, including friends or colleagues, to determine if there’s any mileage in it. Even if an idea sounds great to you, not everyone will share the same pain points and preferences. So, taking it to a broader audience will enable you to gauge potential demand and whether it warrants a business.
Speak to potential customers
As we’ve already mentioned, it’s essential to check that any idea you have has enough demand. If you’ve never been a consumer in that area, it can be hard to determine what challenges and frustrations people may be facing. Speaking to real customers can be a great way to identify their requirements – particularly those that aren’t being met by existing companies.
Spend time talking with potential customers to find out more about what they want through focus groups, surveys or informal chats. ‘Potential customers’ could be people who have bought from your competitors or fit the demographic of your target audience. You could even use platforms like social media, forums, and blogs to identify people who have spoken about topics related to your idea.
By speaking with consumers, you can identify opportunities for your business while validating the need for it. It’ll also help you to come up with ideas that you may not have been able to find on your own.
Utilise market research
Alongside speaking to potential customers, there may be existing market data you can access to inform your efforts. For example, this could include reports about consumer behaviour and attitudes within that sector.
Another way to gain helpful insight is to utilise social media and search engines to find out what people are talking about. People will often use social media to air their grievances, including needs they aren’t having served or sub-par experiences with companies that could be improved. Similarly, search engine data shows the answers people seek – which could include the kinds of purchases they want to make.
Looking at data from both platforms can therefore highlight demand and spark inspiration. Search around your chosen topic in social media and Google and see what complaints, questions, or attitudes emerge. From there, you can determine if any could be turned into a sensible business idea.
Be inspired by your competitors
Although one of the benefits of finding a market gap is having less competition, competitor analysis can still assist you. While you may not have any rivals providing the exact same offering as you intend to, there will likely be players in the market who might offer similar products or services.
By looking at what these companies are doing, you will identify room for improvement in their offering, including needs they aren’t addressing or products and services that could be built upon. You will also understand any weaknesses they may have (looking at customer reviews is an excellent way to gauge this).
Understanding the state of your competitors will enable you to use their limitations to strengthen your offering and identify ways that the customer isn’t being supported. It will also allow you to keep the edge over other brands, so you can enjoy a more significant market share.
Think outside the box
Being innovative and creative is incredibly important when looking for market gaps. Often, the best ideas are the ones that have never been considered before. Finding a completely unique idea is rare, but it can enable you to find an instant niche and become the dominant player in that area.
One famous example of a company that identified a niche is Northamptonshire shoe factory W. J. Brooks. Facing struggles, the owners sought a solution to drum up new sales in a declining industry. The eventual key was finding an entirely new market – creating footwear for drag queens who felt unsupported by traditional women’s shoes. The move kept the factory going for some time, and their story has since been turned into a film and musical.
The example of W. J. Brooks proves the power of a fresh idea, even if it comes from an unexpected place. So, don’t be afraid of ideas that may seem ‘out there’ – so long as you can prove there’s demand for it, it could just be the right basis for your business.
Coming up with a new business product or service isn’t something that can be forced. However, taking the time to understand your market and the challenges customers face can be a great source of inspiration.
By identifying how customers aren’t being served and positioning your venture to bridge the gap, you can build a strong foundation with established demand. If you can fill the opening well, you can enjoy increased sales and a growing customer base. It will also make you much more appealing to financial stakeholders, so you can get your idea off the ground.
If you need help in accessing funding to fund your business, we can help. Our advisors can discuss your ambitions with you and get you finance-ready, with a solid business plan and understanding of your trajectory.
We can also identify the best funding options and put you in touch with relevant lenders and investors to move you towards your goals.
Get in touch today to speak to a member of the team.