Since releasing Built to Sell last year, I've received a number of questions from business owners looking to apply the model for creating a sellable business outlined in the book.
This week, I'm going to use this column to tackle some of the questions that led to the creation of the second edition of Built to Sell, which is now being released in Canada.
How do you find a niche market to enter? Is there a series of questions you typically ask yourself that lead you to an idea?
My model for creating a valuable business (and keeping as much of the equity for yourself) involves controlling the pricing of what you sell, which means you never respond to requests for proposals (RFPs) and you get paid by customers before you deliver your product or service.
This kind of pricing authority means you need to find a quiet little niche where you can be the big fish who sets the rules.
The secret to finding a niche is to think about the things in your own life that are either missing or not working ideally.
For example, I'm preparing for a Half Ironman Triathlon, and I use energy gels on long training runs.
I have a pair of Descente running shorts with a small back pocket on the outside of the fabric. It is the perfect size to store two gels, and it gives me easy access to them without stopping to shove my hands between my legs to fish one out from a front key pocket, which is where most running shorts' pockets are.
To be clear, casual runners seldom need to use gels, so it is no surprise that the major manufacturers ignore the extra work and cost of sewing a pocket in the back.
My trusty old Descentes are getting frayed and soon I'll be risking an indecent exposure citation.
I need new shorts, but no matter how hard I try, I can't find any with a similar pocket. Descente has stopped making my favourites. I've tried probably 10 other manufacturers, and they all just sew a key pocket into the crotch. I wonder if they have ever run 21 kilometres with a foil-wrapped energy gel rubbing against the inside of their thigh?
If I were starting a business today (I'm not), I would be tempted to develop a line of running clothes for long-distance triathletes.
When you're participating in your hobbies and interests, ask yourself, "What is the one thing that would make this activity better?" That's when you'll stumble on a niche that you know intimately in an area that you care deeply about.
John Warrillow is a writer, speaker and angel investor in a number of start-up companies. He is the author of Built To Sell: Creating a Business That Can Thrive Without You,