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Very few entrepreneurs will ever be privileged to invent a completely new product or service. It’s either too difficult to come up with an original business idea or it is prohibitively capital and research intensive to be the first one on uncharted terrain (commercial space travel, anyone). To add insult to injury, innovators such as Motorola (creator of first handheld mobile phone) usually find themselves overtaken by later entrants to the market and let’s face it, most enterprises would choose market leadership status over first to market status, hands down.
So how does one get a good slice of market share without constantly worrying about competition? The short answer is that you can’t. There will always be some amount of competition. However finding a niche market makes life simpler. Though it appears that by electing to serve a niche you have reduced your market base and profit levels, the reality is that capturing a large market when you are a small player is highly elusive. A niche market focused strategy gives you better odds of dominating a larger share of a smaller market because you are catering specially to this market’s needs.
How does one find or create a niche market? There are several good articles on the internet that offer good insight on identifying a niche. We however believe the following are three key attributes of a profitable niche market:-
- You know and understand these people. They are your tribe: The concerns and interests of the people who comprise your niche should not be foreign to you. If for example you are selling physical training services to over modestly active persons over 50, you should be attuned to the group’s goals and obstacles to goal attainment. You would know that though it is carnival season a programme highlighting sexy abs and rapid fire weight loss would not electrify your clients.
- They have the means to buy your product/service at a price that returns a profit: May seem obvious but it is worth stating. Your niche must be able to pay for your product. No sense in marketing high end coffees and teas to a niche that is primarily value driven in terms of their food choices and purchases. They may purchase once or twice but never on the consistent basis necessary to make your business sustainable.
- The niche is large enough to sustain a business long term: It may be tempting to define a niche that is so particular that you are one of a handful of businesses catering to that market. However you need to ensure that either you are selling a product that this highly specialized niche needs on a frequent basis ( so you make money on repeat sales ) or that the niche is still large enough that even sales from a small number of the niche are enough to support the business. After all there is a reason why no-one has heard of a successful hardware store selling only novelty tools for women.
Recently, a good friend of mine, a fitness trainer and incidentally a marketing professional, told me about her plans to start a fitness programme centred on walking. In the hyper -intense world of Crossfit and Alcatraz classes, I was not convinced that anybody would be interested in something so hum drum as walking. Turns out I was wrong. Two days after she started advertising her programme, several persons called expressing an interest in the classes. Each of the callers fit to a tee the profile of her target market. I was blown away. Clearly she knew her niche.
So there you have it. Happy niche hunting!
Let’s face it. The energy business has long been the domain of big corporations. That’s slowly changing with the drive towards renewable energy. Entrepreneurs with good ideas, lots of persistence and some funding, can plant their oak in the still not densely populated forest of green business.
Caribshare Biogas is an example of a small outfit that’s daring to root its place in the green energy space, starting in Jamaica. The company uses biogas generated from organic materials such as animal manure and or food waste to produce electricity. The animal manure and food are fed into a large (2.500 to 5.000 cubic meters) hermetically-closed container known as digesters, where it’s heated to 38-40 degrees Celsius and stirred for 30-60 days, slowly producing a combination of methane, carbon dioxide and other gases (known as biogas).
This biogas is then fed into an electric generator to produce electricity and heat. Through the process, the waste is also converted into a high-quality fertilizer (called digestate). And, once it is removed from the digester, the process starts all over again.
Caribshare is able to offer a competitive source of electricity generation because the cost differential between fossil fuels-based electricity generation and biogas energy has narrowed in recent years. Biogas competes on par with fossil fuels in terms of performance, cost, and offers additional environmental benefits such as reduced greenhouse gas (GHG) emissions. Caribshare’s primary customer, Rose Hall Development Limited, requires an inexpensive and ideally renewable fuel source for its water reclamation facility which serves major hotels in Jamaica’s northern tourist belt.
Caribshare’s biogas to electricity initiative demonstrates that wind, solar and hydro are not the only technologies available for the creative entrepreneur.
Hear a bit more from Caribshare’s founder, Carol Lue.
Franchising has not been a popular route to business ownership in the Caribbean largely because of the significant capital outlay needed to acquire a franchise. A franchise differs from other types of business opportunities insofar as it offers the entrepreneur/investor:-
(a) A branded business. Most franchisors are licensing a business that is known and recognized. The value (and therefore cost of the franchise) is often directly related to the franchise’s market recognition and share. The investor/entrepreneur will have to spend less time and effort on promotion and marketing of the business.
(b) A working (and successful) operating model- Franchises comes with their operating systems and guides. There is no need to reinvent the wheel. In fact the investor can’t reinvent the wheel or tinker with it too much as the franchise agreement will stipulate adherence to the common system.
(c) Ongoing business support – Investors can expect ongoing training support and direction from franchisors as part of the franchise package and in return for royalties paid to the franchisor during the life of the franchise.
Whilst franchise acquisition is not for everyone and success with a franchise will depend a lot on the suitability of the franchise to the investor’s home markets, Caribbean investors and entrepreneurs should give it a little more of a twirl. By partnering and pooling resources, investors can make franchise acquisition more affordable.
Check out franchise opportunities available to Caribbean investors and entrepreneurs here.
Some persons appear to be born with the entrepreneurial acumen. They recognise and pursue commercial opportunities where others lack the insight or the will. They also realise pretty early in the game that they will be job creators, not job seekers and they embrace the responsibility.
Meet one such entrepreneur who inherited the bones of a business and started building it at the tender age of twelve. He is Troy Williams, CEO of Williams Tools and Equipment.