Google, Apple, Intel, Microsost, Ford in the early days, US Steel
A star business is one which will most assuredly succeed beyond expectation and which meets the following 2 criteria:
1) Is the leader in your market niche based on your share of the revenue in that market niche; and
2) Is your market niche growing by at least 10% per annum
Or to combine these into one test – you need to be the leader in a niche market that is growing by 10%pa minimum
Assuming you are like most small businesses and say ‘no’ to at least one of these, don’t give up and stop reading.
Because the next question is ‘Can you reposition your business so that you can say ‘yes’ to both’.
And the answer for most small businesses is ‘YES’.
The first thing you need to understand is ‘what’s a market niche’.
Here’s a definition and some examples.
A ‘market niche’ is ‘a segment of a market that has different customers, different products and a different way of doing business’.
Many people don’t realise that Dr Pepper has been making its soft drink since 1885. Coca Cola tried to copy them but failed. For some time at least, Dr Pepper was a star business in its own niche.
Similarly when Red Bull first introduced its energy drinks, it created a market niche. This time both Coca Cola and Pepsi tried to copy them – but again failed – and Red Bull remains a star business in that niche.
Another example at the opposite end of the spectrum – would yellow cars constitute a separate niche? Clearly not. They aren’t part of a fundamentally separate market.
So, what have these big business concepts got to do with your little ol’ business?
The answer is that exactly the same principle applies – just on a smaller scale.
Lets say you’ve just started up a hairdressing business.
How can you possibly ever become the overnight leader in your market; let alone be in a market that’s growing at 10%?
The answer lies in finding – or creating – a popular new market niche.
The first thing to understand in this example is that most people don’t travel more than 5-10 km to get their hair done. So your competitors only exist within that area.
The next thing to think about is ‘how can you differentiate yourself from your competitors – to the point where you have created your own niche’.
There are some actual tests you can use to do this. More to come on this in a future post.