It is not always the case that a niche offering is something entirely new. It may be something old offered in a new way. It may also be an idea that is working well in (say) London, transported and adapted for another location.
Often the more narrow the target market the greater the chance of success as specific requirements are easier to focus on. For example, in normal weather conditions, it is easier to sell waders to fishermen than to the general population.
Equally, the niche may be dictated to by the unique selling points of the product. For example, trainer shoes aimed at mountain runners.
In his book Zero to One, Peter Thiel (ex PayPal) defined a niche as an effective monopoly. That it was not worth starting a new business unless you could quickly control 100% of the market space.
It is difficult to contradict this aspiration, however it is worth pointing out that the market space may not be worldwide, but just covering your locality. Arguably, the greater the monopoly situation and the larger the market space the better.
This is of course very hard to do and few of us have the time to sit and wait for that perfect idea at the perfect time, or indeed the intellect and finances to engineer that magical new widget that everyone is waiting for.
So the majority of businesses launch on the basis that there will be competition, but that there is enough demand to feed another supplier in the space.
The key in any event is to offer something unique. The sales offer has to have at least one unique selling point that differentiates this new business from the existing players. If the offering is unique enough you can carve out your own niche even if the market is otherwise crowded.
Quite apart from the ease of making sales if the offering is unique, it also makes the new business very attractive to business buyers. A unique business or niche player means competitors do not need to do any work to enter your market space - they just have to buy your business.
This adds value to the business as it allows the buyer to make a quantum leap in market domination with minimal investment and risk. So it will be reasonable for you to expect a little extra on the sales price when the time comes.
