Spotting a gap in the market is how we all think about business success. This is to be one of the classic key success factors in business.

Why you need a gap

Most of the businesses I see are very similar to other businesses, and often my starting point is to find out what that business does (or can do) which makes them remarkable.

A business based on a gap in the market should automatically be remarkable. They’ve been able to see something they can provide which no one else does.

They might have found something new to provide; Rubik’s Cube, kids’ scooters, a piece of the moon are all examples of these gap exploiters. You’ll note that many of these gaps are soon filled by cheap me too copy cats pretty quickly. By the time I got a Rubik’s Cube when I was a kid, it was a cheap knock off version from Brownhills market.

A Gap In The Business Model

Or the gap might be providing a product or service in a completely different way. LoveFilm rents DVDs, but they captured the market by sending them through the post, rather than using the videoshop model, adding convenience and a huge list to choose from.

Gumtree provide the classified ads which local papers have made money from for centuries, but they’ve changed the model by making 99% of the ads free and putting it all online. Tom Peters calls this “creative swiping”, where you take an idea from someone else, and give it a good twist to make into something new.

Copying Someone Else

The easiest way to find your gap in the market is to copy someone else. LoveFilm copied Netflix, and Gumtree copied Craigslist and transferred these business models from the US to the UK.

You could research what other people are doing in different countries (or other cities in the UK) and work out what gap you might be able to fill where you are. Ideally, you want to do this before whatever you’re copying has been widely written about, otherwise you’ll find a bunch of other people who are all doing the same thing, all launching at the same time as you.

Trends

You can find some amazing ideas by absorbing yourself in different trends in business thinking and what’s happening in particular markets.

The world is moving pretty rapidly, and technology and economic forces are very fluid. The trick here is to research into certain areas, especially those which are not altogether obvious. If you have some knowledge in a particular area already, that’s good, but you don’t necessarily need to be a programmer to understand what’s happening in online technology – you can always buy programmers later.

In fact, it can be better if you don’t have any industry knowledge as you won’t have any preconceptions and blind spots. One of my recent clients identified a gap in the market for a particular kind of product, and once she was certain that there was a viable business, she bought 2 days per week of consultancy time from someone who was already very established in that industry. That way, she was able to tap into a deep level of knowledge about suppliers, materials, manufacturing processes, without having to learn all this stuff from scratch.

Where To Get Started

You might think about:

Chris Anderson’s The Long Tail and Free to get a grip on new business models.

Jessica Livingston’s Founders at Work to see how others have done things.

Seth Godin’s Purple Cow, and his blog.

New Scientist magazine can help you to think about the world differently, as can reading science fiction.

PFSK have a great blog about lots of weird and wonderful ideas.

And of course…… you can come and see me for a chat about your initial ideas and where you would like to take your business. I can help put you in the right direction, challenge your thinking so far, and most importantly, help you make money from your gap in the market. Buy me a coffee, and I’ll talk you through the initial steps; pay me a regular fee and I’ll help you make it into something real.

How business mentoring and support works

Keep in touch

If you’d like to get more tips and thoughts to help improve your business, let’s stay in touch. You can sign up to my email newsletter to get all the gossip, or get this blog by email or RSS – see the big orange button on the left hand side. And don’t forget to follow me on twitter

I wrote recently about the businesses I can’t help, so I thought it was only fair to write about whom I can help.  It’s tempting to write this as a sales pitch, but I’ll resist temptation and try to be more objective instead. My strap line is that I help small businesses who want to be bigger businesses.  I specialise in businesses with less than 30 employees because the smaller businesses are the sexy exciting ones. The businesses where I can make the most difference are the ones where the owner is committed to growth, and knows that he or she needs some help and support to get there.  Where the owner wants to get to be a bigger business, but doesn’t really know how to go about it. Imagine a two-person design partnership.  They’ve developed some demand, and have some good clients, but they are uncertain how to move from doing all the work themselves to being able to manage other people doing the work.  If you’ve read any of Michael Gerber’s Emyth books then you’ll know that there’s a key growth stage in stopping doing the work yourself, and getting others to do the work, while you become responsible for developing and running the business.  The temptation for our design company is to carry on doing all the work themselves, getting more and more worn out by servicing clients, or by not spending any time on marketing, they risk running out of new business.  Or both. In this situation I can:

• Identify what sort of work the lovely designers need to go after
• See what how they need to price their work to remain competitive, but have enough to be able to afford to pay other people to do the production and improve their profits
• Help them work out what marketing activities are going to work best for them
• Refocus them on marketing, so they can attract new clients
• Make sure they do the marketing, by being there and reminding them of what they promised to do

Of course, my lovely designers could do all of this themselves, but what do they get extra by paying me to help them? I’d say they get:

• The courage to charge more money
• Some fantastic new ideas about marketing, which they maybe wouldn’t have been able to come up with themselves, because I spend all my time seeing what works and stealing other people’s tactics
• Someone to be accountable to – so they can’t just slip back to their old habits, but are reminded that now we’re doing business in a different way.
• Someone who gives a damn.  This sounds obvious, but how often do you have someone who actually really cares about whether you succeed or fail, and have that person be someone who knows what they’re talking about.

Let’s take another scenario, this time of a bigger business.  Here’s a company which has been running for a while.  They have 12 staff, so they’ve got over the delegation issue, and they’re nicely profitable.  But, the director knows that she doesn’t want to spend the rest of her life running this business – at the moment it’s still fun, but she wants to sell up in 3 years time.  And, she wants to have enough money to do something else after that, or to do nothing at all for a while.  In fact, she knows that she wants to sell for upwards of £1.5m. Why would she want to get the woman with the curly hair and glasses in? Our director (we’ll call her Alice) needs some help to achieve her target of a sale in 3 years with a price tag of £1.5m.  Where I can help is:

• Assessing how much turnover and profit she needs to bring in to make the business worth that million and a half, and make sure that the business is working in a way which will maximise the sale value.
• Working on a much bigger marketing strategy to build up the business
• Helping with the recruitment of a really hot sales director to bring in the big sales which are going to add up.
• Supporting Alice in all the little problems that come with growing a business, so she’s got someone to go through things with her.  Again, this is about giving a damn, and getting help from someone who has been through this themselves.

That should give you an idea of the sort of businesses I work with and how I make a difference.  If you would like to talk about how I can help, you know where I am.