Transcript Finding a Niche - Highline College

Today’s Schedule (7/5/05)
1. What’s going on in the world of business?
2. Supply & Demand
3. Ways to Start a Business
4. Legal Forms of Ownership
5. Find a Niche and Developing a USP
(unique selling proposition)
Business News Today!
WalMart
Stocks Higher
Consumers Confident
Housing Market Hot
The Business Cycle, Inflation
And the Actions of “The Fed”
Companies borrow,
hire more workers,
expand operations.
Inventories at their lowest.
Fed Lowers rates to “energize”
sluggish economy. Inventories
at their lowest.
TOO FEW DOLLARS CHASING TOO
MANY GOODS. UNEMPLOYMENT HIGH,
INFLATION LOW.
Layoffs and fears of an economic
slowdown cause workers to spend
less. Inventories still high.
Production in full swing. Workers making
high incomes. Inventories of finished
goods still lag demand.
TOO MANY DOLLARS CHASING
TOO FEW GOODS.
UNEMPLOYMENT LOW. INFLATION HIGH.
Fed raises rates to “cool”
overheating economy.
Companies cease expansion and
borrowing. Layoffs of workers begin.
Inventories reach highest levels.
Supply & Demand
Demand & Supply Curves
Demand
Supply
Price
Equilibrium Point
Quantity
Demand & Supply Curves
Price
Quantity
As demand increases, price goes up.
Demand & Supply Curves
Price
Quantity
As supply increases, price goes down.
Rent Control
Price
Shortage
Quantity
Rent Control
Price
Quantity
Demand & Supply Curves
Demand
Supply
Price
Equilibrium Point
Quantity
Demand & Supply Curves
Demand
Supply
Price
Equilibrium Point
Quantity
How can we
increase or
decrease
demand?
Ways to Start a Business
Ways to Start a Business
1. Start from Scratch
Advantages
Do it your way
Easiest
Cheapest
Disadvantages
May be a bad idea
No plan in place
Ways to Start a Business
2. Buy Existing Business
Advantages
Plan in place
Customers
Track Record
Location exists
Disadvantages
May be a bad idea
May no longer be
a good idea
Bad plan in place
Poor reputation
Purchase price
Ways to Start a Business
3. Buy A Franchise
Advantages
Plan in place
Customers
Track Record
Location exists
Training &
Support
Disadvantages
Can’t do it your
way
Purchase price
Monthly Fees
No Protection
Legal Forms of Ownership
Legal Forms of Ownership
1. Sole Proprietorship
Advantages
Do it your way
Easiest to set up
Cheapest
You keep profits
Tax benefits
Disadvantages
May be a bad idea
No plan in place
Personal Liability
May be hard to borrow
Can’t pass on to kids
Legal Forms of Ownership
2. Partnership
Advantages
Two heads
Easy to set up
Sources of capital
You keep profits
Tax benefits
Disadvantages
Personal Liability
Can’t sell easily
Incompatible
Legal Forms of Ownership
3. Corporation
Advantages
Limited Liability
Can go public to
raise funds
Disadvantages
Hard to set up
Personal Liability
Double Taxation
Legal Forms of Ownership
4. Limited Liability Company
Advantages
Limited Liability
Easier to maintain
than corporation.
Disadvantages
Personal Liability
Expense to set up
Legal Forms of Ownership
More information
Finding a Niche
and
Developing a
Unique Selling Proposition
Murray was
beginning to wonder
if Frozen Asparagus
Desserts! really was
the next big thing.
“Most small-business owners dive into
their niches because they love the
product or service they provide. The
annals of small business are filled with
the tales of founders who cared so
deeply about their product or service
that they subsequently decided to
make it their life’s work so they could
enjoy getting up in the morning again.”
- Small Business for Dummies
What is a Niche?
In biological terms, a “niche” is defined as a small ecological
space in which an animal can find ample resources to
survive, with few predators or competitors.
A niche can also be a place that has not seen a kind of animal
before. The island of Mauritius, for thousands of years, saw
no humans, rats, or other kinds of ground-dwelling predators.
A breed of flightless bird evolved to take advantage of the
safe, food-rich niche on the ground that other birds had
neglected.
This bird was the dodo.
A Niche can be based on:
• A new product or service.
• A new product or service in a particular area.
• A change in a particular product or service to
focus on a sub-group of customers.
• An existing product or service, but in a new
area.
Niche examples:
•
•
•
•
A
Heatless
new product
soldering.
or service. Heatless soldering
A
Chem-dry
new product
carpet
or cleaning.
service in a particular area.
Chem-dry carpet cleaning
A change in a particular product or service to
focus on a sub-group of customers.
Kalani Coffee
• An existing product or service, but in a new
area. Espresso Stand in Houston
Finding a Niche
Value Chain Analysis
Value Chains are a visual depiction of an industry from
producer to consumer. Coffee business:
Farmer > Wholesaler > Roaster > Retailer > Customer
So what are some possible places where we could
enter the value chain?
Life of a Chair
What is a
Unique Selling Proposition?
It’s what makes us stand out from competitors
within our niche.
The search for a niche is connected to the
“unique Selling Proposition” because often it is
the USP that provides the feature that makes us
different or unique; that lets us slip into an
existing niche easier, or that helps create a
whole new niche.
Examples of the
Unique Selling Proposition
• 30 minutes or less
• Pay me now, or pay me later
• Oil change in 20 minutes.
• 60 minute tune up.
• 7 – 11
• 24 hour fitness
• 90 days same as cash
• Rent to own
• Organic
• Unfinished furniture.
Spanish Language Qwest Site
Second hand Stores
StartUp Journal Ideas
Entrepreneur.com
Join A Group!
How to Create A USP
What is A USP?
Group Work on Ideas
Without speaking, organize yourselves
around the room in order of birthday.
Group in fours based on the above, and find
seating for your group.
Discuss possible business ideas
for 25 minutes.
List your top three ideas, and be ready to
report to the class (choose a spokesperson).