Wondering how to spot a gap in the market? Whether you’re looking to expand an existing business or start a new one, you’ll need an idea that’s going to set you apart from the competition.
First you’ll need to spend some time researching your idea. Where is there a gap in the market? What can you offer that’s different to other businesses in your area – or how can you do it better? Our seven-step guide will help get you started.
What is a gap in the market?
A gap in the market is a business opportunity. It’s when you’ve identified something that customers need, but it isn’t currently available.
This could be something that’s completely unique, an improvement on an existing idea, or a way to introduce something to a different market.
Tips for identifying gaps in the market: a step-by-step guide
1. Play to your strengths
It may sound obvious, but it’s no good finding a gap in the market if it’s something you have no skills or knowledge in. You’re going to need plenty of drive and determination to make your idea a success, so it has to be something that makes you want to get up in the morning.
Write down everything you’re good at, from career-related skills to interpersonal skills like negotiating and organisation. Now you can think about how to use these skills to solve a problem or improve an existing business idea.
2. Step into the mind of a consumer
One of the easiest ways to understand what your customers, or potential customers, need is to talk to them. What are the challenges they face? What would make their lives easier?
It might be that your target market is a group of people that you identify with through direct experience, for example as a parent with a baby clothing business. But even if you don’t have first-hand experience, make sure you take the time to get to know their needs.
3. Research market trends
If you’re looking for a new idea for a product or service, you can find inspiration by seeing what’s trending.
Here are a few things you can try:
- Google Trends is a great way to see what people are searching for. You can explore real-time data and location-based trends, but bear in mind it’s limited when it comes to niche ideas with lower search volume
- head over to any of the social channels for trending hashtags, check out suggested content on Facebook, Instagram and Twitter, or explore the Discover pages on TikTok
- if you’re looking for an idea for a new product, you can research some of the bestselling items from online marketplaces such as Amazon, Etsy and eBay to see what’s popular right now
This research is an important part of creating a business strategy, and you’ll probably want to do a SWOT analysis of your business to understand external (and internal) factors that could impact your success.
Our interactive SWOT analysis template is free to download and use for your business.
4. Take a global view
Have you ever travelled somewhere and discovered exciting street food and wanted to introduce it back home? Or maybe you’ve seen an inventive use of technology that hasn’t been thought of by businesses in your area?
Before you get too excited about bringing roller skates to the highlands, make sure you consider why something might work in one country and not another. Think about whether it’ll be more challenging to access the materials, costly to make, or if people will even be interested in the idea.
5. Find inspiration from an existing idea
It’s pretty unusual to come up with a completely original idea, but you do need to be aware of copyright laws. That said, there’s nothing to stop you taking inspiration from a business and adapting it for a new market.
A good way to understand what your competitors are doing is to visit trade shows and do market research as part of writing your business plan. You never know, you might just have the skills needed to improve something or find an inventive use of technology that’ll make a process more efficient.
6. Solve a problem
The coronavirus pandemic showed businesses adapting to changing consumer needs very quickly. And while this was a huge global challenge, there are always going to be changes in the business landscape that you’ll need to keep up with to stay relevant.
The more you can be aware of challenges faced by your customers and your industry, the better chance you have of finding innovative solutions to problems.
7. Be aware of new legislation
Keeping on top of legislation in your industry is important as it could uncover a demand for something that wasn’t there before. For example, the Covid-19 restrictions on socialsing indoors meant more businesses were looking to create comfortable outdoor seating areas to attract customers.
A good way to stay up to date is to join industry associations, sign up to relevant newsletters and set up Google Alerts for keywords related to your business.
Be clear on your purpose
Purpose. Big Picture. Brand story.
Whatever you call it, this is the reason behind why you do what you do. Once you’ve found a gap in the market and know what your business is going to do, you need to communicate why your business exists and bring your customers along on that journey.
Is there anything else you want to know on how to find gaps in the market? Let us know in the comments.
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