Niche markets can be profitable or very risky. In most cases it takes planning, guts and innovation. This paper discusses some key factors in niche markets and actual business start up challenges. The company Urban Outfitters is reviewed, looking at how this company started out in a “niche market” becoming very successful.
The article that I reviewed, discusses Urban Outfitters and how they were able to enter into a “niche market” and develop a business that has taken off and become very successful. Merriam-Webster online dictionary define niche as, “a place, employment, status, or activity for which a person or thing is best fitted” (http://www.merriam-webster.com/dictionary). A business that focuses on a niche market is addressing a need for a product or service that is not being addressed by mainstream providers (Lockhart, 2008). Urban Outfitters began as a very small three person ran store. The initial investment was $5000.00. The niche that the store was attempting to satisfy was providing unique items and inexpensive clothes to college kids.
Identify at least three challenges when setting up a business. Explain why they are challenges.
I think the three of most important challenges when setting up a business are: risk, financing and motivation. In most businesses there are risks involved. These risks can break a company very quickly. A lot of us have good ideas but are not willing to take the risks. In the Urban Outfitters case, it was noted that this business began virtually risk free. This is normally not the case with most other businesses. However, most successfully business people are willing to take the risks. Niche markets may or may not present greatest risk. The unique nature of “niche” products could present great risks but at the same time if you are in the right “niche” you can realize great success.
Another challenge is getting money together to start a business and if your business is not doing well you will...