Mark Lazarchic

It’s not the size that matters…..

 

“What made you think you could make any money doing that?” I was asked for about the 600th time in my life this week.
When I started Renaissance Fireworks 10 years ago I told everyone my idea. You would think I was killing it at open mike night at the comedy club. I am not sure anyone but me and my wife believed I could make a living selling fireworks 2 weeks a year, let alone make it into a business.  The first year I almost lost my belief. Thank goodness my wife didn’t. A year later I quit my full time job and became a full time boss-type person. I went back and worked from time to time in sales but after 3 years I never worked for someone else again.
Almost two years ago I noticed a small market for wedding sparklers. We tried a few things here and there and threw some money into it. In two years we have built an online wedding sparkler store into a business that had over 6000 orders placed in 2012 and in 2013 we are looking at over 10,000.

Now we are on the verge of launching a software system designed for small business and even mid-sized if they ask nice. It is not designed for large corporations and maybe we will let them use it, maybe not.
So why all the focus on small markets? Why not go after the big fish? Why why why you say? Because that is where everyone else is fishing. You can now plainly see my Minnesota coming out as I use fishing to explain this. Imagine a big round lake. Now imagine your family only eats fish. (I know but bear with me here)
Now there is a fishing guide that knows where every fish in the lake is. He tells all the fishermen the BIG ones are on the west side of the lake. Not very many but if you land one it will feed your family for a month. On the East side of the lake are small fish. Each one might be a meal for 1 person so you will have to catch a lot of them and probably fish every day to feed your family. They are easier to catch but of course much more effort and commitment. SO, 20 fishermen line up on the shore every day to go fishing. Where do the majority go? They go West. They go West because one big fish will feed their whole family for a month. They just need to land that one big fish……
I go East.
I consider myself a niche market expert. Most business owners want everyone and everything. They ignore small markets because it just does not generate enough in sales or income they sale. Bullshit. If you know of a niche market, that lets say is rather small in the business world. Maybe the entire US market for that niche does 4 million dollars. Now bear with me, that may sound like a lot of money but in market size it is a pimple. 50 states and for simplicity sake lets divide it equally. Thats $80,000 in each state spent on that niche. What that means is that if you set up a brick and mortar store and captured 100% of the sales in your state your business would have sales of $80,000 a year. If eating cardboard and living in your store is your thing that works. So what you have is a market so small that no one will specialize in it and it will only be touched on the fringes.
“What about the internet” screams the person not locked in a closet for the last 10 years. Sure with the internet you can reach anywhere but it is still considered a small market to most. Market penetration on 10% is considered a dream by any company and that still only has your business at $400,00 a year. Only……..How many $400,000 a year businesses do you need before you are killing it? What if you had just one and it was all done by just you?
What if you looked at that 4 million dollar market with different eyes and said instead of trying to compete with everyone for the 4 billion dollar market I will just go own 80% of that 4 million dollar market?  Seriously….why not?
No one else will put in the effort to own that market in most cases. There will be people picking at it here and there but no one will go after it because they do not see the value. I do. If you own a market then it is yours.

So this is my clumsy way of saying while all the other guys are chasing the big fish I will GLADLY be the guy scooping up all the little ones every single day of the week. I’ll also be the guy that can say he owns a market. or two…..or three….or…..

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