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For example, Larry Klein discovered his target market from the inside. A successful financial advisor, he retired from his primary job and became a marketing guru to other financial professionals. He knew they needed several kinds of marketing help, but as he talked to them and worked with them, he discovered that what they wanted most were ways to reach seniors.

Klein explains, "I'm not yet 60. So, you don't have to be a member of your ideal marketplace. But if you talk to enough people in that market group, you're going to get it. You have to be awake and aware and be listening for what it is.

"All the information you need to target and succeed in an ideal marketplace is out there waiting to be found," says Klein. "You can take the guesswork out of building a business."

Having talked to enough seniors to understand their needs, Klein refined methods for approaching them with investment opportunities. Now he offers seminars, writes articles about these strategies, and acts as a consultant to former colleagues. You and I may not have heard of him, but within his targeted sector of the financial planning community, Klein is slightly famous.

Large companies aspire to total market domination. Small businesses with a slightly famous strategy flourish by establishing themselves within a carefully selected segment of a market; they target a market niche that they can realistically hope to dominate.

Market niches can be defined by region, by special customer needs, or by demographics, such as a particular ethnic or age group; sometimes a market niche can be generated by a product that's a variation on an established one. (Interestingly, the word niche, which comes from French, means "nest." As a small business you want to build your nest away from the hawks of big business.)

In a crowded marketplace, it may not be enough just to carve out a niche. You've narrowed your focus, but you still have competitors. This is the time to distinguish yourself as the pre-eminent source of solutions by refining your expertise. You need to know more about something, or be better at something, than anyone else, and you have to let people know.

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