I returned late last evening from New York City. My last day in the city was Sunday, and with several commitments, I needed to move quickly, so I utilized the subways. On each of four trips, I became a "customer" for a small business.

The subway rides were taken on an express run, so the stops were less frequent, and each of the small businesses had time to "work their market and customers" — the captive riders on the trains. The four businesses were: a young man selling fragrances, a saxophone player, a lady selling DVDs and two young men who tumbled, balanced on their hands and did some pretty remarkable gymnastics stunts on a moving train.

I did not buy any of the products, but I was impressed with both of the service providers and paid for the entertainment, so I guess that you would say that 50 percent of the companies were successful with me as a customer.

I relate the above to emphasize the importance of understanding your customer and what the customer needs or wants. I did not go to the subway to buy anything — I just wanted to get to my next appointment on time and without a lot of hassle. What I needed was something to pass the time, a diversion from the monotony of looking out of the train windows at black tunnel walls as I progressed from one stop to the next. My associate and I enjoyed every minute of the entertainment and talked about it several times during the day.

In the parlance of marketing, we label this market identification as "finding a niche" — defining a part of the market where you can differentiate yourself from the competition and the noise and clutter of the marketplace and hopefully make a sell.

Some common characteristics that you should look for in a successful niche are:

• Customer Profile: Who is the target customer, how do they decide to buy, and what influences the buying decision?

• Market Size: The segment of customers should be large enough to enable you to be profitable.

• Uniqueness: Customers see themselves with different requirements, having special needs that you are fulfilling. You also want to assess the key competitors and identify your strategy to differentiate yourself in the market.

• Accessibility: You need to be able to find the customer, and they need to be able to find you at the lowest possible cost, and you need to be able to deliver your product or service cost effectively.

• Sustainability: Find a group of customers who can help you build the business over the long term. Recurring revenue businesses are often better than businesses that satisfy customer needs with a one-time purchase.

Many budding entrepreneurs become so excited about the product or service they have invented that little time is expended on developing a plan to find and deliver it to the customer. Take the two young tumblers I encountered on the subway, as an example. During the previous three days, I had passed several entertainers who were dancing and performing on the streets of New York City. Each time I passed by, without pausing to enjoy the talent or to make payment for the service. I would guess that the street performers were as good if not better than the young men on the subway, but they were not delivering the service to me when it made the most sense.

But on the subway, I had time and the setting was unique. On the street, I was busy, the marketplace was noisy, and I had seen street performers many times before. These train performers had done their work — the customer profile was right, the service was unique, the market size was just right (they would move to the next train car at each subsequent stop), and the customer was accessible. In fact, the customer was captive.

The above example is perhaps an oversimplification of a complicated process, but it is illustrative of what an entrepreneur needs to do to be successful.

And by the way, almost everyone on the train purchased the entertainment service. The young men's baseball caps were full of money.

Customers found!

Gary Williams is affiliated with the BYU Center for Entrepreneurship. He can be reached via e-mail at cfe@byu.edu.