Is It Time for You to Find a Niche?
Who should listen: Entrepreneurs who need to understand how to best niche their business, and who need reassurance that niching down is a sound and profitable business plan.
Key idea: Understand your market, and nurture your sphere, and you won’t lack for referrals.
Action item: Support your relationships with the people in your sphere by recognizing their birthdays with a simple gift.
Every now and then, it’s a good idea to stop and take stock of your situation. Reflecting on where you’ve been, where you are, and where you want to go, can refresh your perspective and give clarity to your circumstances.
Apply this assessment to your small business, and you may discover that instead of living a life of freedom that being your own boss was supposed to provide, you’ll find yourself stretched in all directions—trying to be all things to all people.
If this describes your state of affairs, then it may be time for you to specialize your services, narrow your client base, and find a niche for your business.
How to know when it’s time to niche down
When you first started out as an entrepreneur—whether it was as an agent, a financial advisor, or other professional—it may not have made much sense to find a niche. Just starting out, you likely needed as many clients as possible to get up and running, and as long as someone was willing to pay you, you took them on. But now that you’ve been in business a few years, it may be time to rethink that strategy.
There are many opinions about whether you should, when you should, and how you should niche a business, but, of course, the decision is yours to make. Even so, it may help to consider what others have to say about the matter.
Independent marketer and branding specialist, Amy Caiger, suggests there are five reasons why you may want to niche down your business.
- You need to differentiate yourself on something other than price.
- You want to be regarded as an expert in your industry.
- You want to attract a specific type of client.
- You aren’t confident in precisely what your business does.
- You are confused when making decisions about who to work with (everyone), the jobs to accept (all of them), and the marketing you need to do (as in, talk to everyone and you end up talking to no one).
There are more reasons to find a niche:
- Niching down can be more cost-effective since your marketing budget can be used to more effectively target an audience who will likely be interested in your product or service.
- When you find a niche, you can cultivate a loyal client base who needs your product and will connect with your brand.
- When you niche down into an area that is your strength, you can continue to develop and improve your skills and offer your clients the highest-quality results.
- Finding a niche can make your marketing more effective because instead of trying to speak to everyone, you can speak the language of a clearly defined subset of clients with a clearly defined set of pain points.
- Depending on how narrowly you define your niche, you can dramatically decrease your competition.
If you currently love what you do, if you view your current situation as an opportunity to gain experience, or your business is doing well, then there may be little reason for you to find a niche. Don’t force it.
Specialists earn more than generalists
For many, the money you can make as a specialist is reason enough to pursue a niche market.
Tom Hegna, a retirement advisor and author of several books, including Paychecks and Playchecks: Retirement Solutions for Life (#ad), and a previous Stay Paid guest, firmly believes that if you want to get rich, then you should find a niche. His own niche makes him a respected advisor and in-demand speaker.
But you might wonder how fencing off thousands of potential clients could possibly earn you more money. More clients, more money. Right?
Well, let’s think about it for a moment . . .
You’re familiar with the law of supply and demand—the lower the supply, the higher the demand and the price. If you are the only or one of the very few who provides a service or product that a defined group of people need, then you can charge pretty much whatever fee the market will support. (Just ask anybody willing to sell their home in 2021.)
How to find your niche
If we’ve piqued your curiosity about possibly finding your own niche, a simple internet search will provide you with resources you can consult to point you in the right direction and help you conduct your niche research. But to get you started, we suggest you listen to Stay Paid episode 163 featuring Marty Neumeier.
Marty is the acclaimed author of several books, including, The Brand Gap: How to Bridge the Distance Between Business Strategy and Design (#ad) and Zag: The Number One Strategy of High-Performance Brands (#ad). During his interview, Marty explains what being “the only” can do for your business and how you can “invent” a difference that will set you apart if one doesn’t readily present itself to you.
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