The riches are in the niches

Share this...
Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone

David Attenborough was one of the most respected British naturalists, presenters and TV personalities of all time. His voice and presence in literally hundreds of nature programs continues to educate and delight all of us.

There was one thing Sir David did that captured us in his nature programs – his technique for focusing in on one tiny detail. Rather than trying to tell about all the beautiful and wonderful things that surrounded him, he would kneel down on the forest floor and focus in on one small flower, or insect or plant, and fascinate us with the small details that made that particular object so interesting.

Just like Sir David focused down on the minutest detail, we need to focus on one thing to build a valuable business. This is called niching down.

What does it mean to niche down?

In business, niching down means to focus on a small but well-defined segment of the market. Rather than try and be everything to everyone, we choose a niche where we are – or can become – an expert.

The dictionary defines niche as:

denoting or relating to products, services, or interests that appeal to a small, specialised section of the population.

The keywords here are small and specialised. The keywords help us understand niches – and why they should be so attractive to solopreneurs and small business owners.

The first keyword is small. By definition, a niche market is small compared to other segments of the market. This means that big players do not play so easily in that niche because it is not big enough for them to justify the cost of playing in that niche.

But small is relative. A market that is too small for a big player to enter is more than big enough for many experts to make their own.

The second keyword is specialised. To play well in a niche, you have to be an expert in that niche. This is where solopreneurs and small business owners can beat the big players at their game. When you become really expert at something you are doing what the big players can’t do – because their markets are wider and bigger they have to be somewhat good at all of it – but they can’t be expert at every niche. So you have a distinct competitive advantage over even the big players.

So niching down means focusing on a relatively small segment of the market, and becoming an expert in that area.

Why is it important to niche down?

A couple of years ago we did some renovations on our house. In one outside wall, we had closed up what was a window (to create a bigger window on another wall), and the closed-up area had to be patched up so that it looked like the rest of the wall.

Through a friend we managed to find an old gentleman who specialised in repairing the style of stucco we had on the wall. He came in, gave us a quote (which was quite reasonable) and fixed the wall so that we couldn’t tell where the opening had been. He’s probably one of the few remaining craftsmen in the city that can do this kind of work.

Finding him took a bit of research, but getting the quality result he delivered was worth every minute and every dollar we spent.

When you niche down you immediately have a number of things playing in your favour:

  • It’s easier for potential clients to find you. When I look for “roofing contractors in Calgary” on Google, I will find contractors who specialise in roofing in the city where I live. I could even narrow that down to “shingle roofing Calgary nw” which will find contractors who do shingle roofing in the area where I live.
  • It’s easier to find potential customers. The more specialised (niched) you are, the more well-defined your market segments becomes. You can more easily target them in marketing campaigns, advertising and on your website.
  • It’s way easier to become an expert. When you specialise in a niche, you can become an expert much more easily than trying to be a lot of things for a lot of people.

Every business – irrespective of its size or reach – has to contend with competitors. Being a solopreneur or small business owner means that you have to compete with the big players – and if you try to compete with them on the same playing field you will lose every single time. They will beat you in marketing, pricing and range of products or services.

But when you specialise, you’re doing something your big competitors can’t do. They have too much overhead to become a specialist in your small area of the market – so you can compete effectively in that small area of the market.

How do I choose a niche?

There are various ways in which you can choose a niche:

Specialise in a technology:
The least desirable specialisation is in one or more technologies. Software developers expert at specific software technologies have a valuable expertise – but that expertise has a number of problems:

  • Technologies come and go. Some 20 years ago I used to be expert at some pretty niche computer stuff – but those technologies are no longer in use today. To remain an expert, you have to continuously learn the latest and greatest.
  • You’re still competing with lower-cost technology specialists. The Internet has broken down a lot of barriers to doing business without having to be physically present – and you will find yourself competing with experts in countries where you are just not price-competitive.

Specialise horizontally:
When you specialise horizontally, you become expert at solving a similar problem across a wide range of industries. For example, becoming a “leadership consultant” means you have a very wide and large market. This is great, but you have some problems to deal with:

  • You’re not expert at any specific industry. Although you can consult in any industry, each industry has its own nuances, inside knowledge and industry expertise that you need to deliver effectively. Without that expertise you have to learn about the industry every time you enter a new one.
  • Presenting yourself as expert is more difficult. Your clients have a specific business vocabulary, and if you don’t speak their language it is a lot more difficult to present yourself as an expert.

Specialise vertically:
When you specialise in a narrow vertical you’re closer to the small, specialised market where it is relatively easy to become and remain an expert.

The most attractive thing about specialising vertically is that there are so many verticals to choose from. For example, the North American Industry Classification System (NAICS) lists almost 16 million businesses in the USA alone across 20 major industries. When you drill down into Professional, Scientific, and Technical Services you will find some 2 million businesses, and drill down further into Administrative Management and General Management Consulting Services to find 182,000+ businesses.

How do you niche down?

Niching down is one of the scariest things you can do as a solopreneur or small business owner. The biggest fear is that you’re going to lose business because you’re too specialised – but as it turns out that fear is unfounded and in fact the opposite happens.

But how do you start niching down?
It all starts with choosing your niche. This is of course a lot easier said than done, but if you’ve been working for any period of time you probably already have some idea of where your potential niches are.

You may already be an expert in some area, or your career has already taken you in a certain direction. You may have a specific liking for a topic or a burning desire to solve a certain problem. Or, like me, you may be frustrated with the state of affairs and want to do something about it.

However you start, you need to choose your niche so that it is:

  • relatively small;
  • very well defined;
  • an expensive problem for your target audience; and
  • one that they’re able to pay for.

OK, so I’ve chosen my niche – now what?
You now need to start positioning yourself in the market. Your website, marketing material, advertising – everything your target audience will see needs to be changed to focus just on that market segment.

You also need to decide what your offerings are going to be. If you’re providing a service you should be looking at (re)defining your services; if you’re in the retail sector you need to clearly identify what you’re going to offer to your buyers and how that stands out from the competition.

Then you need to crank up your marketing machine. You need to speak on your topic of expertise, write articles, get known as the expert in your chosen niche. As your fame increases, so will the number of enquiries for your services or products.

How long does this take?
This is not an overnight process. To become known as an expert and completely switch over to your niche market will take anywhere from 6 months to 2 years. Take this into account when you’re contemplating jumping in – and make sure you have enough of a safety net to keep you going in case it takes longer.

But won’t I lose business?

This is the single biggest fear and obstacle to niching down. Right now you’re doing work or delivering product to a wide range of clients in a variety of industries or situations. Niching down means you’re going to lose some of them, right?

In practice this fear is not realised very often. While you may lose some potential clients, the upside I’ve seen for just about everyone (including myself) is that it is now easier for your target market to find you, so very quickly you actually have more clients that you had before you specialised.

And specialising doesn’t mean that you don’t have clients from outside your niche knocking on your door. I’ve specialised in solopreneurs and small business owners in service businesses – but I also work with clients in the construction business and consumer retail. These clients have heard of me through one of my marketing channels, and they asked if I “also do this”. When I can help them I do – and when I can’t I try to find someone who can.

Examples of successful super-niches

Here are some great examples of people I know who have specialised in some very specific niches:

  • Jonathan Stark specialises in mobile strategy for credit unions. His website is also a powerhouse example of great marketing.
  • Kurt Elster and his team “turn your Shopify store into a Revenue-Generating Powerhouse of Persuasion”.
  • Anthony English helps IT specialists become highly valued consultants running their own IT service businesses.
  • Hydraforce makes high-performance hydraulic cartridge valves and electro-hydraulic control systems.
  • And then there’s me – I help solopreneurs and small business owners in service businesses build solid revenue streams.

Your niche does not have to be super-sexy or ultra-exciting to outsiders – it just needs to be specific enough for you to build a business solving a small set of problems for a well-defined target market.

Summary

I walked over to a coffee shop half way through writing this article – and as luck would have it I found this truck standing outside:

This is a great example of specialisation in the construction industry – and good luck finding them on my coffee run!

So let’s summarise this article:

  • Focusing on a well-defined niche is one of the keys to building a valuable business.
  • Finding your niche is not difficult but does take time to develop.
  • The fear of losing potential clients is one of the biggest obstacles to niching down – but the fear very seldom becomes reality and often the opposite happens.
  • There are many examples of highly specialised businesses you can take inspiration from.

David Attenborough captured our attention by focusing on one thing

When you next watch a program hosted or narrated by David Attenborough, take note of how he goes from the broad picture down to the finest detail to capture our attention. Sometimes called the Attenborough effect, this focus on detail is one of the hallmarks of his style, and something we can adopt in specialising our own businesses.

What you should do now

If you’re not yet specialised, the holidays may be a good time to take some time out to reflect on what niching down can mean for your business. How would your business (and your life) change if you specialised in a very specific niche? Could you become an expert in that particular niche?

Keep an eye on the Britewrx newsletter for upcoming announcements of products that will help you niche down. If you’re not yet subscribed you can do so here.

Share this...
Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone

Comments are closed.

Proudly powered by WordPress | Theme: Baskerville 2 by Anders Noren.

Up ↑