A niche is a focused, targetable portion of a market. It’s not the general market, which consists of all consumers. A niche is a small, specific, portion of the general market.
But the real question is why should you choose a niche? Many small business marketing strategies consist of throwing spaghetti against the wall and seeing what sticks.
They may not understand marketing, marketing trends, or advertising. So they try a little of everything and end up frustrated when they don’t get the results they expect. This chaotic method can be extremely costly and ineffective, especially for self-employed newly registered small business owners who don’t have a huge marketing budget.
So now take a second to think about your perfect client. Right now, stop and think what your she or he looks like. Did you say…
You may have said something like “anyone who can pay me”! But here’s what’s wrong with that.
You can’t be everything to all people! Here’s an easy way to remember that smaller targets are easier to hit: An archery club was practicing. All lined up, each person faced what seemed to be a small target hung in front of a bale of hay. Perhaps if those targets were larger, they would have a better chance of success?
On the archery range, a nice, big target can be easy to hit. But the opposite is true in marketing. Large targets are difficult to hit. The more diverse group you hope to appeal to, the harder it is to catch their attention. So remember, as small businesses, smaller targets are easier to hit.
Here’s an example using a landscaper, who attends a networking event hoping to connect with new customers or get referrals. Here’s what he might say:
And this won’t work. Why?
You can rule your niche, but you’ll never rule the entire market.
People want to work with specialists, not with generalists. They want someone with the reputation as THE guy! They want the best, even if they can’t afford the best.
No one wants to hire someone who says “I’ll do anything for a buck!” And you don’t want to be a “Jack of All Trades, Master of None”! Choosing a niche will help build your reputation as a professional.
You’ll become the specialist, which will increase your brand image. Just remember that narrowing your market will increase your profit and decrease your competition.
You may be thinking that your profession doesn’t have any niche options. But every profession or industry can specialize in a niche. Here’s an example of a masseuse:
If you specialize…
(Update: Another excellent example of specialization is Kieran McCarthy of Colorado Startup Lawyer. His company serves a very specific type of client in a very specific area. Startups in Colorado. That’s what he knows and sticks to!)
No! I’m only suggesting you focus your marketing efforts on a niche, not narrow the focus of your entire business.
Successful business owners can eventually dominate 4-5 niches.
So now we understand why we need to choose a niche, it’s time to find the best niche available. If you are an existing business, you have the option to choose a niche from your existing information. Take a look at your past and current client list.
Let’s say you’re a landscaper. From your client list, you conclude the bulk of your business came from elderly, single women. Why this will work:
But what if you are just starting out? I’m assuming you have some experience in your field, so you can probably make an informed decision regarding your niche. So do your homework.
Research others in your field and take a look at what they specialize in. Gather as much information as you can and choose the niche based on data and facts. Not just a gut feeling.
Although there is no guarantee that the niche you choose will be the most profitable, there are a few guidelines to remember when choosing a niche:
Wouldn’t it be nice to find a niche no one else had? Wouldn’t it be fantastic if you had no competition? But don’t waste your time trying to find a niche that has no competition. That rarely happens.
Instead, don’t be afraid of a little competition. It’s part of the business world and it actually makes you a better business person. It makes you try a little harder to get clients and keep them happy. Let’s say you want to open a dance school, but your area already has 4 established dance schools.
Schools that have been around for a while. What does that say about your area? The market is big enough to support 4 dance schools! The area is interested in dancing! Think about your area.
Consider what aspect of your industry you could dominate. Check out the competition to get an understanding of what is already available, and where you could sneak in and capture a piece of that market. Create a plan for how to dominate – then see it through.
It’s so easy to revert to “Anyone, Someone and Everyone” when your desperate and struggling. But don’t make a marketing decision based on fear and stress.
Breathe and focus on ONE group of potential clients to begin with. Use your marketing time, energy and budget on one niche. Remember, you can always branch out and focus on multiple niches. Start with one, and go from there. A fisherman baits his line with specific bait.
He knows he’s not going to catch every kind of fish with that bait. But he’s not looking for all the fish in the sea. He’s looking to catch one type of fish and has planned it out in great detail.