Five reasons to niche your business from the start
Five reasons to niche your business from the start
Niching is critical today, but why?
Chances are you’re entering a market where you are not the only player. Even if your market is quite new there will be other companies out there doing what you want to do. And in a more established market this is inevitable.
While it might feel sensible to cast your net wide in the search for customers and clients it’s actually a dangerous strategy.
Knowing your customer means you know where to look for them
The internet gives you access to a much wider audience than a leaflet in the post office window. Even if your business is very local, you can access hundreds if not thousands of people who live within 20 miles of you if you connect with them online. If your location is irrelevant you have access to the whole world potentially.
How many customers do you need? Marketing guru Seth Godin recommends you identify a niche with the minimum viable audience. What is the nichest niche you can occupy where there are enough customers to fill your books but that you can also dominate and specialise?
If I was escaping the rat race a second time I would really research niche markets and find one that I found interesting and thought I could help AND that was small enough I could really dominate. You want to be the person people think of when they think of that market need.
You can become deeply knowledgeable
It’s been 20 years since I escaped the rat race! And I would say I became really knowledgeable about leadership (the topic I speak on at conferences) about 10 years in. That’s because as well as coaching leaders I was also coaching entrepreneurs, teams, single women, authors...I just couldn’t settle on a specialist area.
Had I decided at the start to focus on leadership and, perhaps, gone even more niche within that niche e.g. Female Operations Directors (randomly!) I could have learnt about their pain, their industry, the key movers and shakers, trends and challenges as well as honing my leadership coaching expertise and I could have been the Go To person for any female Operations Director. It would not have taken 10 years.
Niching makes you more innovative
Everyone talks about ‘thinking outside the box’ but actually we do our most creative thinking inside a box. By that I mean, when you give yourself parameters to think within you come up with better ideas than trying to think ‘blue sky’ about everything and anything.
Let’s say you’re an accountant who wants to focus on family smallholding clients (not just any smallholders but only those who run their smallholding as a family business). How can you target your customers? Where can you market your services? What services could you offer? How could your clients best access your services? How do you price yourself? There are many options because you know your customer base.
Let’s say you’re an accountant who will do accountancy for anyone. Now try to come up with ideas for targeting your customers? It’s overwhelming. You can’t get clever because you have to be generic. When anything is an option, where do you start?
You can broaden out later
Once you dominate in a niche (or a niche within a niche) you can diversify your services if you see another niche to ‘own’ or if your customer base like you and would like you to offer a broader range of services. For instance, if you’re the accountant, your customers might trust you enough to ask your advice about other topics. They might want you to connect them with your network of family smallholders and there might be a product or service you could develop to help them do that. You might notice they have a need in common outside of accountancy e.g. marriage guidance, and decide to qualify as a marriage guidance counsellor for smallholding couples.
It’s much harder to go niche when you’ve started generic because your clients come from everywhere and could be alienated by your new niche. I have two niches - the future of leadership and helping midlife women at a professional crossroads. I have to keep the two things separate which is hard work. If I was starting again I’d pick my niche with more care.
You’re forced to face your fears
Declining to choose a niche is often evidence that you’re afraid you won’t be able to make your business work. You’re telling the world “I will work with anyone” because you think that’s the only way you can make enough money.
When you choose a niche and stick to it you’re forced to face up to your fears. Yes, it’s scary when you escape the rat race and start your own venture. Saying you’ll do anything for anyone makes it worse because you accept the fear and make decisions from a fearful place.
Fear is a bad place to make good decisions from. So if you feel afraid to say “this is me and this is my niche and I’m going for it” the problem isn’t the niche, it’s your fear. And you’ll need to deal with that sooner rather than later.
Experiment with niches before you’re reliant on your business for income
As you start designing your transition plan (how you’re going to transition out of the job you have today in to your new business) make time to play with different niches. Once you have to rely on your income to pay all your bills it’s harder to have the dscipline to turn down work! But while you’re still testing out business models and making a name for yourself, you can afford to take a few more risks.
The How to Quit Your Job - 12 Ways to Transition Course is designed to help you plan your exit from your current job.
The three videos, workbook, questionnaires and daily emails from me will guide you through the thinking and planning process so that you know how you’ll start gaining expertise, getting credibility and testing the viability of your chosen niche before you leave the security of your current job.