The Power of Niching for Small Businesses
Why should I niche in business?
How would you like to do the work you love, providing your best service or product at a premium price to your ideal clients? When you discover your niche, that is exactly what you can expect to do in your business.
A lot of business owners are probably confused about the difference between niche and target market. A simple way to separate the two is to think target market is about who would value your services (external factor), while niche is about what value you bring to the table and how your clients perceive you (internal factor).
What is my niche and how do I find it?
The Hedgehog Concept is based on an ancient Greek parable that states: “The fox knows many things, but the hedgehog knows one big thing.” Your niche is your “big thing”. You know it well, you know it deeply, you are extremely good at it, you are passionate about and it is the economic engine in your business.
So, ask yourself these questions:
- What do you love to do and passionate about?
- What are you really good at?
- What drive your economics engine?
Your niche, should lie at the intersection of these three areas for optimal result. Having only two might not be good enough as it probably won’t last the distance when the time gets tough.
Don’t rush it. Your niche might take time to emerge and it can also change over time. Input from clients and fellow business owners will also have an impact on what you decide to be your niche.
Networking with other business owners, particularly those in the same industry as you, can be valuable in showing you your uniqueness and special talents. There are thousands of dentists and doctors out there, but there is only one YOU, and who is better at being you than you are?
Who should niche?
Not everyone needs to find a niche. If you are an established business with a good reputation, a large corporate organisation or someone who is content with their business growth, then niching probably isn’t for you.
On the other hand, if you’re:
- a professional in a highly saturated market such as a dentist, physiotherapist, or a accountant
- in a profession with a low barrier to entry such as a copywriter or web designer, or
- a new business who wants to stand out,
then you will definitely benefit from niching.
What are the benefits of niching?
The main benefit of niching is that you stand out from the crowd. You become a specialist, rather than a generalist and are therefore more memorable, more remarkable and can charge a premium rate for your services.
You will avoid being seen as a substitute with other providers, which means price won’t be the only thing that sets you apart. You will attract more clients who know that you really understands them because you work only for people like them with their specific needs and requirements. They will be more likely to refer you because it is so clear to them why YOU stand out.
For example if you’re a massage therapist whose niche is pregnant women, you will get plenty of referrals from your clients who will know other pregnant women, who are either friends, family, colleagues or someone they’ve met at ante-natal classes.
Having a niche will also give a much clearer focus to your business. You will know exactly where to concentrate your learning and investment, who to network with and where to look for strategic alliances.
Being clear about your niche makes marketing and advertising much easier. It is easier to sell a very specific product or service, than something general of which there are thousands of providers for. You will also find it easier to find your ideal clients because you don’t have to look EVERYWHERE.
Can I be TOO niched?
One of the simplest thing you can do is use Google Adwords keywords planner to figure out if people are searching for what you’re offering. If all the services you are offering are getting less than 50 searches per month in the area that you service, then maybe you have gone a little too narrow with your niche. Maybe consider supplementing it with a few other additional services to find the right balance.
Remember, having a niche doesn’t stop you from providing services outside of it, if that’s what you choose to do. Just because your niche is massage for pregnant women, doesn’t mean you can’t offer remedial massage to men (as long as it still satisfy the hedgehog test). You can also consider offering seasonal based services (such as offering teeth whitening prior to Melbourne Cup) as special promotion.
The final word
Niching can be a great way to start a business and build a reputation. If, some time down the track, you want to expand your business focus, then you can always do that. For example, Tony Robbins started his coaching career by working with people who were afraid of spiders. And look at him now!
The biggest benefit of niching is that you get to choose what you want to do and who you want to work with. If that also happens to be something you love to do and are passionate about AND there are people out there who are prepared to pay for it, then you and your business will thrive.
Have you used niching in your business? How has it changed your outcomes? If you’re still a health professional and am unsure about how to get started on your business niche, feel free to contact us directly for a free consultation.