I will be very brief and specific with my definition – a niche business is an act of developing a product or service to meet the need of a particular and small group. Nothing more.
As a specialist, you need to look at the client group's needs, which the mainstream providers or service that focuses on this specific client group’s needs fails to address.
What many people fail to realize is that narrower the niche, the stronger your business will be, as long as you choose a niche that is accurate and reflects an authentic need.
There are many reasons why it’s difficult for entrepreneurs to choose a niche. But, greed and fear are the most frequent reason why it difficult for entrepreneurs to choose a niche.
- Wanting to help everyone and not wanting to leave anyone out.
- The thought of making a lot of money.
- Wanting to create a billion-dollar company by serving everyone.
- Most entrepreneurs fear that by choosing to build a niche business, they will make less money.
- Another fear factor is their empowerment and success.
- Wanting to focus on their service and products instead of smart business strategies.
Benefits Of Niche Business
Finding your niche is pretty much the most critical aspect of setting up a business; this is why many new small business owners sabotage their success by stubbornly refusing to focus. I will discuss the benefit of niche marketing below.
1. Make More Money
When you have a niche business, potential clients think of you as a specialist source of knowledge, ideas, services, or products.
This means they are more likely to choose you over a more generic business. And because customers see niche business as specialists, they are often more willing to pay a premium price for what they perceive will be a better product or higher level of expertise than they would get from a broad-based company.
2. Better Business, Better Lifestyle
Those higher prices will result into greater profitability, this makes niche business a better ‘lifestyle business’, not because their owner can earn more by doing less, but also because they can be shaped around personal interests, hobbies or pastimes.
This makes ‘going to work’ a much more rewarding experience.
3. Easy And Cheaper Set Up
A niche business can also be more comfortable and cheaper to set up because you’re offering more targeted products, and you don’t have to carry the range of stock that generic business would.
You can also spend less time trying to find your market since you know exactly where your customers are.
4. Increased Visibility
It is straightforward for a niche business to get visibility because you are focused on a tighter range of products or service than the generalist. Being a niche business also helps your ‘online visibility.’
The greater the concentration of information on the highly specific topic offered on your website means that Google and other search engines will see you as an ‘authority website,’ and therefore one well worth giving a high ranking to.
Another point is that, once you gain attraction in the marketplace, and customers become “raging fans,” then the word can spread quickly to make you an overnight success.
You will get way more referrals because people will know exactly what your specialty is and whom to send your way.
5. Easier To Become An Expert
In a niche business, it is easier for others to understand ‘what you do’ and ‘for whom,’ which will make you an expert in a certain field.
There’s also the chance to become an even greater expert in your area, as you’ll have more opportunity to learn about a smaller market sector than someone who runs a generalized business and who therefore has to spread themselves thinly across many areas.
You can become the ‘go-to’ guru, with a depth of knowledge that makes you the person the media want to talk to – great for PR and to attract joint venture partners who will be drawn to your expertise.
6. Easier Marketing
Niche business gives you an immediate marketing advantage.
A niche business can make attracting customers easier, as you don’t have to resort to mass marketing methods to reach a widely scattered audience. With fewer more focused marketing and communication channels, you know where to concentrate your efforts to the best effect.
7. Less Competition
Niche business gives you the advantage of less competition because you provide specific services or create specific products for specific people in a particular way.
Having considered the above points, I know you will think ‘…I will miss out by focusing on a small group of people!’ You won’t. You can get more clients and serve them better if you narrow your focus and market.
If you create a broad-based business, you may well have more customers, but the likelihood of anyone buying from you is low. The business may have fewer customers, but the chance of them buying from you is much higher.
The philosophy behind niche marketing is not about more customers but more sales.
Niching A Broad-Based Company
If you already have a broad-based business, you can niche it down to have a better result.
The idea is to split your generalist business into niches, create an individual site for each niche while you still retain the overarching business. Even though you’re not running a niche business, visitors will think you are running a niche business.
Another advantage of this is that it gives you valuable ‘business intelligence’ because you can quickly determine which product sell well and which do not.
Even though this means extra work for you and requires additional investment, but the result will be well worth it.
So here is the question, would you rather be the head of a lion or the tale of an elephant?
Wrap It Up!
It always seems like a good idea to be a one-stop-shop for whatever goods or services you render; but considering the resources you will need to put into it, it’s always good to re-evaluate one's strategies and be very specific.
Focusing on a particular group of customers are known to be a great idea both in business growth strategy and marketing. Just look at those benefits above and structure your business for success.
Over To You
So, what are the other advice, tips, strategies, techniques, or methods that have worked for you? Please share with us in the comment below. Believe me; I sincerely value your opinion more than mine. And don’t forget there is love in sharing!