Is Niching Down Right For You?
If you are a solopreneur or small business owner, you have probably heard of the importance of niching down to grow your business. However, you probably have concerns about niching, and wonder if it is right for you.
The fear that comes with niching down is understandable. You have a business to grow, and you wonder if having a niche will make it more difficult for you to build your business. This fear most likely stems from the fact that when you first launched your business, your top priority was getting clients. Niching down seems to be the opposite of that. But in reality, niching down can actually help you get more clients.
One reason for this is that when you don’t have a niche, you are trying to sell everything to everyone. This means your products and services are more common in the market. In other words, you have a lot more competition, and this makes it more difficult to get clients.
Not only does increased competition affect the ease with which you get clients, it also impacts your pricing. Basic economic principles of supply and demand tell us that with increased competition, prices go down. In contrast, when there isn’t much competition, prices go up. Therefore, if you create a niche for your business, you will most likely have less competition, and the value of your products or services will go up.
Another reason you may consider niching down is that as your business grows, you may find that you develop a thorough working knowledge of a specific skill or industry.
Creating a Market Niche
If you’re considering niching down, but don’t know where to start, first ask yourself if you want to create a market niche, or a product or service niche.
A market niche refers to choosing a specific market with which to work. Suppose you are a website designer and you choose to specifically work with artists, or the art industry. This would be an example of a niche market. When you do this, you communicate to your audience through marketing and messaging that you only work with artists.
The benefit to taking this approach is that you will attract your desired audience. The drawback is that you might alienate potential clients who would actually be a great fit for your business. If you are concerned about creating a specific niche market, a compromise could be choosing creatives as your target audience instead of just artists. Your ideal market still fits in this category, and you can continue to market specifically toward artists, but your messaging is broad enough to not deter other clients who might still be a good fit.
While you can state on your website, or in your content, that you work with artists, you can choose to communicate this visually instead of verbally. For example, if artists were your target audience, you wouldn’t have a website that looks like a law firm website. You can market to artists through design rather than through words. When doing so, you attract your niche market without alienating those who could be good clients, but who aren’t artists.
Important to once again note is that when you market yourself within a specific industry, it doesn’t mean you only work with that industry (though it might). You can still choose to work outside of that industry. It only means that your marketing efforts are focused on that industry.
Creating a Service Niche
While defining a niche market is one way to niche down, it isn’t the only way. You can also choose to niche your offerings. Perhaps when you first launched your business you offered many different services. Over time, you realize that some services aren’t worth offering, either because they have low profit margins, they take up too many resources or too much time, or you simply don’t enjoy them. You can choose to niche down your services to the ones that are most enjoyable, take the least amount of resources, or bring in the highest margins.
Creating a niche around your products or services instead of your market, allows you to serve a much wider audience. However, your specialty will differentiate you from your competitors, and might make it easier for you to get clients. One of the drawbacks of offering too many services is that your potential clients may not trust that you can do a good job. They may think if you offer too many services, you won’t do any of them well.
Which Method is Right For You?
If you are thinking of niching down in your business, and you aren’t sure if you should create a market niche or a service niche, you can book a discovery call with me and we’ll discuss if niching down is right for you, and if so, which path makes the most sense for you and your business.