Some businesses maximize their earnings by working with clients “a mile wide and an inch deep.” Other businesses benefit tremendously from inversing that adage and working “a mile deep and an inch wide.” If you and your business excel in one target market above the rest, it may be best to throw your resources and efforts behind becoming an expert in that field rather than pursuing too many disparate markets.
One of the best parts of refining a niche is the momentum it allows you in new business development.
Here are two important questions to ask about your business to figure out if a niche is best for your company:
Who are you working with?
If your answer is “everybody,” be sure to question yourself about that. Maybe it’s true, but in most cases narrowing in on a target market can offer significant benefits such as the ability to refine marketing material and techniques.
Keep in mind that clients that come back for repeat business also serve as the basis for your budding expertise. Surely, their competitors could use someone just like you. Do your research to find those companies and arrange some pitches. Once you accumulate a few clients in a specific field, you can start highlighting your experience to others. One of the best parts of refining a niche is the momentum it allows you in new business development.
Who do you want to work with?
Do you have a dream client that seems a bit off the beaten path? That unusual route can become your company’s path as you move closer to doing business with that client. Remember, the topics that you’re passionate about are often the ones you excel at. Imagine your interests inspiring you personally and professionally and paying off financially. Win-win-win!
Pursuing one niche can lead you to additional business prospects. As one industry client multiplies to two or more, looking upstream or downstream within that same niche can yield more opportunities.
Despite the benefits of carving out your industry niche, remember to retain some diversity. Putting all your eggs in one basket is still a dangerous business practice. For example, as my company carved out a niche doing high-end customized projects in stainless steel in the pharmaceutical industry, we used our existing client base, know-how and tools to offer rigging services and became a sales representative and installer of a R&D-grade automated door company. With our existing niche clients, we diversified to offer more of what they needed, even though it was a slight variation on our specialty.
When establishing a niche it’s also important to develop the ability to say no. Inevitably, requests will stream in that could get you off track. Stay the course. Otherwise, you risk being something (and probably something not very good) to every client rather than everything to some clients. Some companies or industries are riper for niche work than others. After all, the whole point of being niche is that it’s not a one-size-fits-all solution. In the right industry and for the right company, a niche can be a sweet spot that keeps on giving and is definitely worth considering.