One of the issues I see new business owners struggle with the most is embracing the fact they need to focus on a target group of customers in order to be successful. When you’re just starting out, you naturally want to be appealing to as many potential customers as possible. Even though every business consultant and magazine says that you need to focus on a niche, it can be hard to accept this advice. In fact, it can be downright scary.

Over and over I see businesses just unable to get over this fear, and continue with bland marketing efforts that don’t really appeal to anyone in particular.

When your client base is minimal and you’re desperate to get the ball rolling with your business, fear of limiting your appeal can be paralyzing. For example:

  • A fledgling photo studio might fear that focusing its brand and marketing materials on kid photography will cause them to lose out on lucrative weddings and corporate headshots.
  • A graphic designer might be afraid that focusing on book cover design will result in losing out on designing annual reports and newsletters.
  • A caterer might worry that specializing in vegan menus will be too limiting.

Here’s the deal: In each of the examples above, it’s true that focusing on a niche might result in fewer other types of clients, and that’s OK. When small businesses try to be everything to everyone, they end up lost in the mix of undistinguishable businesses. By emphasizing your niche consistently in all your marketing and branding efforts, you’ll help set your business apart from everyone else and create a stronger line of communication between your business and its target audience, which is your best bet in attracting actual paying customers. When you don’t focus on a niche, your channels of communication will be diluted and your message will go out much more weakly.

I often think about a student I had many years ago who wanted to start a business making things out of wood. Like, anything made out of wood: tables, napkin holders, toys, bookcases. During the class on defining a niche, we talked a lot about defining who your target customers are in terms of age, gender, occupation, etc. As the students each read their definitions of target customers, her answer was, “Men, women and children, age 2 to 80. Because everyone needs things made out of wood!” Sigh.

I get it: It’s somewhat counterintuitive that to be successful you need to target a narrower group of potential customers. But to break through in a marketplace drowning in marketing appeals and tons of other businesses, you just need to do it. Here are some tips to help you develop a niche successfully.

First, make sure you’re choosing the right niche in the first place. For most small businesses, the best niche will be one in which you actually have some skills or expertise to offer, and you actually enjoy that type of work. Other important factors to consider include whether there are indeed a good number of well-paying customers in that niche, and how many competing businesses are also targeting those specific customers. Any market big or small needs to be evaluated in terms of customers, competition and industry, which I talk about here. If you already have some contacts in a certain niche, that raises its potential as well.

By focusing on a niche, you don’t have to turn away customers who don’t fit your target profile. The graphic designer above doesn’t have to reject a corporation that contacts her asking her firm to design its annual report. And the caterer above is free to accept clients who contact her asking about non-vegan menus. Note, however, if you find that your client base regularly or usually deviates from your target niche, you do run the risk of losing focus. Remember that word-of-mouth is one of the most powerful ways that a business gets attention, and if the caterer is always serving meat and dairy dishes, people will start to wonder why the reality of the business doesn’t match up with its marketing message. But it’s generally fine for you to take clients or customers outside your niche now and then, as long as you’re well-grounded in your niche to begin with.

If over time you don’t find success in the niche you’ve chosen, re-evaluate and tweak your target. While it’s of course best not to be all over the place and changing your marketing every few months, it’s also important to learn from and respond to your experiences. In fact, this is just an everyday part of business; you can expect to be refining your targets over time. If the photo studio above just isn’t getting parents hiring them for portraits of their kids, even after consistently marketing itself as a children’s photographer, it should take a hard look and consider changing course. If corporations keep contacting the studio for headshots, photos for their annual reports and other assignments, it should consider switching its niche.

Over time, successful businesses capitalize on success within their niche by broadening and expanding into new niches. The typical growth arc of a successful small business is to establish itself well in a relatively small niche, and when its profits are consistent enough to enable it to grow, it then expands by targeting new niches. Many mega-successful businesses that you’d never consider a “niche” business started out this way — for example, many of the designers now selling to the masses at Target (Phillipe Starck and Cynthia Rowley to name just two) started out as uber-exclusive niche designers.

3 Comments

  • Diversify…you can grow a niche business – but why put blood sweat and tears into one focus when that niche may wash away in 2, 5 or 10 years? That just doesn’t make sense. Diversify, IMO.

    • I’m definitely not saying to stick with the same niche forever! Every business has to be aware of changing market conditions and trends, and respond appropriately. If the business is a solo freelancer, that may mean simply shifting focus (i.e. a music producer moving from an analog to a digital recording workflow). For growing businesses, it typically means expanding into new markets. In short, focusing on a niche and staying current with trends are not mutually exclusive.

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