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Why Niching is the Most Important Business Decision You’ll Make

Niching can feel counterintuitive at first, the idea of scaling down to scale up isn’t comforting for most people. Finding your business’s niche is a great way to make it more successful. Yet many business owners are afraid to niche down for fear of limiting their services and missing out on potential sales.

This is where these businesses end up stagnating.

Small is the New Big

Small businesses make up the vast majority of the marketplace - but that doesn’t mean small businesses are particularly successful. Actually, a lot of small startups end in failure or bankruptcy.

The startups that do manage to stay in business often stagnate and fail to build a sustainable business model. This happens because new businesses try to be everything to everyone. This dilutes the effectiveness of a business plan and can be the root of your business’s downfall.

There are many benefits to niching down that will make you a more successful business owner:

1. Limit your competition

One of the biggest benefits of finding your niche is reducing your competition. If you’re offering a general service - say, recruitment - you’ll be in competition with thousands of other recruitment agencies that offer the exact same service. If you choose to niche down and focus on recruiting candidates in the manufacturing industry, you’ll face less competition and be more likely to pick up specialist clients.

2. Become an industry leader

In order for clients to choose your specialist service over general services, position your business as the expert in your niche. You need to offer more than a general service can. Luckily, when you choose to niche down, you’ll find that you have more time to excel in what you do best.

By focusing on a particular niche, you’ll have more time to perform in-depth research on your target market and be able to communicate with them in a more effective way. The better you are in your industry, the more recognition you’ll gain and the more your ideal clients will trust you and want to work with you.

3. Better targeting

customer segmentation

All businesses, large or small, are in the marketing business. When you’re trying to target a large, widespread audience, you’ll find that your budget may not allow your business to reach that range. Spreading your budget too thinly is ineffective. When you know your niche market, targeting content is a viable option.

By choosing one type of customer to focus on you can optimise your marketing plan to your demographic. The result? Your budget will show more bang for its buck. The more successful your marketing plan is, the more you’ll reach potential clients and close sales more easily.

4. Improve your online visibility

Better targeting goes hand-in-hand with improved online visibility. By focusing on a niche, you’ll find Search Engine Optimization easier because you’re targeting a specific group of people. This means there’ll be less competition for the keywords you’re targeting and the traffic you attract is more likely to convert into sales, because your business is a good match for their needs.

For example, if your company produces retro sweet jars and you use these words as your SEO keywords, you’ll be up against the other 3,050,000 businesses who are targeting the same thing.

If you niche down on “personalised retro sweet jars”, you’ll only be competing with 1,580,000 others. The more you niche down, the better your chance of appearing on Google’s first page of search results, otherwise known as ‘the money page’. By appearing on page one (and the closer to the top the better), you’ll find you get more traffic to your website.

5. Establish a network

Guess what? Your customers and clients hang out with others just like them. When you focus your business on a niche, you’ll find that you establish a better repertoire with clients and attract more referrals. This creates the foundations for a strong networking base.

6. Build a loyal customer base

When you’re offering a niche service and do it well, you’ll find that customers and clients return time and time again because there’s little competition. Once clients find a provider that offers the niche service they need, they’re unlikely to look elsewhere because they know there aren’t many other providers. You become the only logical choice.

7. You’ll learn how to troubleshoot problems

Every business comes up against problems. Whether it’s an issue with your product, trouble with your production line or a kink in your delivery method, prepare for cracks in your service.

When you have a large general service there’s more potential for problems. When they appear, you may not have the necessary expertise to handle them. When you niche down on your service, you can focus intensively on every aspect. You can troubleshoot them quickly and make your service even better. It’s about continuous improvement.

8. Confidence attracts sales

By having a niche that you excel in, you’re in greater control of every aspect of your branding and marketing message. When it comes to pitching to potential clients, creating online content or dealing with customer enquiries, you’ll develop a clear and consistent message that you deliver with confidence. Your sales team can pitch with greater confidence, knowing your company has a great track record in the niche it serves. Confidence always attracts sales!

9. Niching gives your company room to expand

This might sound counterintuitive, but the problem with generalised businesses is that there’s so much going on it’s hard to find the right path for expansion. New ideas for growth aren’t a problem for most companies, knowing which ideas are worth implementing is often the greatest challenge. When you have a clear niche and vision decision making is easier. Ask yourself, “Does this new idea strengthen our relationship with our target market or does it dilute it?”.

10. Define your vision and goals

When you find your business’s niche, you can build a specific business plan suitable for that niche. You can refine your short-term goals over time as you test, measure and tweak your strategies to find what works best for your business. Whatever adjustments you make, ensure they are in-line with your long-term vision to reach your niche market. This is a challenging process for generalised businesses because diluting focus leaves them with blurry business direction.

Tips to find your niche

business niche

By now you should be convinced that finding your business’s niche is incredibly important, you may be wondering how to choose your niche. Here’s a few points to consider to help you identify the best way for your company to niche down, including:

  • Your passion - passion builds the best companies. If you’re not passionate about your business, it’s unlikely you’ll commit to it. Running a business takes dedication, hard-work and consistency. Which are difficult to maintain if you’re not passionate. Don’t try and and choose your niche purely on profit (although that’s important), focus on your personal interests.
  • Research - once you have an idea for what your niche could be, do your research. Identify how much demand there is for your product or service in that niche. There may be a niche in the market, but is there a market in the niche? Look at your competition’s websites, reviews and social media accounts to find out what makes your idea better and how you can improve your niche.
  • “Who?” and “what?” - if you’ve been in business for a while look through your existing customer base. See who your best customers are and what particular product or service you provide them. You may find a common trend amongst your customer base that can help you define your niche market.

At Red-Fern, we practice what we preach. We’ve chosen our niches of Digital Marketing. Inbound Marketing, Web Design and Bespoke Development.

There are plenty of other services we could have targeted, but instead we’ve chosen to work with those we excel in. We’re not the only ones choosing to niche down either.

There are other marketing companies that have found their niches. For example, Australian firm Industrial Ideas focus on a similar target market yet they focus less on digital marketing and more on marketing plans. The key is to provide a product or service to a niche that you can lead in.


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