One of my most repeated pieces of business advice is to niche your business as much as humanly possible. A guy who wants to start a “fitness” business teaching people how to “lose weight” or “get ripped” is going to get slaughtered. But, a guy who instead starts a business focusing only on how overweight moms over 40 can lose weight, or how Asian men in their twenties can gain muscle mass, will probably do very well.
The guy who niches:
- Will make more money
- Can charge higher prices
- Can find customers and prospects much more easily
- Will experience far less competition (if any!)
- Will have more repeat sales
- Will get more referrals
- Will have less customer complaints and customer service overhead
In other words, if you don’t niche, you’re making a huge mistake.
I get a lot of questions about exactly what a niche is and is not. Below are a few correct and incorrect examples of business niches.
“Motivated men who want to make their lives better and increase their incomes.”
Not a niche. It’s not clear enough or demographic enough. If instead you said, “Motivated salespeople in the auto industry who want to increase their incomes,” now that’s a niche.
“Young women, under the age of 25, who want to lose weight.”
That’s a niche. In my opinion, it’s not quite niched enough, but it qualifies as a niche. I would personally add one more aspect or qualifier to those younger women to further niche it. In other words, what kind of woman under age 25?
“Small computer consulting companies (under 500 employees) in the USA who have been in business for longer than four years.”
That’s a niche. That’s exactly the niche I work with in my I.T. marketing company. That’s the only type of company I work with in that business, and I literally won’t work with anyone else. I’m highly niched, which is why that business is so profitable.
“Companies with severe quality control problems.”
Not a niche. You’re describing your offering, not a niche. You’re saying you fix quality control problems, and that’s great. You’ve niched your service, but you haven’t niched your market. If you instead said something like, “Companies in the furniture business who have severe quality control problems,” now that’s a niche, and you’re going to make lots of money.
That’s a key point. Sometimes people think if they just niche their offering (i.e. their product or service) that automatically niches their market. Sometimes this is true, but usually it isn’t. You usually need to niche both.
The more you niche, the better. You can even “microniche” by niching within a niche; very smart.
And no, don’t worry about the target market being too small if you niche. Go back up and re-read the list of benefits you receive by niching. All of these more than make up for the fact that the total market size is smaller. I can’t think of a viable niche where you couldn’t make a very healthy six-figure Alpha 2.0 income.