Niche Down to Grow Your Small Business
Niche Down to Grow Your Small Business – focus on your most profitable offerings and narrow your geography to help you grow your small business.
On this episode Henry Lopez shares the benefits of Niching Down the focus of your business to help you grow faster. Narrowing your focus and offering allows you to better leverage your limited resources to help grow your business faster, particularly in the early phases of your start-up.
Topics covered on this episode of The How of Business podcast:
- Common Mistake: Wanting to launch and immediately build the business you envision operating 10 years from now.
- Whether you are in the planning phase for the launch of your new small business, or you have been in business for 6 months, 12 months or a couple of years – this approach of niching down and concentrating your efforts may be what helps you survive and even thrive in those critical early years of your small business.
- According to the U.S. Bureau of Labor Statistics, approximately 20% of new businesses fail during the first two years of being open, 45% during the first five years, and 65% during the first 10 years. Only 25% of new businesses make it to 15 years or more.
- What is often unreported and what doesn’t necessarily show up in the stats: Business owners who struggle at just above profitability and never are able to build a stable business that can operate without them working in it 24/7.
- When you choose to niche down, you will find that you have more time to focus and excel at what you and your small business do best. By focusing on a particular area of your business, you’ll have more time to perform in-depth research on your target market and be able to communicate with them more effectively.
- How do you Niche down? Consider:
- Where is most of your revenue coming from?
- What products or services are most profitable and easiest to deliver with high quality?
- How can you possibly narrow your geographic focus?
- Stop pretending to be bigger than you are, and instead focus on a smaller community where you can get traction with your brand – where you can begin to get referred quickly!
- If you are selling online, how can you nonetheless get hyper focused on generating leads or sales locally? The truth is, no one is going to find you online initially any way! That’s why a business card can still be much more effective than a beautiful website you paid 5 or 10 thousand dollars for – and a lot cheaper!
- In the case of a physical retail location – it’s about focusing on a well defined niche. What will you be known for that differentiates you? There aren’t too many old style department stores left or that are doing too well. And you are certainly going to have a hard time beating Walmart or Amazon at their game!
- Niching down also makes everything less complicated. From your operations to you sales and marketing:
- Operations: By streamlining your offering, you make it easier to implement systems and delegate work. You are better able to document and train others to do the work – to make the product or deliver the service.
- Marketing: You have limited dollars. You don’t have enough money to try to attract every potential buyer. You must narrow your focus, which in turn narrows your ideal or target customer, or avatar, allowing you to laser focus your spending on marketing and advertisement to reach a much small group of potential buyers. And furthermore, your messaging will be much tighter and appealing – because you are not trying to be everything to everybody.
- Avoid trying to sell too many things, to too few people. When you don’t niche down you are trying to offer too many services or products, and too few people are buying them.
- The most valuable companies do exactly the opposite – sell just a few things to lots of people. A lot of people is relative, of course – it means that you want to focus on selling more of what you do best, to a growing tribe of raving customer or clients.
Episode Host: Henry Lopez is a serial entrepreneur, small business coach, and the host of this episode of The How of Business podcast show – dedicated to helping you start, run and grow your small business.
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