So many business owners start their business without a focus. They start out hungry for the work and the need for money to survive. They take on the wrong type of clients and end up putting themselves in a situation where they are over their head and struggling to get out of the situation. The fact remains is you cannot be all things to all people. A niche will help you focus on a specialized area.
Recently I took on a project where it seemed simple enough. I had done this type of work before. It was to create a new file by importing customer, vendor, item lists. Easy enough but I forgot to ask an important question. What industry was this client in? It turned out to be the one industry that was not my favorite to work in. Manufacturing and they had over 3500 assembly parts that needed to be imported in. I was thankful to be able to subcontract this out to a colleague but it reminded me that this was not my ideal type of customer.
You can find your niche with these four steps:
- Define your ideal customer. What are the types of customers you want to service? Do they have ideal characteristic? What do you love about that ideal customer?
- Pick an industry to serve: A great exercise is to take a look at your current customer list and break them into different industries (ie. Nonprofit, Attorneys, Real Estate, Manufacturing, construction etc). Count how many you have in each industry and then focus on the ones that have the highest count. Another exercise is to ask your team what you think what industry we service well. You may be surprised in their answer. I was.
- Specialize in a specific service or product.
- Look for a customer base that most people do not work in. It could be the legal, the retail, construction industries etc.
Defining your niche gives you an understanding of the market. You are able to identify the needs of your customers. The marketing of your niche can be very cost effective too. Finding your niche gives you the focus on who you want to market to and how you want to grow your practice.