When you first become a small business owner, there’s very little that can rival that high you get from having real live customers to work for.
Getting to wake up every day and work for yourself—and solve interesting problems? Count me in.
But very quickly, you’ll want to start planning for growth. Sure, that first $10K feels great, but it will only whet your appetite for more.
If you’re trying to hit higher revenue goals, one bit of highly popular business advice seems straightforward on first glance:
To make more money, find your niche.
It makes sense, right? Become a specialist and people will pay you the big bucks.
While this is true in theory, choosing a niche can make you feel like you’re in middle school again. (Who am I? A jock? An emo kid? A nerd? I’m so ~*misunderstood.*~)
The problem of niche is truly a question of branding: Niching down is a way of representing to the world what problems you solve and who your clients are.
Why entrepreneurs are afraid to niche down
Niching down is infamously scary for entrepreneurs—most urgently because of imposter syndrome. (The gig’s up — they’ll know I’m not really a taco connoisseur…)
Going all-in with a niche down is daunting because it means you’re going to have to:
- Take your precious business into uncharted waters
- Turn away (otherwise potentially fantastic) customers outside your niche
- Possibly get stuck, burned out, or bored in a single subject matter
- Endure the consequences if the niche isn’t a good fit after all
The scariest part of the whole process is the unknown response you’ll get when you announce your new niche to everyone. Will clients love it or hate it? Will this earn my business more money or make my clients dry up? Will my dad finally say he’s proud of me? (Doesn’t matter, I’m proud of you.)
Thinking outside the niche
As with most things, there’s a lot more to this topic brewing just below the surface. What are the limits of a niche? What are the possibilities of niching down? Let’s explore how a niche doesn’t have to be as scary as it may seem right now.
One of the first benefits of selecting a niche is climbing out of the grime of generalist pricing and race-to-the-bottom competition. When you’re #basic, there’s always someone who will make their price lower than yours or another person who will gain a slight edge over you in SEO.
Niching down gives you a clear way to compete based on the specialized value you provide. People will work with you because, well, it’s you.
Paul Jarvis, web designer and author of Company of One, started out just selling web design services that put him in competition with every other generic designer.
Eventually, he made a switch. Instead of a simple web design service business, he positioned himself as someone who solves business problems through design.
That change may look subtle on the surface, but it transformed his business. “I could pretty much charge whatever I wanted… I increased my rates and I never saw a drop-off in clients. I just pivoted into products because that’s what I felt like doing.”
Surprisingly, niching down has actually allowed him to diversify: today he has a host of online courses, podcasts, digital commerce products, and a popular new book.
Oh, and he still makes bank working for himself.
Do you find a niche or does a niche find you?
While I can’t choose a specialization for you (my attorney has asked me to stop), there are a couple helpful frameworks to assist you as you grow your business over time. To find your niche, first consider these four questions:
- Where do I add the most value?
- How can I leverage my experience?
- What do I enjoy doing?
- How can I solve problems that give a clear ROI to the client?
Many people treat finding a niche as adding a modifier to their LinkedIn job title: “eCommerce” consultant, “Fintech” copywriter, “80s nostalgia-chic” interior designer.
But there isn’t just one way to niche. Far from it. You can niche down by:
Niching Down by Industry
As you grow your business, you start to build your clientele. Once you hit critical mass, you can look back and determine which kind of clients you love working for. And that’s when you niche. If you’re lazy (welcome to the club), this kind of specialization can typically find you. It’s often pretty obvious.
Perhaps it’s because that industry has a lot of money. Or maybe you find the subject matter intriguing. Or you come from a background in that niche. Hopefully all three.
Specializing by industry has the benefit of being very SEO-friendly and good for discoverability. If you want more qualified leads and don’t mind working for similar clients day in and day out, I’d recommend niching by industry.
Niching Down by Skill
Laura Belgray, a $1,450/hr copywriter at Talking Shrimp, is glad she didn’t follow the conventional wisdom about niching down when she started her business.
She elaborates in The Copywriter Club podcast Ep. 15: “The No-Niche Niche”,
“I’m really glad I didn’t know [to niche down] because I think that I would go nuts writing for one kind of client… I find that if I have a niche at all, it is a mindset among all different kinds of businesses, which is that their business needs to have a personality. They know the importance of standing out and they refuse to be samey or stiff or boring, and they are embarrassed by stiff, boring jargon and business-y buzzwords. And they will pay not to have that.”
While Laura doesn’t have a specific industry niche, she does have a highly-specialized skill that sets her apart from the pack: she writes like a total maniac. She got her start in TV, so her writing is clear, hilarious, and above all—keeps the reader on their toes.
The benefit of this kind of niche is that it’s evergreen. Laura likes the diversity of her clients and the challenge to inject a burst of personality into each copy project that comes across her desk.
Niching Down by Product/Deliverable
Another option is to do one thing really well. Perhaps you could be the designer who only creates celebrities dancing in AR/VR or a photographer specializing in capturing cryptozoological phenomena like Bigfoot and the chupacabra.
The benefit of this kind of niche is that you can position yourself as the guru. If you only write for online courses, your work will be diverse while also being extremely specific. This type of specialization is also great for getting referrals.
Niching Down by Size
For some service business owners, articulating the type of company you work with can be really helpful. If you only work with companies from $1-10M in yearly revenue, you can say so. Or perhaps you’re branding consultant who only works on overhauling puppy Instagram profiles with over 150K followers.
Another way is to work for companies with a specific funding structure: public, bootstrapped, or VC-backed startups, for example. Articulating the type of company you work for communicates to your clients that you know the problems faced by their business. This helps potential leads to self-select as well.
Let your niche grow you, not limit you
Ultimately, your niche is going to grow and evolve. Don’t feel limited by only one of these options. Perhaps you can mix-and-match. I can see it now: “I inject a fun, flirty personality into dating profiles for healthcare CEOs who make >$8M yearly.” Boom.
Okay no, of course that’s crazy, but you know what I mean. Have fun with it, and see where you can continue to add value with the business you provide.
Have experience niching down? Tell us about it in the comments!