Why ‘Niching Down’ might not be right for you as an early-stage small service business
We see it so often…
“We serve {very specific demographic} with {very specific characteristics} who are {more specific qualifiers}... The criteria to be a fit goes on. This is the popular advice to small business owners. Be VERY niche, and market very specifically around this. While it’s important to know your audience and curate effective marketing, we don’t always agree with this blanket advice, especially for early-stage small service businesses. Here’s why:
A too-refined niche… shrinks your opportunity pipeline
Knowing your ideal audience is key to connecting, but it shouldn’t be so refined that it shrinks your total addressable market (TAM)* to next to nothing... In the infancy of a small business, saying yes to most all inquiries is essential to build a credible portfolio... and survive. Saying ‘no’ to prospective clients who don‘t fit your ideal, fun-to-work-with mold is a hard-earned luxury.
Total Addressable Market (TAM): The total market demand for a product or service. It’s the most amount of revenue a business can possibly generate by selling their product or service in a specific market.* (Hubspot)
A too-refined niche… hinders your business acumen
Supporting a greater diversity of industries, and understanding the nuances of their go-market strategies, will make you more savvy at business. Having technical skill isn’t enough. You can’t buy a course to learn business acumen, and it’s the most undervalued trait to success. It’s a mix of knowledge and experience that powers quick, effective decision-making. It’s a key characteristic of the best leaders and most successful, promotable business professionals.
A too-refined niche… hinders your emotional intelligence
Emotional intelligence, like business acumen, is one of the strongest predictors of success. Professionals with high emotional intelligence are more empathetic, better at resolving conflict, and more likely to stay calm under pressure... Essential skills to manage a business & maintain good relationships.
If you only do business with the same very specific person/brand, your limiting your experiences and perspective-driven knowledge that comes from working with all kinds of personalities. Why do the best business leaders hire talent from a wide range of industries? Because they bring new knowledge, experiences and perspectives.
As your embark on your small business journey...
Serve a broader market. Wear many hats. Get uncomfy.. and grow. At least in the beginning, you’ll be better for it!