When a small business owner chooses to niche their business, they drill down and focus their products and services on one specific part of their industry. Doing so defines the small business and puts tight constraints on its product and service offerings.
However, doing so can also be immensely beneficial to small business owners and the success of their businesses. When small business owners niche their businesses, they differentiate them from their competitors. They establish their companies’ missions and create clear visions for what they will provide their customers with moving forward.
Here are five reasons why small business owners should niche their businesses:
1. Create a passionate customer base.
When small business owners choose to niche their businesses, they create specific product and service offerings that customers will have trouble finding at other stores. Companies that offer payroll services, for example, may choose to niche their businesses and focus their services on primarily helping small businesses, as PaySmart does. This, in return, creates a loyal customer base committed to buying a specific business’s products or services. Therefore, when small business owners niche their businesses, they make passionate customer bases that are guaranteed to return to do business with them repeatedly.
2. Tap into an underrepresented part of the industry.
Small business owners who niche their businesses also have the opportunity to create products and services that highlight often overlooked parts of their industries. By choosing to niche their businesses, small business owners offer products and services to customers that other companies do not commonly provide. For example, a local hair salon could exclusively offer customers organic hair dye. Since many salons typically do not choose to cut out inorganic hair dyes, solely offering organic hair dye allows this small business owner to tap into an underrepresented part of their industry and attract and retain customers.
3. Become a leader in the niche and demonstrate expertise in it.
When small business owners decide to niche their business, they can become a leader in that subsection of their industry. They must demonstrate expertise in their business’s niche and thoroughly understand it. To do so, they must create high-quality products and services guaranteed to fulfill customers’ needs and wants. A bike retailer, for example, who focuses on selling women’s road bikes exclusively, could become a leader in this niche by thoroughly understanding the specific needs of female bikers. They should take time to learn about the gear women use and how they position their bodies on their bikes. If they do so, they can employ their expertise to assist customers who enter their stores and ensure they leave satisfied. Their expertise concerning the needs of female riders will most likely outperform the knowledge of another small business owner who sells bikes for men, women, and children.
4. Create an exclusive experience.
Furthermore, small business owners who niche their businesses have the opportunity to create exclusive experiences for their customers and employees. When small businesses have a niche, they eliminate many direct competitors. A small business with a dedicated place can offer more products and services for that niche than its competitors. Employees also, in return, have the opportunity to dive in and learn about that niche. A local cosmetic store, for example, may choose to make solely vegan products with coconut oil bases. Other cosmetic stores in the area may offer some vegan coconut oil-based products, but their selections will likely not be as broad, and their staff will not be as knowledgeable. Thus, when small business owners choose to niche their businesses, they provide their customers exclusive experiences they cannot find at competing stores.
5. Create an identifiable and memorable brand.
Lastly, when small business owners choose to niche their business, they help establish their business’s brand in customers’ minds. Businesses with niches are typically unique. They provide customers with products and services not offered by their competing businesses. Thus, they have very identifiable and memorable brands. Customers can more easily define and gain a thorough understanding of businesses with niches. They understand what they specialize in as well as what they do not. Therefore, if a small business owner struggles to define their brand image, choosing a niche for the business may help them do so.
When small business owners choose to niche their businesses, doing so can be tricky. It can be challenging for them to determine precisely what niches their companies should focus on, and difficult to acquire the knowledge needed. However, by choosing to niche their businesses, small business owners help differentiate themselves from their competitors and attract loyal customers.
If you are a small business owner looking to niche your business, pick a niche you are passionate about and allow your love and interest for it to lead the way!
PaySmart is a payroll provider in Mechanicsburg, Pennsylvania, supporting small businesses in the Central PA region with payroll for employees as small as one employee. We are dedicated to helping small businesses take care of their payroll needs. To learn more about how PaySmart may provide payroll solutions, please contact us at 717-766-1777. Our New Client Concierge is waiting for you!