I’ve written a great deal about what a niche is not. I’ve come to believe that putting together niches that you service is the only way to provide a business that makes higher than average profits and is relatively easy to run. Below are two things I think you need to learn about developing a niche and the effort that it takes to do so.
What exactly is a niche?
An example of a niche would be private business owners who are over fifty years old and have businesses that create significant profits with recurring cash flows. A business like this will have several issues that are exactly the same. It’s possible to build a very good business around the general issues that a business like this has.
At the same time, although one might call this a niche, we would call this a general classification of service. Meaning that although there are certain similarities between the issues that the owners are facing, the language of their individual industries would be different.
It takes a great deal of time to become an expert in a general niche. In our experience becoming an expert in the issues of a general niche takes between five and ten years. Although it provides you with a great deal of knowledge it only gets you about 80% of the way to providing memorable service to your customers.
The Holy Grail on niche planning, the micro-niche
This is where niche services really pay off. A micro-niche would start with the niche description above, but would add industry or product user specific language. For example, if we take our business with recurring cash flows we might add large wealth management firms with over 500 million dollars in assets, or specialty manufacturers who work with OEM’s, but have the ability to also work with those in the aftermarket for their products.
Both of these examples are very specific and will have language as well as processes that are specific to their industries and market segments. When we develop the skill set to be an expert provider for a micro-niche we truly understand the issues that face this set of customers and clients.
The good news about developing a micro-niche is that it takes relatively little time to become an expert in them. Once you have developed an expertise in a generalized area, then developing the expertise to serve a micro-niche only takes about 100 hours. And, being a micro-niche expert is where the real action is.
I’m interested in hearing any ideas you might have about developing micro-niches and the advantages or disadvantages of them. Please either click on this link to set a time to talk or send me an email at Jpatrick@stage2planning.com.
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