The niche is com­fort­able, but it can become an ene­my to an entre­pre­neur’s ambi­tions.


5 min read

Opin­ions expressed by Entre­pre­neur con­trib­u­tors are their own.


“Find a niche if you want to suc­ceed in busi­ness.” This age-old advice has been hand­ed down to entre­pre­neurs for gen­er­a­tions. Find­ing a niche mar­ket is a piece of great advice — as long as entre­pre­neurs under­stand what exact­ly is meant when that advice is dished out.  

The purpose of a niche

For the pur­pos­es of mar­ket­ing and cus­tomer sat­is­fac­tion, find­ing a niche and stick­ing to it is nec­es­sary for new busi­ness­es and/or small busi­ness­es. The log­ic to this is sim­ple: Cater­ing to a larg­er mar­ket or audi­ence will require the invest­ment of more mar­ket­ing dol­lars to reach that mar­ket, as well as more tech­nol­o­gy or per­son­nel to sat­is­fy their needs, if and when you do reach them.

Relat­ed: How Niche Micro-Com­pa­nies Will Rule the Busi­ness World

This is often dif­fi­cult if not impos­si­ble for new busi­ness­es, espe­cial­ly for those who are boot­strap­ping it. This being said, a new busi­ness can reach a wide mar­ket if it starts off with sig­nif­i­cant fund­ing and can afford to acquire the nec­es­sary tech­nol­o­gy and per­son­nel. In essence, the advice to find a niche is a log­i­cal one for con­ve­nience, but it’s not nec­es­sar­i­ly a strat­e­gy for busi­ness suc­cess across the board. 

Anoth­er rea­son busi­ness­es might focus on a spe­cif­ic niche, or niche down, is for the pur­pos­es of com­pe­ti­tion. A niche helps set the busi­ness apart and helps it hook cus­tomers by cater­ing to very spe­cif­ic needs. This push­es oth­er busi­ness­es to either niche down them­selves or expand.

Relat­ed: 3 Rules for Niche Mar­ket­ing

A niche market is not the same as a niche product

I have often seen bud­ding entre­pre­neurs mix up these con­cepts. When advice is giv­en to niche down, it is often in ref­er­ence to find­ing a spe­cif­ic demo­graph­ic that you can cater to as a busi­ness. In oth­er words, it often refers to find­ing your niche mar­ket.  

A cat­e­go­ry like “males” is a broad mar­ket for a clothes man­u­fac­tur­er. How­ev­er, if the busi­ness tar­gets teenage boys, it has found a niche mar­ket with­in the broad­er one by nar­row­ing it down by age.  

Work­ing with a niche prod­uct, on the oth­er hand, is cen­ter­ing your busi­ness around a spe­cif­ic prod­uct type amid a broad­er cat­e­go­ry of the same or sim­i­lar prod­ucts. For instance, “jack­ets” is a broad cat­e­go­ry, but cen­ter­ing your busi­ness around trench coats adds some ease to your pro­duc­tion process­es.  

Relat­ed: Why Serve a Niche Mar­ket?

Entre­pre­neurs must under­stand the dif­fer­ence and also under­stand where they over­lap. It is very pos­si­ble to find a niche prod­uct that also trims down your niche mar­ket auto­mat­i­cal­ly. An exam­ple would be “adult men’s shoes” as a niche prod­uct with­in a greater cat­e­go­ry of shoes. A busi­ness that man­u­fac­tures men’s shoes will nat­u­ral­ly cater to a broad cat­e­go­ry of adult men. If a busi­ness decides to focus on the man­u­fac­tur­ing of men’s ath­let­ic shoes, this also nat­u­ral­ly nich­es down their mar­ket to men who are into fit­ness.  

This dis­tinc­tion is nec­es­sary because it means that small busi­ness­es can niche down their mar­ket with­out nich­ing down their prod­uct. In fact, it is advis­able that busi­ness­es offer all the prod­ucts it can to their niche mar­ket. This could trans­late to offer­ing run­ning sleeves, shin pads, ath­let­ic socks, and oth­er ancil­lary prod­ucts. In this way, the busi­ness might not offer a niche prod­uct but is still be cater­ing to a niche mar­ket.

Relat­ed: In Amish Coun­try, A Les­son in Niche Mar­ket­ing

Niching down is not a permanent verdict

Face­book began as a plat­form con­nect­ing col­lege stu­dents, and now it’s a mega-con­glom­er­ate with a toe in almost every­thing the inter­net has to offer. It has does so with grad­ual but inten­tion­al growth; main­tain­ing a niche can become obso­lete once a busi­ness has grown enough to effec­tive­ly move beyond its present audi­ence or niche. 

The niche is com­fort­able, but it can eas­i­ly become an ene­my to an entrepreneur’s ambi­tions. Nich­es are by def­i­n­i­tion small, and this makes them risky. Bet­ter tech­nol­o­gy, changes in pol­i­cy, or a search engine tweak­ing its algo­rithm can instant­ly put you out of busi­ness. This is why it is advis­able for busi­ness­es to start with a small niche but aim to grow beyond it. 

That said, it is a sig­nif­i­cant risk to leave a niche, espe­cial­ly one that has worked well for your busi­ness. But it’s no secret that lead­ers are peo­ple who take risks, and most are ready to fish where the sharks are when the tim­ing is right.

What­ev­er stage your busi­ness may be in, it’s worth it to fig­ure out if you want to mar­ket a niche prod­uct or stick to reach­ing your niche mar­ket. When you niched down enough to cre­ate a busi­ness, make the best of it and scale your busi­ness with­in that niche. Only then should you invest grow­ing with­in that mar­ket.

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