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Episode 22 – How Niched Is Too Niched?
You’ve probably heard you need to choose a niche right?
And the smaller the niche the better right? Well, not necessarily.
It depends on the kind of business you are trying to start and how big you want to grow.
Most of my clients are starting coaching, consulting or service-based location-independent businesses. See episode 4 for why I consider these the best options to start with. The short answer though, is more money sooner and lower risk.
So they want to be niched enough to stand out but don’t want to be so niched that it is hard to find clients.
Getting the numbers right
One important point to remember when choosing a niche is the number of people that will become clients will be a small proportion of the number of people who are willing to join an email list or hear from you regularly who will be a small proportion of the number of people who have an interest in that market.
So even if you know 10000 people have an interest in a subject it may only mean there’s less than a hundred potential clients in that niche.
Typically speaking if you want to look at numbers you want to have at least 1000 google searches a month for what you are offering if you will be operating globally.
You want to hit a sweet spot between potential number of customers and size you can grow the business.
So what are the ways of niching?
I like to think of them in terms of levels. If you have one of the lower levels you don’t need to worry so much about the higher levels.
Level 1 – Location
The original way of niching pre Internet was location. If you are the only hairdresser in town then you are going to get clients because people need haircuts.
Level 2 is specialization. For example hairdressers for curly hair (something I am looking for now).
I am not looking for anything beyond the fact that they know how to cut curly hair. I don’t care if they are modern, funky, old school. I don’t care really about the backstory I just need someone who knows how to cut my hair. I need a specialist.
I checked this out and there are only 2 hairdressers specifically for people with curly hair within a distance that I can tell myself is reasonable for a hair cut so from a business perspective they are already set. I can’t get an appointment for over a month!
Other examples of this are nerd fitness, which is online fitness aimed at nerds. They run a very successful business because they take an area that has broad appeal – fitness, and take a slice of the people that want fitness – nerds. And nerds may not feel comfortable in the more mainstream fitness world the same as I don’t feel comfortable in a hairdressers that doesn’t really know how to cut my hair.
Level 3 – Differentiation
When you are operating on the Internet which if you want a location independent business you will be you can’t niche using Level 1 – Location because location is irrelevant.
If the size of your market is small you may be able to get away with Level 2 – Specialization but it’s unlikely that you can find a specialization that no one else is doing and just make stake your claim as the one or one of very few specialists.
You need to niche on Differentiation
Differentiation is about communicating how you are unique and different to anyone else your idea client can hire in this area. This makes the right people want to hire you.
This is my preferred method of niching.
Why? Because everyone has a story and a journey and a different path they have taken for a reason. There is a reason why they want to be a Health Coach, Business Coach or an EFT Practioner or an Online Marketer or a Website Developer or whatever it is. They want to offer something that they believe in and that something is never a carbon copy of what someone else is doing.
I find often people have some kind of magic combination
They blend two normally disparate areas together or they offer a unique range of skills that would be incredibly useful to a
By using differentiation, and if you read a lot of my stuff or are in one of my programs, this is the messaging piece – how you communicate how you are different, you make yourself truly unique.
Above location, and above your specialization.
By niching this way it is about how you present yourself to your ideal client
Rather than looking for a thin slice of the market that has never been done approached before which is really narrow and potentially high risk I prefer choosing a broader niche that you can see works by the fact that other people are making money with it and then putting your own twist, your own messaging, your own differentiation on it.
Essentially taking a proven idea and doing it your way.
It’s a smart way of taking what works but also making sure you’re doing it your way.
What do you think?
How did you choose your niche?
Do you have any questions about choosing a business idea or niche right now?