To Niche Or Not To Niche? That Is The Question

No matter how you pronounce it, the term ‘niching down’ is grabbing a lot of attention right now. And for good reason.

May 2022
6 min

Whether you’re a social media savvy solopreneur or bricks and mortar small business owner, you may have seen and heard a lot recently around the concept of ‘niching down’. 

Not only is there a hot debate about how to pronounce it correctly (for me, it rhymes with Quiché, for others it rhymes with rich) there’s also lots of discussion around whether it’s the right thing to do for small businesses and solopreneurs. 

The reason? Done right, knowing it's the right time to niche down can open up huge business benefits. Done wrong, it can close down potential business opportunities.

So first off, what do we mean by niching down?

What is niching down? 

A niche is a specialized segment of a market for a particular product or service. So when we talk about niching down, we’re referring to the specific market you’re in, not your product. 

A niche product caters to a high specialized, low volume, consumer demand, which often leads to premium pricing. A good example of a niche product would be vinyl records, which attract music purists who value the authentic sound quality and packaging. 

In contrast, in a niche market, your product or service provides a very specific solution to a very specific problem. For instance, if you’re a personal trainer, then your target audience might be people who want to get fit. Niching down means refining that audience further. 

So, maybe you specialize in helping women get fit. 

Or maybe, you go deeper and your core audience is actually ‘busy mums who stay healthy’. 

Or, further still, working mums looking to build in exercise around work and childcare.

And so on. 

You might be thinking that’s getting too niche, but the reason that niching down is no longer a limiting factor is that social media and the Internet now enable businesses to reach a smaller, more niche audience, on a global scale. 

Let’s start by taking a closer look at the reasons why some small businesses and solopreneurs decide to go niche.   

Why do small businesses and solopreneurs go niche? 

So niching down has got your attention: it might be something you’re thinking about doing, or possibly something you’ve already done (maybe without even knowing it). You might be wondering why so many business owners make the choice to go more niche. Here are four common reasons for niching down:

  • When you go niche, you go deep. By specializing in a more specific niche, you create an opportunity to become a thought leader and go-to expert in your field.
  • With a clearer idea of who your specific target audience is, such as working mums finding time to exercise around work and childcare, it’s much easier to create relevant content.
  • By focusing on one, or a smaller set of problems, you can focus your attention on creating a more specific solution, or a set of solutions, that really resonate with your audience. 
  • The most obvious reason to go niche is that when you narrow down to a particular target group, you automatically reduce the number of competitors. 

How can niching down benefit a small business? 

Plain and simple, businesses wouldn’t niche down if there weren’t tangible benefits to their bottom line. And as the saying goes, if you try to please everyone, you end up pleasing no-one. 

With a niche, it’s much easier to reach your target group because you know them so much better. And when you produce a piece of content, you know that it’s much more likely to resonate with them and, if you’ve got it right, gain much faster traction within your community.  

By being so specialist, you immediately differentiate yourself from more broadly-focussed competitors, which means you can start to position yourself as an expert in your niche. By becoming uniquely specialized, you also make it more difficult for other competitors to copy what you do or enter the market. 

Taking that position also creates a sense of trust, and people within your community will start to view you as an authority. You’ll start to become the go-to business. With a niche, you have a much clearer understanding of how to engage with your audience.

For a good analogy, let’s take rocket science. If you wanted to know the answer to a technical question about rocket science, would you ask a science teacher, who has very good but general scientific knowledge, or an actual rocket scientist who specializes in that particular field? 

When your aim is too broad, it’s likely that your presence is going to be less keenly felt. In a broad network, it’s difficult to find quality leads. However,  tapping into a smaller market enables you to make much more meaningful connections with clients and customers. And the chances are that they have similar pain points and needs which your product or service can help support.

When you truly understand the needs of your target audience, you can build a stronger relationship with them, and can create much more tailored messaging. This gives you a much clearer focus for things like your brand identity and website.  

What are the pitfalls of niching down for small businesses?

As you may have already seen from social media, opinion is very much divided on niching down. For entrepreneurs and small business owners, this can create uncertainty, making them feel unsure whether the time is right to niche down or not. 

As we’ll see, there are different approaches you can take to niching down, but one of the common concerns is that niching down potentially excludes your product or service from certain clients, losing you potential business. 

Let’s take our personal trainer example again. If they help working mums find time to exercise around work and childcare, does that mean they can’t work with clients from other demographics? Not necessarily, but the way your business is set up for a particular group will not have the strongest appeal outside their niche.

The other potential pitfall is that if your brand identity and messaging doesn’t resonate strongly enough with your target audience, you may find yourself backed into a corner and unable to grow your business. In that scenario, how do you broaden your niche in order to attract different target groups?

To ensure your brand resonates strongly enough with your target audience, you need to ensure you’ve picked the right audience. How? Well, this might depend on your chosen approach to niching down.

How can small businesses approach niching down?

Every business is different, and so there’s no one right or wrong approach to niching down.  It’s up to the owner to decide on the approach that suits their business needs, and how far to take it. And that very much depends on their business model and their industry. 

There are two approaches to consider:

  • Too Niche: If you already know your market, and you’re confident about the niche that your product or service fits into, by specializing from the get-go, you’re going to create deeper connections faster with that smaller group. And when you’re well established amongst that very specific community, over time you can broaden out your offering to take in related markets. By the same token, you might also discover more opportunities vertically which strengthen your business without having to step outside your niche.
  • Looking to niche down? Here is a nice video from Pat Flynn, Author, Podcaster & Serial Entrepreneur

  • Not Too Niche: It’s okay not to know your niche from the start. So if you begin broad, it can help you to identify a niche further down the line. It may not be something you had in mind when you started out, but it’s something you discover over time. If you’re a data-driven organization, analysis might reveal that you’re connecting with a particular demographic, or group of customers, or that there’s a common trend for why customers are reaching out to you. That means you can start broad and narrow down. 

Reaching out to your niche

Whatever niche you’re in, it’s important that your brand identity, brand messaging, and website resonate strongly with your target audience.

At Khula Design Studio, we get to know you, your business, your customers — and your niche — so we can deliver the right design solutions for your brand, whether you’re a solopreneur or a small business owner. 

See what Khula could do for you. Take a look at our work.