This week I attended the SRO technology board meeting in Brisbane. It was great. It was eye opening and confirmed a hunch I have for SMEs: There are opportunities in niches.
Many SME owners have heard that they need to offer more services to more people to increase their turnover and growth. I want to suggest the opposite. I have seen first hand that dominating a niche can increase revenue and growth much more rapidly than a broad market approach.
It is a little counterintuitive but I believe there are 3 reasons SME owners should niche down.
- You can create deep niche knowledge quickly.
- You can quickly understand customer or client problems and provide solutions quickly.
- You can create significant organisational efficiencies in focusing on a niche.
Deep Niche Knowledge
You can develop deep niche knowledge quickly. The scope and scale of the niche is significantly less than a broad market approach. It enables SME owners and sales staff to become subject matter experts quickly.
Clients or customers in the niche will naturally gravitate and be attracted to service providers who are invested and knowledgeable in the niche. It builds trust and authority.
Speed in understanding the problem-solution paradigm.
The second aspect is that by focusing on a niche, the organisation can quickly and efficiently understand the niche client or customer’s problem and deploy solutions appropriately.
The speed to grasp the context and unpack the core problem in need of solving demonstrates your understanding of the industry or niche and ultimately builds on your trust and authority.
Trust and authority build reputation. Reputation drives demand.
Significant organisational efficiencies
The other key aspect of the niche approach is that internal processes and procedures can be streamlined and efficiencies extracted.
If you are solving the same problem repetitively you can reuse the same knowledge and resources which increases operational efficiencies.
Focusing on a niche in my view provides a far greater opportunity to grow faster and create sustainable earnings.
A narrow niche dominating strategy or approach will, in my view, result in better outcomes than a broad market approach.
SRO is in a niche market and they solve a niche problem. The reality is that the niche market is massive. It’s niche because many people don’t know about it and it requires a special set of skills.
Niche industries do not necessarily mean small. I also hear many people say that niche markets are not big enough. This is absolute rubbish. Unless you have 75% market share there is always plenty of market available to acquire and serve.
If you operate an SME I challenge you to consider what your niche is.
For Frank Law + Advisory this is a question we have considered thoroughly. We have realised that our niche is those businesses in the Hi-Vis industry (think manufacturing, heavy vehicle, wet hire, dry hire, service industry or wholesale) or the Human Capital space (think NDIS, consulting etc).
But if we take this further and niche this down it would look like:
- Family owned and operated or founder led manufacturing businesses in Western Sydney
or
- Family owned and operated or founder led NDIS businesses in Western Sydney
The more niche the market, the greater the ability to dominate.
Most niche markets are substantially bigger than you think and are ripe for the picking.
In summary, niche is awesome. Find the niche, lean into it and dominate.
If you need help working out what your niche is, please reach out. We love the niche.
