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The number one mistake that most new entrepreneurs in the service industry make is to offer a huge array of services from the start - the whole kit and caboodle. In an online space ruled by SEO (search engine optimization) and keywords, conveying what you do in very specific terms becomes crucial, but even more importantly, gaining peoples' attention in an often overcrowded, competitive market means finding strategic ways to stand out. Many new entrepreneurs think standing out means offering more variety or resorting to attention-generating gimmicks. But what successful business owners have known all along is that becoming an expert in a niche is the secret to building a successful business.
This is especially true in a service-based business such as copywriting, editing, marketing, or life coaching. In a globalized economy with millions of people offering such services, competing on price alone won't make a significant difference. You just have to look at a website like Fiverr.com to see how many talented professionals are offering logo design, writing, editing, and even computer programming services starting at just five dollars.
So what does that mean for someone who is trying to start or build a service-based business? The road to success starts with identifying a very specific problem you can solve for your ideal customer, which also means understanding who your ideal customer is. Far beyond pure demographic information, your ideal client profile includes information such as preferences about food, music, movies, etc.
Large companies like Amazon and Netflix invest millions of dollars in an area known as Big Data, analyzing large sets of customer data collected from a variety of sources to better understand buyer behavior. As a small business owner, what you can take away from this is the importance of really getting to know what kinds of solutions your ideal client will pay money for.
So if you're a wellness coach, it might make sense to do some primary market research through online surveys and by posting questions in forums to find out whether, for example, new grads want recipes for quick, budget-friendly, healthy meals or whether they would prefer links to local restaurants that serve healthy meal options. As you're doing that, start narrowing down your niche from wellness coach to nutrition coach to nutrition coach for millennials and keep refining it even further until you land upon something that clearly defines what you offer. Become well-versed in the pain points and challenges faced by your ideal customer base and strive to find solutions that your customers not only like but will actually pay for.
Product-based business owners are familiar with the process of market testing to ensure that their customers actually want what they will be producing because the up-front costs for production are significant and include things like tooling and inventory. But service-based entrepreneurs have often fallen into the myth of "if you build it, they will come" and are devastated when their websites and marketing materials aren't drawing in the numbers of customers they had counted on. This can be devastating to new entrepreneurs, and if not dealt with quickly, can end the entrepreneurial journey before it even really begins.
So instead of subscribing to the popular notion that more is better, consider that becoming known as an expert in one very specific niche is what many successful business owners have known all along. You can always expand your offerings once you have a platform and a following, but trying to be the jack-of-all-trades to your customers can come across as lacking expertise. Even worse, it can become the reason that no one is able to find you online.
Finding a niche can be one of the most challenging aspects of building your business because it appears counter-intuitive to everything you've ever been taught. You've often succeeded in life by excelling at many different things, being able to connect with lots of different people, and partaking in a wide variety of activities. Though that may be good for your life, when it comes to building a new, relatively unknown business, it is often the very thing that keeps you from gaining any traction. No matter how spectacular-looking your website is or how talented you are, unless people know what you can do for them, you'll be struggling to reach the people you want to help. Solid market research techniques paired with a thorough understanding of your skills and expertise will go a long way to helping you narrow down your niche.
Some people have a strong predisposition to one specific skill - think Olympic athlete or child prodigy. But for many of us, especially those who are often referred to as scanners, this process may feel debilitating. Many entrepreneurial types tend to be multi-passionate, which is the very reason they leave a job that feels stifling, in order to pursue multiple interests. They are the ones that often rebel against the idea of picking one area to focus on and decide that they will prove the notion of needing a business niche wrong. Some people do so successfully, often the ones who already have a large social media following or mailing list. Some people choose to run several different businesses at once. Others become serial entrepreneurs, building one business, selling it, and moving on to the next.
But for the majority of new business owners, selecting a profitable niche in one area of interest they are highly skilled at is the key to attracting a customer base that will follow and ultimately buy what they offer. So what about all of those other interests you can't necessarily incorporate into your primary business? Maybe save those for your next free weekend.
Prema Srinivasan helps service-based entrepreneurs find their profitable niche by assisting them to identify the intersection of their passions, skills, and market demand. With an MBA and over 15 years of experience in marketing and business strategy, Prema helps her clients create powerful strategies for success. www.richnichebizcoaching.com