Pick a niche: why small businesses win by narrowing down

Ask a small business owner who their customers are and you'll often hear "anyone who needs what we do." It sounds sensible. More customers, more sales. In practice, it's one of the most common reasons good businesses stay small.

Why "everyone" doesn't work

When your message is written for everyone, it lands with no one in particular. Your website sounds like your competitors' sites. Your ads compete on price because there's nothing else to compete on. And word of mouth, the most valuable marketing there is, stalls because customers can't easily describe who you're for.

A niche fixes that. A niche is a clearly defined group of people with a shared problem that you solve especially well.

What a good niche looks like

Compare these two descriptions:

• "We do bookkeeping for small businesses."
• "We do bookkeeping for independent restaurants, including tip reporting and supplier reconciliation."

The second is narrower, and that's the point. A restaurant owner reading it thinks, that's me. The business can write content about restaurant problems, speak at restaurant association meetings and get referrals from one owner to the next.

A useful niche usually has three things:

1. A shared problem that people will pay to solve
2. A way to reach them, such as a group, an event or a publication they read
3. Enough of them to support your business

The fear of missing out

The biggest worry is that narrowing down means turning work away. Usually it doesn't. You can still accept customers outside your niche. You simply stop marketing to them. Most businesses find their niche brings in more work, at better prices, because they're seen as the specialist.

How to find yours

Look at your best customers so far: the ones who paid well, were pleasant to work with and referred others. What do they have in common? An industry, a life stage, a specific problem? That pattern is usually your niche, hiding in plain sight.

Specialists get referrals. Generalists get price shoppers.

Start small: rewrite your website's first sentence to name the people you serve best. See what happens over the next three months.