One HUGE mistake that I’ve seen new small business owners make is not defining their niche market early on in the game.
This is an extremely important part of your small business. Defining your business’s target market is something that needs to be done in the startup phase of your business (not years down the road) in order to increase your success and profitability.
Sure, it might seem counter-intuitive that shrinking the number of people that your business appeals to will end up positively affecting your bottom line, but that’s just how it works.
When you set up your small business to appeal to everyone, it ends up appealing to no one because you are a small fish in a big pond. No one is going to notice you with all the other noise out there. You’ll get lost in a sea of bigger, more established businesses and experts.
Your goal is to be a BIG fish in a SMALL pond. In other words, you want to define your niche market in a way that you stand out. You become the expert in your field. You become the go-to person. And, inevitably, you make more money.
Here are 3 big benefits of defining your target market…
#1: Defining your target market allows you to spend your marketing budget and time more wisely.
When you try to market your business to every person on the planet…guess what? You’re going to run out of money really fast. When you have a broad market, this is what happens. Your marketing budget gets spread too thin and your marketing material is too general. Overall, you end up making very little impact with your marketing message.
On the other hand, when you narrow down your target market, you can focus your marketing time and dollars like a laser towards those who need your product or services. This will have a huge impact on the success of your business. Even though it might feel like you’re excluding a ton of people, you will skyrocket your appeal within your market.
#2: Defining your target market allows you to become the expert in your field.
When your business has a specific niche market, you have the opportunity to be seen as the expert in your field. For example, Ali Brown did this with her business coaching. Her target market is women running coaching businesses (life coaches, health coaches, relationship coaches, etc). She’s seen as the expert for women business owners and has effectively grown her business into the 7-figure range. Also, this allows her to hone in her skills as a business coach. She doesn’t have to know much about things like franchises or the NASDAQ, because it’s not relevant to the people she works with. It’s difficult to be an expert in everything, but when you have a niche market, you can define your skills and expertise in one area and find those who need (and love) your specific services.
#3: Defining your target market allows you to get more of the clients/customers that you really want.
This is a big one. The truth is you probably don’t want to work with every person on the planet (I know I don’t). You don’t want every customer who’s willing to give you money. Instead, you have a specific kind of person in mind who is your ideal client.
When you define your target market, you can find more ideal clients. And when you have more ideal clients, your business will thrive because (1) your ideal clients will tell other ideal clients about your services, (2) you will love who you’re working with, and (3) your clients/customers will love you because you are offering the exact services they need.
Bottom line: Your small business is not for everyone.
Take time when you’re establishing your business to define an ideal target market. This will save you SO MUCH time and energy and make your small business experience much more enjoyable and profitable from the get-go.