The benefits are higher prices, less competition, and a better ability to withstand downturns in the economy.
It seems to me that one of the core tenets of any business today – especially those that operate in crowded fields – has to be that you need to find a niche and fill it. You just cannot do the same thing everyone else in your business does, the same way they do it, and expect to be successful.
It’s easy to see how this idea applies to a small firm. But before anyone with a larger or mid-size firm stops reading this article because you think it doesn’t apply to you, consider that a larger firm could be made up of many smaller groups of people with unique specialties, filling otherwise unfilled niches in the marketplace. Just because you are mid-sized or larger does not mean you have to be a generalist necessarily.
To the contrary, you should be a firm of multiple specialties.
How do you find these niches?
You observe, you talk to clients, better yet, you work with clients and find out their needs firsthand, and you experiment – i.e., try out new things. They don’t all work, but some do.
The benefits of pursuing a niche are higher prices, less competition, and a better ability to withstand downturns in the economy. You also may have a better ability to adapt quicker to a changing market due to your intense involvement in something.
Downsides include not everyone in the firm wanting to be pigeon-holed into working in one area and there is a possibility that a niche can go away if it is based on specific legislation or a particular technology.
What niches are you pursuing? If none, isn’t it time you started some exploratory efforts now so you can be better positioned for future success? I think so.