Posted by Dave Lorenzo - Business Coach

One of the best start-up tips I have ever received (and now have given to others) is to focus on a specific niche when starting a new business.  This is simply dynamite advice.  Here are five reasons why you should focus on as narrow a niche as possible when you start your business:

Market Dominance – If you want to build an insanely profitable business you need to be able to set the trends for your industry (or at a minimum set the trends for your local market).  The smaller the market niche the easier it is to communicate with them.  Frequency and depth of communication builds trust.  Trust leads to long-term relationships.  Long-term relationships lead to market dominance.

Perceived Expertise – In a narrow niche you can pitch stories to every trade magazine.  You can also cost effectively advertise extensively in places where the key people in your niche hang out.  Again, frequency builds trust.  In a narrow niche you have less ground to cover in order to appear “everywhere”.

Price – Specialists command big dollars.  Who do you think makes more money a heart surgeon or a general practitioner?  If you are an expert in one field, with a little work you can become one of the “go to” people in your field.  If you do that, the big money follows.

Focus – Starting a business can drive you crazy if you are not focused.  Too many people go broke trying to be everything to everyone in their new business.  Working in a specific niche will allow you to keep focused on the group of people who will buy your product or service.

Competitive Threats – In a niche you get to know all the players quickly.  If there is a new entry into your area of expertise, you know it as soon as it happens and you can crush them – or at least work hard to keep them from stealing your market share.

There are many more reasons focusing on a niche at start-up is a good idea.  These five should be enough of a reason to get you to think twice about creating a business for the masses.

Filed under: Entrepreneurship - Start-up
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1. […] One of the best start-up tips I have ever received (and now have given to others) is to focus on a specific niche when starting a new business. This is simply dynamite advice. Here are five reasons why you should focus on as narrow a niche as possible when you start your business: Tags: niche | # […]

   Pingback by Startup Mix » The Riches in Niches — July 26, 2007 @ 06:09

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