Why Niche is the Key to Small Business Success


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In the world today, we have people doing exploitation in the general line of business. It will be sad to let you know that they are only a few. And more so, they tend to hold the strength of their overall success from each niche within their organization. Specialization in a line of business is the key to overcoming competition.

Making informed choices about a niche you intend to build your business around will go a long way in keeping you in line for a long time. Narrowing down to make a focal point in a business is more productive than broadly narrowing down topics from various niches of your business.

Adam Smith pointed out that there were three things that make us more prosperous, in a general sort of way: freedom to pursue our own self-interest; specialization, which he called the division of labour; and freedom of trade.

P. J. O’Rourke

The Need for Specialization

While developing talents in numerous fields of a business give you significant knowledge of the entire, it has its downsides. The advantage is that it opens countless chances to secure jobs in many niches. That’s the idea, but not always true.

It will be wrong for a business owner to focus on the general market at this age. They end up going the extra mile to secure a large customer base in the market. They believe they have a better chance of making strides in building up their customer base in the general market.

Rising living standards – whether in a village, a region, a nation, or the world – depend first on specialization: on letting people concentrate on what they do best and trade with others who specialize in other things.

Virginia Postrel

Focusing on the general market is one great mistake you don’t want to make. It leaves a business to focus on people who might not be interested in their business, which translates to “no one” eventually.

What Is A Niche?

A niche is a sub-group of a business. It is a small section of a business. A good example is the fashion designing business (the female kids’ wear section). Anyone involved in this niche will have to limit his line of work to female kids’ wear alone.

In simple terms, a niche is a comfortable or suitable position in your business. It is a corner in your business line where you are a specialist. That is, a role you choose to take that eventually limits your scope of work.

Build a Lake and Not a Meander

A lake is a large expanse of water surrounded by land. This is a water body usually of a great dept. On the other hand, a meander is a river, usually shallow, that follows a winding and sluggish course.

If you compare both, you already understand which is ideal for your business’s survival. You don’t want to dine off the table of shallow waters when there is an abundant depth in a niche for you to benefit from. As a friend will say, “you should focus on feet wide, but a mile deep, it will give you strength”.

Each man is capable of doing one thing well. If he attempts several, he will fail to achieve distinction in any.


The result in targeting a smaller section of the market is higher than a broader one. It brings your product or services to the attention of the market. You will be able to know your market as well as build a closer bond with your customers. It allows you to grow into a big fish in a small river, allowing you to take over a niche/category or location. This, of course, is virtually impossible if you are aiming at an extensive audience in the market.

A practical explanation to this point is your curiosity to obtain information from search engines. A series of information is shown based on the search input you have placed. Now, you will notice that the description that best suit your search will be clicked by you. This is that special need. There are a lot of folks in need of a solution to one specific problem. If you hold the solution in that niche, you will get them calling in for solutions.

The Initial Cost, Running Cost and Return

If you want to succeed, limit yourself.

Charles Augustine Sainte-Beuve

A business aims to get a return on investment. A successful return ushers in chances of continuity. Specialization gives room for greater success. You will need a lower initial cost of setup and running costs.

Initial Cost of Capital

The initial cost of establishing a business that is limited to one line cannot be compared to the cost required to establish one with tons of niches. Even a novice will be able to digest this; an initial in setting up a beverage factory will be more compared to starting a cocoa packaging factory.

Cost of Customer Base Development

In aiming for a niche of that business, you have the advantage of acquiring a larger and cheaper customer base. It is a very simple phenomenon. The cost that might be attached to building your customer base will be cheaper since you will only be centred on those interested in your niche.

Cost of Running and/or Maintenance

You will certainly have to spend more on running a bigger sector of a business than managing a niche. This is simple mathematics. As a mother, which will cost you more? Having a child to take care of or to take care of five children?

Cost of Advert and Publicity

Having a niche to manage guarantees a reduction in the cost of adverts and publicity because your target market is smaller. An organization with numerous niches will require either an extra-large team for its advert or numerous sections for advertisement. Having a niche to manage will only require you to make an advert in that niche, making it cheaper and more detailed to handle. It gives you a sense of direction as well as lessens the waste of time and resources.

Profit and Returns

Being a specialist gives you authority over your prices. Since you are very good in that niche, it will make prices placed on your product or services irrelevant to customers. For instance, if you are desperately in need of a scarce medication, which will you prefer? Would you rather visit a general store (or supermarket) or a pharmaceutical store? A man who had just been diagnosed with a brain tumour will not want to be treated by a general doctor but by a neurosurgeon. At the point of need, you don’t negotiate prices with your customers.

In Conclusion

You should spell out that one thing your market will want and draft out a solution to that effect. It should be something unique they will want to pay for heavily.  

The shoemaker makes a good shoe because he makes nothing else.

Ralph Waldo Emerson

You should always remember that you have an edge over general professionals and business owners.

  • You are an expert in your speciality,
  • You know the work inside and out,
  • Your process of work is streamlined to your niche,
  • You can charge more for your services and products, and
  • It is easier for you to sell out your services once you find a perfect market.

That is the beauty of serving a niche. Whether you do heart surgery or offer cellulite treatment, you can now charge far more for your services than by being a generalist. You’re perceived differently by your prospects and customers.

A specialist is sought after, rather than shopped on price. A specialist is much more highly respected than a jack of all trades. A specialist is paid handsomely to solve a specific problem for their target market.

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