SCFO #012: The Niche Advantage for Solopreneurs
Read time: 4 minutes
When you build a business as a solopreneur, you set out with the best intentions.
But when you lack clarity on who you serve and what value you provide, you run the risk of commodifying your work.
When you pick a niche, the prospect of doing so is daunting.
I can specifically remember telling my coach, Geraldine Carter:
“But what if I get bored?”
“How do I pick the right niche?”
“But don’t I need to cast a wide net to get clients?”
Looking back six months ago, I now see WHY picking a niche is so valuable.
Today, let’s break down how to pick a niche and why picking one will help you launch (or reshape) an incredibly successful business.
Avoid the Commodity Trap
Creating a service that caters to the masses may seem like a good idea, but it can backfire in the end.
Take a CPA business focused solely on preparing tax returns.
Without a niche, what sets you apart from the competition?
Sure, you can differentiate yourself based on the experience you provide, but ultimately, catering to the masses leads to a commodified offering.
As a result, you end up playing a quantity game instead of a quality game, where low prices plus high volume become the formula for ideal revenue.
I don’t know about you, but that’s NOT the game I want to play.
Still, the issue is all too common.
Before I launched my business, I considered acquiring a CPA firm and evaluated hundreds of businesses listed for sale.
Almost all of them were undifferentiated with razor-thin margins.
I quickly realized that these commodified businesses relied on volume, and acquiring one would make me a slave to the business.
Recognizing these challenges led me to understand the importance of finding a niche.
The Benefits of a Niche for a Solopreneur
Here are three main reasons why a niche is crucial for solopreneurs:
Streamlined Expertise
Targeted Networking
Premium Value
Let’s break them down.
Focusing on a niche simplifies your expertise.
You might worry about boredom (I know, I did 🙋♂️), but a niche offers depth instead of shallow knowledge in various areas.
With a specific focus, you'll be more efficient, reducing the time to deliver your services or products.
With a narrow focus, you gain efficiencies, meaning the time involved to deliver your service or product decreases drastically.
As a solopreneur, trying to cater to everyone limits your ability to provide premium value and pricing.
For example, a digital marketer specializing in SEO for online course creators can charge more for their specialized knowledge compared to a generalist.
Generalists blend in with the crowd.
Specialists stand out.
Lastly, a niche helps you discover your community.
Not only are communities more fun, but you can create value in a community more easily.
Here’s how:
It’s the community that leads you to the problem, which leads you to the product, which leads you to your business. Once you’ve found community-you fit, start contributing with the intention of becoming a pillar in that community.
— Sahil Lavingia, The Minimalist Entrepreneur
Once you find your community, aim to become a pillar within it.
If you're already in a community, identify a single problem that you can help solve.
If not, find a community that matches your passion and skills.
Once there, learn, educate, and listen.
Use your past experience to help address problems within the community.
Great! So How Do I Pick a Niche?
Ditch the “what if” game.
What if I don’t vibe with my niche?
What if I can find the perfect one?
Don’t stress - taking action is what matters.
First, rule out any industries, clients, or services you couldn’t stand in the past.
Next, think about the:
Services you love providing
Clients you love working with
Communities you currently engage with (or wish to be a part of)
Create a shortlist of niches.
Explore each one by binging on content (Podcast, books, YouTube videos), and see what resonates with you.
Keep at it until you discover your niche.
To get you started, you can also think about your niche in 7 different ways, as suggested by Nicholas Cole:
Finally, don’t get stuck in analysis paralysis.
When you're ready, pick a niche you like based on your research and give it a go!
Remember, the worst-case scenario is that you pivot to a new niche.
No harm. No foul.
TL;DR
Embrace niches to avoid the commodity trap
Niches offer expertise, networking, and premium value
Focus on services, clients, and communities you love
Explore, test, and pivot if needed - no harm, no foul
Don't stress, just take action to find your niche
P.S. if you’re a solopreneur and want to minimize taxes while maximizing financial clarity, book a free 15-minute call today.
Let me help you get unstuck in your personal and business finances, so you can focus on doing what you love.
Disclosure: please consult with your CPA, Attorney, or Advisor to execute this strategy. I am a CPA, but I’m not your CPA.
