Not only do I think a niche is important, but in many instances having a few micro-niches that you become an expert in can even magnify the power of a niche. If you identify and work within a micro-niche you will not only become more profitable, but your business will become more effective.
At the same time most advisors that I know or work with have a powerfully strong urge to practice what I call niche-drift. They will move from their niche to take something that looks like their niche, but really isn’t. I recommend to the people that we work with both in the advisor space as well as the specialty manufacturing industries to do everything they can to avoid niche-drift.
Some of the reasons to do this are:
· Although niche-drift can be amusing, it often takes your focus away from your chosen specialty. Focus on not doing one off engagements is where extraordinary profits come from.
· Niche-drift costs you money. Doing a “one off” is never as effective as doing the same process many, many times. When you take on a client who is not in your “sweet spot” otherwise known as a niche you move into the world of one offs. You will often spend more time and effort than you are used to serving your present client base.
· Niche-drift will often pull your focus away from what you’ve become very good at doing. It takes a long time to become an expert within a particular niche. This is where you do your best work and your clients get the best value. Although you might know about the new market you’re moving into, you won’t provide the best advice this person can get.
· You will cause some upset within your organization. When you wander away from activities that are systemized and documented within your organization you make it difficult for your staff to do excellent work. This shows up in the quality work you provide your clients.
I’m not opposed to developing new micro-niches within your practice. I am opposed to doing so without thinking thoroughly through the ramifications of this action. If you’ve become a niche-aholic, you have worked hard to develop specific expertise in certain areas. Don’t wander from your niche unless you truly want to spend time and effort learning new skill sets.
I’m always interested in hearing your thoughts on niches and what they mean to your practice. Leave a comment below with your ideas.