Niche Concept: Why Finding Your Niche is Key to Your Business’ Success
By Roger David, CEO & President, GSR Brands
There’s a pretty common belief that it’s bad for business to have a specific focus, that having too narrow a concentration pigeon-holes you, not allowing your brand the room it needs to grow and thrive in the future. It’s best to be broad so your business will appeal to a wider base.
The opposite is actually true.
The benefits add up for a business with a targeted product or solution to an unmet need or underserved market.
Finding your niche is about determining the focus of your business and then working to hone your skillset or product, refine your offerings and building your expertise that gives you the legs to withstand the test of time – and the numbers back that up.
In a Sept. 2018 Forbes article, Texas-based entrepreneur Judge Graham said that 42% of startup businesses fail because they either don’t capitalize on a niche or provide a solution to a problem. In other words, if your focus is too broad, you’re putting your business in danger of closing before you give yourself a chance to really get off the ground. Having a niche isn’t a “niche concept” anymore; it’s an essential part of your business model no matter the industry.
WHY NICHE WORKS
Many of us have a primary care doctor, likely one whom we’ve seen for years. You know each other, there is friendly conversation at your annual check-up – it’s an amicable relationship. But should a serious concern arise, they’ll refer you to a specialist trained to address the health issue with the expertise to ensure the best care possible.
In much the same fashion, finding your niche is like being a specialist in a field where your expertise makes you stand out from the general pack. Entrepreneur.com details a seven-step process for creating a good niche. While that article’s step-by-step approach is quite informative, the gist of it is this: Specialization in one thing, can be a very good and profitable thing. Forbes itself said so back as 2016.
A focused business concept has numerous benefits, including simple and streamlined operations and less direct competition allowing you to be a big fish in a small pond. A clear focus means you can focus your audience targeting strategy. Defining and excelling with a special skill set and knowledge in a particular industry allows you to identify, claim and build on your market expertise.
The restaurant industry is filled with niche businesses; those that fully embraced their niche are the ones that have the most success.
My organization, GSR Brands, operates two restaurant franchise brands, each with a well-defined niche: Cincinnati-style chili (which is now expanded into a regional dish) at Gold Star Chili and melts and soup at Tom & Chee. There are plenty of regional and national fast-casual concepts, but our brands are successful because they focus on a specific niche – chili and melts and soups – and make those core products the best they can be for our guests.
Think about it: Barnes & Noble sells thousands of magazines, books, toys, and games at each of its stores, including comic books. But if you’re looking for an older, out-of-print issue of Spider-Man, a local comic shop is likely where you’re going to find it.
Plenty of restaurants have chicken salad on the menu, but when I said “chicken salad,” there’s probably one restaurant brand that immediately popped into your head – Chicken Salad Chick. I’m sure when they were getting their start, there were plenty of detractors saying that having a restaurant that only served chicken salad would never work. The brand’s success tells a much different story, though. They’ve grown exponentially, more than quadrupling in size since 2016. In early 2020, the brand reported opening 40 new restaurants across the nation in the year prior and achieved 16 consecutive quarters of same-store sales growth. That’s impressive to say the least. They’ve mastered their product and built a brand around it, and have added complementary products as they’ve gone on.
TAKING NICHE TO THE NEXT LEVEL
Once you master your niche, finding ways to stand out even more among other competing businesses within that niche can transcend your company to the next level.
While others serve Cincinnati chili, we’ve made ourselves unique within the category by developing a product with a distinct flavor profile based on a 13-spice recipe brought from my ancestors’ homeland of Jordan. Now, we’re expanding beyond the category by selectively growing the menu to include options like burgers and milkshakes alongside our region’s foodie claim to fame.
Tom & Chee started selling delicious grilled cheese and tomato soup to hungry ice-skaters in downtown Cincinnati. They quickly expanded to offer what became their claim to fame, the grilled cheese donut, and today, the business includes high-end grilled cheese melts you can’t make at home, handmade soups and fresh salads – and yes, even more varieties of grilled donuts – to appeal to a wider audience without losing sight of the niche that put it in business more than a decade ago.
This idea works outside restaurants, too. Countless stores sell soap. Bath & Body Works finding and embracing it as their niche is why people know the company even if many people couldn’t find their home base on a map. After successfully building a national brand best known for soaps and lotions, the brand now makes headlines coast-to-coast with Black Friday sales of its wildly popular three-wick candles. Strategic growth from its original niche product offering to complimentary offerings have allowed Bath & Body Works to continue to grow and become the shining star in the L Brands portfolio.
Having a singular focus in business isn’t a sentence to a life of mediocracy devoid of success and growth for your organization. In fact, having a singular focus can be extremely profitable if you first build your organization to master it, and then strategically grow with complementary products or services.
*Originally posted on Forbes.com.