Most businesses that are having success in today’s market have one thing in common. They have developed a niche market with a unique differentiator. Look at the average business life. A service based business starts up with a motivated owner that is excited to start this new venture they have created. His energy, focus, and the few contacts he came into the business with allows him to start having some success. The first couple years there is growth, and it’s when the expansion starts their world changes.
An expansion requires getting funding which means loan payments, new employee’s to run the new equipment and now there is a need for sales to help pay for all of it. It’s at this point that you start growing you realize you are making more revenue but your personal income isn’t growing. Eventually your business get’s into the top 10 but you can never break into the top 2 companies of your demographic. Here is where the businesses that have grown, downsized and know the market have developed themselves into.
They find a niche market. A niche market is a focused area where your services are needed that allows you to become the best in that area. The big boys get business from many types of sources and it cost them a large penny to get each lead. A niche market allows for a higher price point, which means more profitable jobs. The customers are more loyal, and it doesn’t take as much work to maintain your customer base. This means you focus on becoming great at what you do not spending your time trying to find customers. Higher profits means more money for the company to invest into it’s equipment, employees, and it’s image and service.
Let’s look at a normal restoration company business model. They typically will offer fire, smoke, water, bio medical, wind, structural repair, emergency service, carpet & upholstery cleaning, contents pack out and contents cleaning. The list can then be broken down within each of those services. It’s difficult to pull enough volume to have employees for each service so you need to cross train them which then leads to those trades as secondary trades which in turn means low quality of service and less profitable. These can also be broken into commercial and residential to even further complicate it.
Now let’s focus on one trade. My company does water damage mitigation and structural repair of those water damages that we mitigate. That’s it, we’ve done all the other trades in the past, our employees can do them now, we have all the equipment, but this is why we don’t.
When we say we are a water damage company we all know what it is that we do. When we talk to someone as we do each day it’s easy to tell someone what it is that we do. They know who we are, what we do, and we haven’t complicated it with 5 other types of service. In business the more people that know you the more business you will get.
Process and systems can be built and improved as each day many of those tasks that we do are the same. Each project may be different but what we do overall is the same. We can teach and train our employee’s how to understand what the client is going through which will help with having compassion for the client as their home has been flooded. As systems and processes improve so will profitability.
Your marketing brand will tell the public who you are and what you do. The message is clean and clear. Those that refer you do so because they like you, they look at you and your company as professionals, not just another company. You will find that the relationships that you build with your referral sources become more than just referral sources they become friends. Maybe only business friends but you have a connection. That’s what builds the loyalty.
Develop your company into a specialist. Pick a niche market, provide a great service. Stop competing with your competition, make your own market. The smaller you focus the greater the success you will have and the higher your profits will be. It works. Start looking at successful businesses that do really well but may not be real big in size. Compare bottom line numbers you will find those in niche markets make the same as the big boys just doing it a lot easier. Find your niche and dominate.