So, tell me what you do again?

Sep 17, 2008 • Paul Singh

I was visiting my home, just outside of DC, this weekend and met a number of great folks involved in a wide range of industries. As I sit here on the ride back to San Francisco, I’ve been thinking about one particular entrepreneur that struck me because I still don’t know what he and his small business do, even after chatting for 20 minutes. (To protect the innocent, I won’t call him out publicly but I’m working with him privately now make things better.)I met with him for a second time earlier this week and peppered him with some more questions before we discovered the problem: He shied away from picking a particular niche because he thought it would limit his profit margins or customer counts. He’s not alone — unfortunately, I see this far too often.Here’s the thing though — why be a small fish in a ginormous pond? It’s far smarter to be the big-ass fish in the tiny little pond. Less is more.

Mark Vadon, Blue Nile’s co-founder, was quoted in a recent BusinessWeek article:

I want to be the best in the world at one thing. I don’t want to be half-assed at a lot of things.

Most businesses suck when they try to do too many things — cut down the number of things you do and your margins shoot through the roof. Every small business that I’ve consulted has told me that once they narrowed their focus to a specific niche, their sales skyrocketed.

In fact, when my own construction company decided to stop actively looking for commercial work, our residential sales skyrocketed. Once we focused on the few things we did better than anyone else, everything got better — more clients, more money and, most importantly, less stress.

How do you define your niche? To start, determine one thing that you do better than anyone else. Not sure? Ask people who know you well. I bet they can come up with at least one thing that makes you a rock star. If you need more help, Geekpreneur has some tips on ways to find your niche and I recently included a few more tips here: the importance of being the best at what you do.

By narrowing your focus, you’ll start to be seen as the expert in your industry. Which instills confidence in your customers and brings even more people to your door. Doesn’t get much better than that.