The Tycoon Report

Find Your Niche and Strike it Rich!

Friday, May 15, 2009 | Ethan Roberts

A few weeks ago, I had lunch with a friend at a small Peruvian restaurant here in my area of Northeast Florida.  This restaurant has been in business for a few years, and it's definitely been a "mom-and-pop" kind of place that has survived because of the small, yet loyal, population that it serves.

I would not say the food is fantastic, yet it's good enough that the restaurant is usually quite crowded. In fact, on my last visit, I noticed that they are getting ready to expand into the vacant storefront adjacent to them. 

I thought to myself, "Wow, here's this big bad recession -- with restaurants closing down all over this town -- and yet this little place is not only still here, but it's thriving and expanding!  How can this be?"

And then I remembered the reason...  it's the niche!

What Exactly is a Niche? 

A niche is a focus upon one particular area of a service or product sector.  Wikipedia says that:

"The market niche defines the specific product features aimed at satisfying specific market needs, as well as the price range, production quality, and the demographics that (it) is intending to impact."

Here's a quick example.  There is a dentist not too far from where I live who has a niche business.  He only works with children!  (He must have the patience of a saint.)  Parents will bring their children to this particular dentist, rather than to another one, because he is now viewed as having special expertise with children.  This gives him a dominant position in the local market.

Having a niche is very often the way to go -- whether it's a business, or an investment philosophy.  A niche will serve you well, whether it's a robust economy or a down turn, such as we are seeing today.   The key to success in business is to focus on a specific niche that will provide either a large volume of business, or smaller volume but with a higher profit margin. 

Often, it really pays to do the things that nobody else wants to do.  Try to identify a need in an area and then work your niche around that need.  Is there a problem that people are having that needs to be solved?

For example, in an area with a great many senior citizens, one could have a profitable service business by bringing their service to the seniors' homes, rather than making that population travel to a store or an office.  One example might be a pet grooming service that makes house calls.

Sometimes when driving around town, I will look at the name of a businesses on the side of a truck, and wonder, "How in the world did this person ever decide to go into THAT business?"  Do you just wake up one morning and say, "Wow, I think I'm going to start a sump pump business.  It's everything that I've always wanted to do!" 

Although it's an honorable profession, clearly, it's not like being a fireman or an astronaut -- you know, the occupations that little kids always say they want to be when they grow up.  There's certainly nothing glamorous or sexy about pumping water out of dank, moldy basements. 

And it's not like being an actor, rock star, or some other occupation that drives the women wild.  But it's the kind of niche business that is always going to be needed by somebody somewhere.  And it's somewhat recession-proof as well. 



While it may not be as exciting as sump pumps, I myself have developed a successful niche real estate business over the last 13 years, specializing in selling foreclosures and other distressed properties to both owner occupants and investors. 

Foreclosures are not all that I sell, but it's probably about 60%-70% of my business.  I have been through good years and bad in the real estate industry, but my niche has always kept me on the green side of the ledger. 

So when new agents join my real estate company, I always talk to them about creating a niche for themselves, as a way to differentiate themselves from the incredible competition among those realtors who simply generalize.  I tell them they can specialize in condos or waterfront or second homes or investment homes, or whatever they like best, but just find themselves a niche and work it!





Ethan Roberts
Contributing Editor
The Tycoon Report