We Lost, Because We Lost Sight of Our Niche
A couple of posts back I shared with you how an old school manufacturing company I was part of catapulted to 4x growth by implementing 3 very specific principles (check out that blog here if you missed it).
At the same time AMSL was having so much success, Boa Construction (the original residential home building side of the company) was also exploding. (if you missed that story, click here).
We were firing on all cylinders and tearing up our market. Eager to continue this growth trajectory, we were looking for new ideas. So, in the midst of this success, we started a commercial construction division.
At first it went pretty well.
Sure, in the beginning it was a bit of a cash drain. But that’s typical of a business that requires high overhead, and has relatively low profit margins.
Within a year, the business was standing on its own and no longer needed a “subsidy” from the parent company. The commercial arm had grown from $0 to about $5 million in annual revenue in just over a year.
Things were really looking up!
The Downside of Deviating from Your Niche
The downside of deviating from your #niche Share on X
But in 2008, things started slowing down. By 2009, work opportunities almost completely dried up. More seasoned competitors in the commercial space had a strong enough foothold to weather the storm. We did not.
The entire company, including AMSL, Boa, and the commercial division, shut down in November 2009.
In hindsight, branching out from our niche markets and starting the commercial division was probably the single thing that was most responsible for doing us in.
It cost us probably $500k in cash, not to mention distracted us from our core businesses.
It was too much, and we weren’t positioned well enough. The market collapsing did not help, but that wasn’t the main driver behind the demise.
We Lost, Because We Lost Sight of Our Niche
The real culprit was a lack of FOCUS.
We over extended, and took our eye off the ball. Instead of being 100% keyed in on dominating our niche market, we tried branching out into new ones.
I learned a lot from this experience.
If you REALLY want to grow to amazing levels, then the path is not to create a bunch of different businesses. Nope.
Quite the opposite…
The clearest path to explosive growth is to be the best in the world at something very specific. (tweet this)
LinkedSelling’s Niche
With our business today, we’re working very hard to be the best in the world when it comes to growing your business via LinkedIn. That’s it.
We’re not trying to be everything to everybody. People sometimes ask me…do you guys offer Facebook advertising or email marketing or SEO?
Nope.
Plenty of people try to do a little of everything. We’re busy being the best in the world at ONE thing. (tweet this)
Challenge yourself to view your business through the lens of your specific niche.
And if you think that being the “best in the world” is really not realistic…then I’d like to know why you’re doing what you’re doing. The worst that can happen is that you shoot to be the best in the world, and you end up doing extremely well.
Not a bad scenario.
The key is focus.
Yet even with intense focus, all businesses experience winter at some point, right? In my next Journey post, I’ll share with you one specific way that you can survive these winters. Even if you do happen to make a misstep from time-to-time.
Well done, Josh. Love the quote!!
Thanks Chris!
Great storytelling Josh,
Telling a story allows your readers to think outside the square and see the bigger picture.
I agree wholeheartedly about focussing on your niche without being distracted.
However I’d like to add that focussing on your niche when you’re posItioning, branding, story-telling, and marketing per se is paramount but it doesn’t mean you can’t branch out – just that any branching out you do must simply be an EXTENSION of what you’re well known for in your niche.
Surprising and delighting your EXISTING customers by alerting them to the next (strategically planned) extension of your (by now hopefully rather famous 🙂 original offering can grow your business existentially and make you even more valuable to those who already know & trust you.
I think of these kind of offerings as 2nd tier, rather than core.
So I totally agree that you core offering & associated core niche should always be your main focus. But expanding with offerings that support the original or are the next obvious step for your core clients, so they needn’t look elsewhere to solve that problem, gives you market share in other niches without having to change direction.
As I write this I’m just thinking of my business which has an enormous capacity for this business model – I’m not saying it works for just any business. I haven’t launched yet (been doing this offline though for many years), so the proof will be in the pudding 🙂 I certainly won’t be branching out overnight though!
Love your work Josh & always keep an eye out for your emails.
Cheers
Lyn
Sydney
Thank you
This whole concept of a niche can be a slippery slope for some people. Some are afraid to narrow their niche in fear of losing potential business. However a laser focused niche as Josh talks about only helps you to refine your expertise and make you even more valuable. Oh sure, maybe that means instead of 1 million senior executives or C-suite occupants it only means 350,000 senior directors and high potential leaders. If what you know is what this narrowed niche needs (their pain points, there challenges, their fears) and you have spent some time in their shoes then you will be more credible AND more valuable