How to Increase Your Profitability as a Small Business: Find Your Niche

Profitability isn't just a measure of success; it's the bedrock of sustainability and growth for any thriving business.?

How can you maximize your profitability within a competitive market? By finding your niche! When you identify how your business is different from your competitors, and hone in on your specialization, you can better serve your most ideal customers and charge a profitable price for your product or service.?

In my book, "How to Hire the Best: The Entrepreneur's Ultimate Guide to Attracting Top Performing Team Members," I walk you through the five key strategies of the Tap the Potential Solution? that help you maximize the profitability of your business, not just today but for years to come. Step two of this system talks about the importance of niching down your business in order to create a competitive advantage within your industry, attract the right customers, and charge a profitable price for your product or service.?

Here's an excerpt from How to Hire the Best that explains more about this step:

“Niche down with a clearly defined sweet spot. Have a clear niche. Become the sought-out solution in that niche.? A tightly focused niche broadens your opportunity for scalable growth while streamlining your business, reducing your labor needs, and driving profitability.?

Complexity is the enemy! Standardized repeatable work makes it much easier to systemize, automate, and scale a business. All of this translates into greater profitability for you (along with fewer employee headaches).?

“Complexity is the enemy of profit!” —Dr. Sabrina Starling?

The benefits of niching down are immediate and important. You can do more and better work with a smaller, specialized team that does not need constant supervision. You have fewer people to pay, so you can pay your specialists higher wages while lowering your overall labor costs and increasing profit.?

At the same time, with the cost of labor rising, you have to charge more to cover your labor costs. Many of our clients come to us struggling to be profitable. This is due to the compound effect of years of undercharging in an attempt to remain competitive. Being the specialist within a clearly defined niche gives you significant competitive advantage, allowing you to charge what you need to charge to be profitable.?

Remember, profit is your reward for the entrepreneurial risk you bear.? You are in business to be profitable. A profitable business is a healthy business that will last through pandemics, economic downturns, and other crises. A? profitable business creates job security for your team members. A profitable business is the foundation of a great place to work!”

Defining your niche enables you, as a small business owner, to strategically align your hiring process with your business goals. By understanding your ideal clients and unique offerings, you can accurately identify the right positions to fill and the specific skills and qualities needed in prospective hires to achieve your objectives.

You can learn more about identifying your niche, designing your business to be sustainably profitable, and all five steps of the Tap the Potential Solution? at the upcoming Better Business Better Life Jumpstart Workshop from Monday, March 25th through Friday, March 29th at 11am PT / 12pm MT / 1pm CT / 2pm ET. Click the link to register for the free workshop and to download your workbook: https://tapthepotential.com/jumpstart/

About the Author

Sabrina Starling, PhD, PCC, BCC, The Business Psychologist, is the bestselling author of The How to Hire the Best Series and The 4 Week Vacation?, as well as the founder of Tap the Potential LLC and host of the Profit by Design podcast. She and her team at www.tapthepotential.com are on a mission to support entrepreneurs in taking their lives back from their businesses.