Building a Business

Why You Should Stay Narrow and Niche Down From Day 1

I’ve recently been talking to a lot of agency owners about the different services their companies are offering to clients.

Here’s what I often hear:

“Anthony, there are so many things I can do… It’s so hard to choose one of them. Should I just go ‘head and offer all of them? That means we can make more money too, right?”

And look, no one knows your business better than you. I’m not going to ever tell you what you should do.

All I want to do is share what I’ve learned over the years. Hopefully, that lets you see things from an angle you hadn’t considered before.

And from my experience, widening your services (at least in the beginning) is often not the best idea. Here’s why:

Let’s say you run a marketing agency.  

There are a lot of things you could be doing. Facebook, Google, and Twitter ads, Instagram stories, SEO, video marketing, chatbots… The list is endless!

Or a web development agency.

You can build landing pages, microsites, websites, web applications, etc. etc.

But, just because your company CAN do all of these things doesn’t mean it SHOULD.

At what point are you spreading yourself, and your company, too thin?

The Real Arguments Behind Niching Down:

Have you ever read how “the riches are in the niches”?

Or “you just have to carve out a niche”?

I’m sure you have. While they’re mostly true, they have become somewhat of a cliche. And, to be honest, I didn’t truly understand it until I lived NOT doing it.

Some of these people that keep repeating you should “niche down” don’t actually get WHY. They’re just regurgitating what they’ve heard someone else say before.

So, here’s why staying narrow is essential:

Repeatability in production.

I’ve talked in other articles about how businesses are comprised of 4 systems. Niching down will help you set up repeatable processes, which makes your machine run more consistently and predictably.

Think back to the marketing agency I mentioned earlier. And let’s say you limit your offering to Facebook Ads.

You can now implement the same process over and over again independently of your client. You know exactly the number of people you’ll need, their role, and how they all should work together.   

Imagine if you were selling ten different complex things. Then you’d also need ten different documented processes, right? More complexity = more expensive to create.

It also makes hiring easier. You can now grow your team knowing the roles you’ll need to scale production.

And, the more repeatable your processes are, the more consistent the results and experience for your customers.

Selling made easy(ier).

When it comes to sales, the simpler and more consistent it is to explain what you’re selling, the better.

When you have a fuckload of services you offer, things get complicated.

First, it’s harder to explain what you do. And, the more things you sell, the more potential buyers will struggle to understand it.

And second, you have to sell multiple things so that your production team has work to do because they all can’t do everything.

In the other hand, when you sell one thing and one thing only, there’s no doubt. It’s simple to explain, and then it all comes down to whether they see the value in it or not.

It also positions you as the expert and specialist over other generalists –and your prices can be consequently increased.

And it makes your marketing messaging easier. That will help you target your client’s better and have a more consistent public message.

Then, you can document a much more straightforward repeatable sales process and hire accordingly.

Okay, imagine you’re looking for someone to run your LinkedIn ads. Think of these two elevator pitches.

Which one is the most captivating for you?

Why You Should Stay Narrow and Niche Down From Day 1

Another thing I’ve found to be true when you spread your services out is that it seems like you’re…

Running multiple companies.

I’m talking from experience here.

Even if you can get over the increased difficulty of selling multiple services, running the operations gets more complicated too.

Jakt started as a web development agency, and we quickly added mobile development to our services.

We had full-time people for both sides, and they were specialized in their thing. Web developers could not work on mobile apps and vice versa.

As you can imagine by now, it was a mess.

If I wasn’t able to get enough work for the mobile app developers, they had nothing to do. But I also had to bring business in for the web guys.

It was like running multiple companies under one name!

I do things differently now. For example, I recently started Polpo Finance –a CFO + accounting service for agencies.

Keyword being… agencies. Not “businesses.” Not even “service-based businesses.” Agencies.

Even more specifically, our target is digital and creative agencies with under $1M in revenue.

Yes, we CAN service people over $1M (and as people grow with us they will be over $1M), but we are initially targeting a specific customer and size.

So now, our marketing, sales, production, etc. can be much more aligned and efficient.

We recently got asked to do some work for a company that was not an agency.

Was it tempting? Hell yeah, it was. Did we do it? Nope.

I’ve learned from the past that taking on this job would cause inefficiencies. We’re great at working with agencies –that’s our thing. Been running one for years (Jakt), so we serving people we know.

We could take on this client. Make some $$$. But we’d rather stay narrow and efficient.

And, here’s the thing:

What’s the real issue that’s making you spread out?

Why is it that many business owners feel the need to offer more than one (or even a few) services?

I think there are two reasons for that:

A scarcity mindset.

When you make decisions based on lack and fear, you limit yourself.

Some entrepreneurs are worried about making revenue to stay in business. So they take on everything they can –even if it’s not part of their core offering. Instead of going deep on one service, they go wide on many of them.

When you rewire your mindset towards abundance, you believe there are more than enough ideal clients that need your offering –no point on moving to other stuff just yet.

And what this leads to, is that you probably have…

A New Business issue.

This also comes down to an underlying sales and marketing problem…

If you are not generating enough leads and closing clients for one service, it’s easy to want to add other things on top.

The problem is that your New Business System is not working correctly. And that messes up the whole machine.

Fix it, and then you’ll see how you can hit your revenue and profit targets by specializing in one thing.

Should I Never Add Other Services?

That’s not what I’m saying.

In hindsight, I wish I would’ve gone deep into one service first.

I’d architect my machine to run by itself both from a New Business and Production perspective.

And, only then, I’d move on to something else. And I’d do the same thing again.

So, I’d go all in on one of the services –say LinkedIn ads for b2b SaaS companies between $2-5M in revenue. I’d set up the systems, people, and tools in place so that the business didn’t need me. And then, I’d add Facebook ads or whatever it was to it.

Stay Narrow and Niche Down

  1. Niching down will help you be more repeatable and predictable. It’s much easier to run a well-oiled machine when you specialize in service rather than many of them. Stay narrow.
  2. Spreading the number of your services often comes from 1) a lack and fear mindset or 2) a weak New Business system.
  3. Only add services when you have structured a machine that runs without you. Go deep first, then wide.