Business Niche: How to Master Your Niche for Recession Resilience – ep 136

Mastering Your Business Niche to Become Recession Proof

Hello and welcome to another episode of the Simple Marketing Show. Mostafa Hosseini here, bringing you another micro episode from our Recession Proof series. In these episodes, I share tips, strategies, and actionable advice to help you make your business more resilient in the face of an economic downturn.

As we hear from experts around the world, it’s clear that a recession may be coming our way. So, I’m here to provide you with the knowledge and tools to help your business survive and thrive, no matter what challenges lie ahead. Let’s dive into today’s topic: mastering your business niche.

Understanding Your Niche: Is It “Niche” or “Nitch”?

Some people call it a niche, while others call it an avatar or target market—whatever term resonates with you, go with it. The important part is identifying and mastering your unique business advantage. Today, we’ll focus on how you can use the 80/20 principle to discover that advantage.

In the past, we’ve talked about the importance of picking a target market and selecting a business specialty. Now, let’s dive deeper into understanding why focusing on your specialty is crucial for recession resilience.

The Power of Specialization in Tough Times

When a recession hits, businesses that specialize in something—whether it’s a product, service, or skill—are much more likely to survive. Those who try to serve everyone and do everything often struggle to stay afloat when things go wrong.

Specialization helps you stand out in a crowded market. If you’re one of the best in your field—whether in your city, country, or even globally—you’ll have a stronger chance of weathering the storm. This strategy is particularly valuable for businesses that have been established for two years or more and are generating solid revenue.

Step 1: Analyze Your Products and Services

To choose your business specialty, start by analyzing your products and services. Grab a list of everything you offer, and for each item, note the revenue it has generated over the past 12 to 24 months.

Once you have this data, sort your products by revenue, with the highest-grossing products at the top of the list. Then, apply the 80/20 rule: identify which products make up 80% of your sales, and focus your efforts on those.

Step 2: Evaluate Profit Margins

Next, consider the profitability of each product or service. The 80/20 principle will show you that a small number of products may generate the majority of your revenue, but not all of them may be highly profitable. For example, a product might bring in 21% of your sales but only contribute 2% of your profit.

It’s essential to evaluate both revenue and profit. For example, a product that generates 16% of your revenue but delivers 32% of your profit may be the better option to focus on. Specializing in high-profit products ensures that you’re not just selling more, but you’re also making more money in the process.

Step 3: Choose Your Specialty

Based on the analysis of both revenue and profit, choose a product or service to specialize in. If your top-performing products are already proving to have market demand, focus on those and look for ways to sell more.

If you find that certain products have low profitability, you could consider raising prices or reducing costs to improve margins.

Step 4: Ask Yourself Key Questions to Narrow Your Focus

If you’re unsure which product to specialize in, here are seven questions to help guide your decision:

1. Which product do I enjoy working with the most?
2. Which product do I know the most about?
3. Which product do others tell me I’m really good at?
4. Which product matches my personality and strengths?
5. Which product has the highest profit margins?
6. Is there a growing market for this product, or is it in decline?
7. Is there little to no competition for this product?

The answers to these questions will help you make an informed decision about where to focus your efforts.

The Importance of Choosing Wisely

It’s essential to remember that your business’s survival during a recession depends on making smart choices. By specializing in a product or service that you’re passionate about, have expertise in, and that has a proven market demand, you’ll give yourself the best chance to thrive even when the economy takes a hit.

Actionable Takeaways

• Analyze your products and services to identify which ones generate the most revenue and profit.
• Specialize in the products that give you the highest return and match your expertise.
• Use the 80/20 rule to streamline your business and focus on what works best.
• Ask key questions to help you pick a specialty that aligns with your strengths, market demand, and profit potential.

What to next…

I hope today’s episode helps you understand the power of mastering your niche and why it’s so critical to the resilience of your business. If you found this episode helpful, I’d love to hear your feedback. Did you apply these strategies? What results did you see?

Stay tuned for the next episode, where I’ll share another actionable step to help you make your business more recession-proof. In the meantime, if you’re looking for more guidance, check out the Simple Retention Formula. It’s designed to help you keep your customers, generate recurring revenue, and make your business thrive—no matter the economic climate.

Thank you for listening to another episode of the Simple Marketing Show. I’m Mostafa Hosseini, and I look forward to joining you again next time. Bye for now!