Overreach is one of the biggest mistakes made by entrepreneurs. Despite the mountains of evidence supporting the concept of niche marketing, startups have a hard time fighting the urge to try and be all things to all people.

 

The impulse to abandon the niche strategy and go for the bigger prize is understandable. After all, if having a hundred customers is good, a thousand must be better. In this case, intuition is a poor business partner. To suddenly dump 10X the customers on a small business would be catastrophic in most cases.

 

It might surprise you to learn that the vast majority of small business owners have no desire to grow their business. This was one of the findings from a study by Erik Hurst and Benjamin Pugsley of the University of Chicago. Meteoric growth is not the brass ring for which every small business owner is reaching.

 

It is more important to be a right-sized business than a growing business. That is true whether you are a software developer or a hairdresser. One of the key reasons startups end up overreaching is they have never considered what the right-sized business looks like for them. Here are a few others:

 

Be Realistic

 

Many Entrepreneurs dream of becoming the next Steve Jobs. And that’s a real problem because Steve made it look easy. Companies the size of Apple, Microsoft, Google, Amazon, and Facebook seem to defy the rule of finding and sticking to a niche.

 

However, the appearance of universal appeal is an optical illusion. Each of those companies owes their success to mastering their niche. Apple does not make products for everyone. They have a narrow appeal that happens to run very deep. They are interested in the top of the market, not the fat middle. Microsoft makes their money from enterprise services. Google is an advertising company.

 

Each of these companies know who they are. When they go off track, it is almost always due to forgetting their niche and reaching for someone else’s piece of the pie. Even the big companies are very focused. So don’t fall for the illusion that they defy the niche strategy. They don’t defy the niche. They define it. Any appearance to the contrary is an optical illusion.

 

Establish a Base

 

Even if you are planning a meteoric rise, it is important that you establish a solid base. Your base consists of two parts:

 

1. Your first minimum number of steady customers that keep you in business. If you fail to gain other customers in other markets, your base will sustain you.
2. Your first business identity, product, and service that gained you your steady customer base in the first place.

 

A well-established base is a safe place to which you can always return if that becomes necessary. It is your fallback position, and the place from which you can build again. If you do not establish that solid base before reaching higher, you have no safe place to return.

 

Your base is your first and most important niche. Make sure it is always super-served.

 

Be an Expert

 

The way to become an expert is to narrow your niche. Don’t just make candles. Make artisanal, organic candles sourced from local materials designed for religious ceremonies. Now that’s a niche. Not everyone is going to want one of those. But everyone who does will want it from you.

 

Once you establish your area of expertise, you can slowly branch out. But you might not want to branch out if you find that your niche is satisfying. You might actually make more as an expert in a small niche than you would as a generalist in a large one.

 

Super-serve, Not Super-size

 

Success is in super-serving a loyal base, not supersizing your business to an unmanageable level. There are challenges large businesses face with which small businesses needn’t bother. Those challenges come in the form of investors, regulations, employees, and infrastructure.

 

None of these are bad in and of themselves. But they are challenges that can apply downward pressure to cashflow, life-balance, and focus. Remember Steve Jobs grew Apple to the point where he was no longer welcome in his own company.

 

You can never reach your brass ring without entering through the golden niche. Every successful company is well-defined, with an established base to count on when times are tough, expertise in an area that makes them unique, and a super-served core that has helped them become super-sized.