Episode 115 – Niche Market Strategy: Episode 115: Mike Cmapion LIVE
Niche Market Strategy
Today Mike coaches Kevin Smith from Grace Professional Cleaners from Omaha, NE on niche market strategy. Kevin wants to know if he should add commercial and residential BBQ grill cleaning to his commercial cleaning company.
I am not a fan of we do residential, we do commercial, we do little old lady’s houses! Pick a niche and stick with it!
In this case the price per unit isn’t high enough to justify the cost to acquire the customer and your time and work for a one time service.
BONUS TIP: You want your niche service to be scalable.
The flip side is, if you already have a commercial or residential client and you can clean their grill for $200 that’s a really nice upsell service you can provide. But as an ongoing sol niche, it will be difficult to generate enough clients to sustain your business each month.
If your cost to acquire a customer is $50-100 and your service is $200 a month, that’s somewhat justifiable, because you can expect that customer to stay with you at least a few months. But with a one time service, you have to go out and get a new customers continuously, making that $50 a much higher percentage of your profits.
BONUS TIP: With once a year customers, if your services are too cheap, your client value drops too low to make it a viable business.
It’s tempting to want to branch out to other niches based on the hope that your current business will bring in that extra business. But it’s really a one in a million chance that a residential client is going to lead to commercial business or visa versa.
Be intentional about your niche, and do only your niche and do it better than everyone else out there.
If I were to start up a cleaning company today from scratch it would be a commercial cleaning company. I would rather sell one customer at $4000 a month than 10 customers at $400 a month.
But that’s not to say that there’s not money in residential cleaning. It’s a matter of lifestyle preference and goal preference.
You need to be clear on what your goals are. How much money do you want to make, what do you want your hours to be. Who do you want to serve? What do you want your business to look like today, in a year, in 10 years?
Then pick the business and niche that best suits that!
If $5000/mo and 40 hours a week is your goal, reverse engineer your work to reach that goal. You will need to know how many hours it takes to acquire a customer and service them, then divide that into the hours you want to work and the dollars you need to make to earn that$5000/mo. That’s the best way to know if your niche market strategy.
BONUS TIP: a lot of the time your niche will change.
You may start out with a specific niche and then as you get older and mature your business will morph and grow into the business you really want.
Get a mentor and do what they do.
Don’t rush a quote.
Trust in God.