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How Niche Micro-Companies Will Rule the Business World…

We live in a world defined by personalization and unique product offerings. Thanks to the rise of technology that allows the customization of everything from music playlists and car amenities, to news articles to takeout orders, there is no longer such a thing as “one size fits all” in the marketplace. Smaller cultures that function within the wider culture are becoming more common, as is the acceptance of a variety within tastes and lifestyles. The marketplace is changing rapidly to accommodate this new culture of diversity. And it’s doing this through niche micro companies.

Related: 7 Steps to Defining Your Niche Market

“Niche micro businesses” is a term for a business that operates on a small scale and is uniquely specialized to fill a particular consumer need. We predict that these companies will soon be cropping up everywhere, as technology takes away the large advantage huge enterprises have. Industries will no longer be ruled by a few large companies, but instead will be controlled by thousands of micro companies which are far more agile.

What is a niche micro company?

Niche businesses are nothing new. Though today it’s easy to imagine that the world has always been full of Walmarts and Targets, those business models only rose to prominence in the last 75 years or so. Before the big-box grocery store, people shopped at the butcher, the baker, the produce stand and the dry goods store to find everything that they needed to run their households.

There were specialized services to style men’s hair versus women’s hair, and stores that catered to shoe and watch repair. Main Street was lined with little stores run by small-scale experts focusing on a single product or service, people who knew one particular area inside and out. Now, that model is coming back, but with modern twists, thanks to changing technologies.

Today the idea of a niche businesses is on the rise again, and it’s defined as a business that caters to a specialized market, one generally neglected or forgotten by larger companies.

Examples of niche micro companies

Micro-companies may be innovative twists on old ideas, completely new innovations or throwbacks to lost ways of doing things. There is a wide variety of angles for this business model, and it can mold to any area or section of the economy. Some common micro business are: boutique fashion shops, food trucks and craft beer companies. Here are three outstanding examples.

CW Pencil Shop — New York, NY. Yes, apparently people still write by hand with actual pencils! This unique store was founded in 2014 and offers both new and antique pencils for sale. This is an excellent example of a business catering to a very specific need. There’s even a Pencil of the Month club.

Alchemy Goods — Seattle, Wash. Sustainable goods are a hot niche market catering to consumers concerned about environmental issues. Alchemy Goods double-dips into the niche, specializing in bags and accessories, but also targets sustainable manufacturing practices. The items once found at a leather goods shop are now available with a modern twist, and the model has worked for Alchemy Goods for more than a decade.

Drybar — Brentwood, Calif. Proving that niche businesses can compete in crowded marketplace, Drybar takes on the salon industry by offering women precisely what they want: simplicity and service. Offering only blow-outs (blow-dries for hair that last up to a week) and no cuts or color, Drybar has seen exponential growth in just six years, thanks to its niche. From its start at just one location in California, this micro-business has mushroomed to nearly 60 locations across the country, with more on the way.

Related: Find Your Niche in 60 Minutes or Less With These 4 Questions

The Benefits for Entrepreneurs

There are an incredible number of benefits to starting a niche micro business. For an entrepreneur, this model is in many ways the perfect way to get up and running, as it fits so many of the basic tenets of successful startups:

Easier to operate. Smaller companies are easier to operate. They have lower costs, less confusion and fewer employees. Thanks to the recognition that a niche micro company can’t and won’t compete against a broad swathe of competitors, these entrepreneurs are able to set targeted goals and business plans that have an air of simplicity and straightforwardness.

Focused. Pinpointing a precise service or product allows the entrepreneur the chance to develop an in-depth knowledge in a particular area. That kind of focus hones skills and creates a better business. There is simply less noise to deal with in a niche micro business, in every area.  

Marketable. It’s much easier to target a very specific customer base than it is to try it hit a wide audience. Modern marketing techniques allow advertisements and connections to be made with targeted communities, lowering marketing costs and allowing higher returns on those marketing dollars.

Less competition. By their very definition, companies in a niche marketplace have less competition. Though larger companies may offer some of the same services or products, they definitely won’t do it as well as a micro-business simply because they can’t be experts in everything. Niche businesses also have a lower barrier of entry, because starting a business in a less crowded space offers the opportunity to stand out.

The impact on the business community

Expect to see more and more of these specialized concepts hitting the marketplace in the years to come. The niche business model is perfectly suited to today’s personalized economy, where people are clamoring for the kind of expertise that only a laser-focused model can offer.

This new economy is being driven not only by the consumers who can get the products and services that they really want, but also by entrepreneurs who are finding that they can follow the passions that bring them fulfillment while also finding financial success.  

What all of this adds up to is a shift in focus for the business community, in which businesses will increasingly move away from offering everything for everyone to realizing that an effective path to success is a focus on just one idea done extremely well. It’s better for business to be an expert at one thing than to have a broad offering but little expertise.

Related: 5 Lessons Entrepreneurs Can Learn From Niche Marketplaces

Clearly, too, larger, less focused businesses will find themselves losing market share to niche micro business that can do a product or service better. Niche micro business are the future, and entrepreneurs are leading the way.

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