Building your business: Have you found your niche yet?

Richard Tubb

You often hear that as IT Solution Providers or Managed Service Providers (MSP), when it comes to building your business you should be looking to focus on serving a niche – a focused, targetable part of a market.

The advantage of focusing on a niche market is that you direct your services, solutions, expertise and marketing towards addressing the needs and desires of a smaller market that you understand deeply. In turn, you differentiate yourself from other IT companies that may cast their net wider. If you were a customer, who would you rather work with? An IT company who professes to be a generalist, serving all, or a specialist who understands your business inside and out?

So the benefits of niching to your IT business are tangible. The challenge for most IT companies is, how do you find a niche that is suitable for your business?

You may already have some niche expertise without even being fully aware of it! Ask yourself these questions to see if you may have a potential niche to explore.

Are you an expert in your customers’ industry?

The first and most obvious question to ask when deciding upon a niche is, do you truly understand the challenges that are specific to that niche?

The chances are that you already have one or two clients in a specific vertical industry market – clients that work in a particular occupation or industry.

For instance, when I ran my own MSP business, we found ourselves working with a number of recruitment consultancies and engineering businesses. Over time we understood the challenges those specific niches experienced. In the case of recruitment consultancies, it was high turnover of staff. With engineering businesses, it was improving processes and efficiencies.

We also found that we became experts in the software that these industries used. In the case of engineering businesses, the software they used – such as AutoCAD – and the hardware they used – such a large form Plotters – was used by many engineering companies. Our knowledge in the deployment and support of that particular software and hardware then became transferrable. This was very valuable to other engineering companies who were frustrated with IT companies not fully understanding their typical infrastructure set up.

Ask yourself whether you already have deep knowledge of some of your clients’ specific business challenges and whether those challenges also apply to other similar businesses in the same industry? Chances are that they do, and therefore you hold niche expertise.

Can clients in the niche afford you?

Having deep knowledge of a specific industry niche is not enough to make a decision that your business will specialise in that niche though.

You’re in the IT business to help people, and to do so while making a profit. With that in mind, can the typical customer in the niche you’re considering pay well?

In my own MSP’s example, we found that while recruitment consultancies had a need for what we did, they were often notoriously poor customers due to the feast and famine nature of their work. This meant they were often late-payers for our services. Research told us that other recruitment companies suffered a similar challenge. Not a niche we would want to work in.

Engineering companies, on the other hand, enjoyed the Managed Service model that we offered. A flat-fee model that was consistent from month to month fitted in with their annual budget. For that reason, we found the Engineering niche one that was a great fit for our business solutions.

Are clients in the niche easy to work with?

Finally, when exploring a niche you might work within, it’s worth asking yourself if the typical client in that niche is easy to work with.

You might argue that any customer who can afford your services and solutions is the right client, yet working with a customer who is difficult to deal with or one who doesn’t value your time and expertise can be a very frustrating experience.

Out of the potentially niche’s that you are considering working in, consider the clients you are already working with. Are they easy to work with? Do they listen to your advice and value it, or do they ignore what you tell them and get themselves into a mess, which they expect you to bail them out from.

Choosing a niche based purely on the customers’ ability to pay you could lead you to a world of frustration. The typical attitude of a customer in a niche is something to strongly consider.


The benefits of your IT business working within a niche are that you can focus your expertise and efforts on becoming an expert in a specific market in which you’ll have less competition and more demand for your services.

When exploring a potential niche to work in, consider the clients that you already work with. Which ones do you already have deep industry knowledge of? Of those clients you do have deep industry knowledge of, which are easy to work with, value your time and experience and importantly, can afford to pay for it and consistently do so without causing you problems?

The benefits of niching are many – I’d encourage you to take a look at your existing business to see whether you might have niche experience that you could begin to exploit as you grow your MSP business.