Find Your Niche in Contracting

In the construction business, change is a constant. Construction is impacted by the economy, the real estate market, home design, and much more. You’ll weather the market shifts with less stress if you have one or more niches in which you specialize. Learn why niches are key and how to choose your niche.

Why Every Contractor Needs a Niche

There are many compelling reasons to have a niche in contracting.

A niche gives you a ready-made area on which to focus your efforts. You can stay up to date on regulations, new technologies, new products, and design trends in this niche to offer the best advice to clients. It’s much easier to focus on outdoor living trends or energy-efficient building trends, than all things construction. Keeping up with the latter would be a job in its own right!

A niche also lets you market your company to customers who seek the service you can offer. Homeowners or businesses do not want a contractor who does everything. When they want a home addition or roofing services, they want to find a contractor who knows the most about home additions or roofing services. By narrowing your focus, then marketing aggressively, you can attract more customers who want your services.

Having a niche also improves your quality of life. If there’s something you enjoy working on, making it your niche means you’ll find each job more enjoyable. Put another way, specializing allows you to say no to all the tasks that don’t excite you.

To ensure a steady cash flow, many contractors specialize in several niches rather than a single focus area; however, if you’ve got a small company, you might only need a single niche.

How to Choose a Niche

To brainstorm your niche, think about the past jobs you’ve enjoyed. Who did you work for and what services did you provide? What geographic area do you serve, and is it cost-effective to provide services throughout the area?

Chances are, the jobs you most enjoyed will share one or more characteristics. As you answer these questions, you’ll come up with potential niches to explore.

A SWOT analysis, which stands for strengths, weaknesses, opportunities, and threats, is another way to determine your niche. Working with your top employees, list all of the strengths your company offers. A strength could be special knowledge, high-level skills, or another trait that sets you apart from your competitors.

Next, list your weaknesses. What do you need to strengthen to grow your business? Where are your competitors outshining you? By being aware of your weaknesses, you can boost your skills in these areas or choose niches that don’t require a heavy investment in areas where you are weak. For instance, if your crew doesn’t have the skill set to work on historic homes, then you wouldn’t want to offer historic renovations as a niche.

After you know your strengths and weaknesses, look at factors outside of your control: Opportunities and threats.

Opportunities are areas where your competitors are not paying attention, and where you can move in and shine. Perhaps you have an exclusive supplier relationship; that would be a natural niche. Or perhaps you have a strong client referral base in a particular area. That’s an opportunity, too. We’ve looked at modular construction as an opportunity recently. By getting into this niche early, you could corner the market, for example.

Your threats are areas where your competitors dominate the market as well as other forces, from employees leaving your company to regulations impacting your ability to perform.

Niche Business Ideas for Contractors

Are you convinced that you need a niche, but unsure what to target?

Niche markets include homeowners, businesses, property owners and landlords, or flippers and home renovators. Services these groups might need include bathroom remodel, kitchen remodels, home addition, home renovation, basement refinishing, landscaping and outdoor living, flooring, insulation, historic homes, energy-efficient contracting, and more.

Combining the two categories, you might decide to specialize in flooring for property owners and businesses, such as laminate flooring, hardwood floor refinishing, or tile installation. Or you might pick bathroom remodels for homeowners, or energy-efficient business contracting services.

Only take on as many niches as you can handle at the start. It might make sense to begin with one to two niches, then expand as you learn what the market needs, what you can afford to take on, and what you most enjoy. Adding new niches lets you learn, grow, and continue to challenge yourself throughout your career.