Yes, there is a correlation – buyers often seek niche players as a way to enter a new market. But there is no causality; moving into new market niches does not necessarily establish you as a niche player and it may have the opposite effect.
Falling for the fallacy can actually decrease your market value. If you are spreading yourself too thin, becoming unfocused, or blemishing your income statement, then you are likely making yourself less attractive to potential buyers.
Niche players become successful because they know their market, not because they decided to pursue a niche. The physical therapist launches her staffing firm with tight relationships and an intimate knowledge of rates. She does it because that’s what she knows, not because she thinks it’s cool to enter a market niche.
Like Moliere’s Monsieur Jordain who was delighted to find out that he had been speaking genuine prose all along, she may one day wake up and find out that what she thought was an isolated and unimportant market that no one else worked was actually a market niche.
Look at your business. What do you do uniquely? Maybe you’re the only one who stuck it out in the tough Peoria market for quality factory workers. That might not seem glamorous, but for a potential suitor wanting to get into that market, you may well be an attractive niche.
