When plotting a course for business development, small businesses have one of two main options. They can either be generalists, appealing to a wide audience with an equally wide range of products and services, or specialists, targeting one specific audience with specialized needs. But is one approach inherently better than the other? Is it advantageous to target general or specific audiences?

Advantages of Specialism

In a specialist approach, you’ll focus on a smaller, more specific target audience with your products and services. These are the main advantages to this approach:

  • Higher relevance. First, you’ll have higher relevance with your target market, which often allows you to outcompete your generalist competitors immediately. For example, a Subaru repair center works almost exclusively with Subarus, while its generalist counterparts focus on a wide range of international vehicles. If you’re a Subaru owner, ignoring cost, which would you feel more comfortable working with? Specialists understand their products and their target markets better, and stand out more in a competitive landscape.
  • Higher efficiency. Specialists also have the opportunity to work more efficiently, in multiple ways. For starters, their employees need far less training, since they’ll be focusing on a narrow range of products and services. You’ll also pay less in marketing and advertising, since you’ll be focusing your marketing efforts to target a small audience, rather than a large one.
  • Fewer opportunities for error. Assuming 10 percent of the products you create will have defects, offering 10 products will result in an average of 1 defective product, while offering 1,000 products will result in an average of 100 defective products. Working as a specialist, you’ll have fewer opportunities for error and failure to worry about, and since all your employees will be well versed in your range of products and services, they’ll be able to act quickly to make the relevant fixes.
  • Rapid improvement. Working with one identifiable, small target market means you’ll be able to gather more information about your products It also means you’ll have fewer products to worry about, meaning you can update them rapidly. Collectively, this means your customer feedback loops will be short and powerful, allowing you to make significant sprints in a fraction of the time it takes your generalist counterparts. If you’re aiming for fast growth, a specialist approach is essential.

Advantages of Generalism

With a generalist approach, you’ll focus on a bigger, more general audience, instead, earning you these advantages:

  • Wider audiences. In a generalist approach, you’ll have far more people to potentially target. For example, if you focus exclusively on sports nutrition drinks, you’ll artificially limit the number of people your brand can appeal to. If you take a wider approach to soft drink manufacturing, you can target many demographics at once with segmented product lines, typically multiplying your potential target audience many times over.
  • More products per customer. In addition to being able to target a higher number of people, you may also be able to offer more to each customer you enroll. For example, you could offer new products and services to your existing clientele as a way to get more cross-buys, and therefore more revenue per customer. Combined with the fact that you’ll also have more total customers, this could be a more lucrative approach.
  • More room for expansion. Generalist employees tend to get better job offers than specialist employees. Why? Because they can grow in more directions. Specializing in multiple fields at once gives you the ability to pick and choose which areas you want to develop in the future; for example, if you produce both chocolate and peanut butter, you may one day decide to expand your peanut butter products only due to the high sales you’ve experienced in that area.
  • More wiggle room with error and failure. Dealing with many products, many services, and many different demographics at once also gives you the ability to hedge your bets. If one department or focal area fails, you’ll have plenty of backups to make up for the damage. For this reason, generalism is often a better long-term approach. What’s important to keep in mind, however, is that adopting purely long-term strategies can be dangerous for a new entrepreneur or small business owner.

The Bottom Line

Obviously, there are advantages and disadvantages to each approach, so it’s impossible for there to be any single correct answer here. However, because small businesses often start with limited resources and a limited audience, in most cases, it’s better to start as a specialist. As your business expands, it may be in your best interest to expand to become a generalist, but most businesses will be served well by opting for a specialist approach.

AuthorJenna Cyprus is a freelance writer from Renton, WA who regularly covers tech, business, marketing, and social media. Follow her on Twitter.

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