Entrepreneurs are always trying to stand out, and understandably so -- after all, there is a lot of competition out there. The need to stand out becomes even more vital in light of the recent Covid-19 pandemic. Some 55 percent of small-business owners currently expect it will take at least six months for the economic situation to get back to normal.

So what's the best way to stand out, especially if your business operates in a particularly crowded niche? The solution isn't to try to go bigger. Instead, it's the opposite.

Identifying with more passionate audiences

While it is true that many sub-niches have a smaller potential audience than the broader niche, these smaller segments tend to be more tightly connected. If your product or service is a hit, it is more likely to take off on a community-wide level.

This is the case with Winston Chen, who developed a text-to-speech app designed for individuals with visual impairments and learning disabilities. In an Inc. interview, Chen noted that sticking with these sub-niches actually enabled him to forgo spending on marketing and enjoy growth through word of mouth alone.

Underserved sub-niches tend to have less competition, because many brands deem the smaller market as not worth targeting. Chen's ability to make a living and maintain a good work-life balance shows that focusing on a smaller niche can be just as viable for achieving financial independence.

Many sub-niches feel neglected by the industry at large. Simply being the first to make them a priority could result in tremendous customer loyalty you'd never achieve otherwise.

Strengthening your own offerings

Targeting a smaller niche also gives you the opportunity to reevaluate and strengthen your brand. I recently had the opportunity to speak with Alexandre Mourreau, co-founder and director of Future Photography. Mourreau's company uses a small group of photographers and videographers, who each specialize in a specific type of photography, such as fashion or supercars.

Mourreau explained that generalist photographers rarely become the best in their niche. Those who focus on a particular subcategory of photography are eventually seen as the go-to resource when those types of photos are needed. Because they have put in the time and effort to develop that particular skill, there is far greater demand for their services than if they had remained a generalist.

Niching down gives you the ability to identify your brand's strengths and weaknesses. For example, there is a big difference between writing technical reports and blog posts. If you're a copywriter and you've realized that technical reports are your bread and butter, there isn't much reason to keep writing subpar blog posts.

By shifting your focus to your area of strength, you can continue to develop that ability and be better able to deliver high-quality results for your clients. Satisfied clients will naturally lead to referrals, growth from repeat customers, and the ability to charge a higher premium for your services.

Finding the right sub-niche for your brand

Not all sub-niches are created equal. Finding the right sub-niche requires evaluating your brand's strengths and weaknesses, identifying gaps in the market, and ensuring that there is a sizable enough audience for you to reach.

Believe it or not, a simple search on Google or Wikipedia could be a good starting point for identifying a sub-niche. Google's auto-complete and related search suggestions are essentially a glimpse into potential sub-niches your brand could target. Reading blogs in your niche could also inspire ideas for underserved sections of your industry.

As just one example, a Google search for "exercise programs" brings up related ideas like "exercise programs for seniors," "best home workout programs for weight loss" and "workout plan generator."

Those are three very different ideas. But each presents a viable sub-niche that a personal trainer or exercise company looking to niche down could consider pursuing.

Of course, after you identify a potential sub-niche, you'll need to dig deep to determine if there is a big enough market for it. Google Trends data, industry stability, and pricing standards within the sub-niche can all help you determine if an opportunity is worth pursuing.

Shrinking your potential target audience may feel counterintuitive at first. But it ultimately gives you the chance to become a big fish in a much smaller pond. By strategically pursuing the sub-niches that will work best for your brand, you can increase your profitability and better define what makes your company unique.