A reader writes in with an excellent question:
Would you start as a generalist or focus on a specific type of consulting, and if one specific niche, how would you narrow it down?
I’ve got a lot of thoughts on this, and the fundamental answer is “The Riches are in the Niches.”
The more specific you can make your niche or market, the better. The more money you’ll make, the easier your marketing will be, etc.
That means you want to move away from niches like ‘Small Business’ and move towards niches that are targeted and specific. Like ‘Veterinary Clinics’ or ‘Accountants’ or ‘Direct To Consumer Apparel Stores on Shopify.’
When I’m evaluating a niche, I approach it with a few questions. The goal of asking + answering these questions is to get a small set of starting points for market research. (This helps you go from from ‘all possible markets/niches’ to ‘a small set of possibilities’).
Q1: What are niches, industries, or types of businesses (e.g., “business development for
Q2: What are niches, industries, or markets that you are interested in? Where do you spend your time? Got X years of reading about ____? (e.g., hobby and gaming stores, dentists)
Q3: What problems are interesting to you? What problems do you have the skills to solve? What problems do you want to explore and spend time with? (e.g., how do we sell more, more often to our best customers and clients?)
- Make a shortlist (~2) of the niches/markets/industries from Q1 and Q2 that most interest you
- Make a shortlist (~2) of the problems from Q3 that most interest you
- Combine the niches (e.g., ‘dentists’) with the problems (e.g., ‘how do we sell more, more often to our best customers and clients’) so you have ~4 combinations
- Start your market research. Search around online and see if you can find material that confirms that problem is something that industry/niche/market experiences and actively spends money to solve. (e.g., search on Google for service providers serving that niche and helping with that problem, search on YouTube for videos of conference talks for that niche about that problem).
Once you find an active niche + an actual problem, you’re ready to move into 1-on-1 market research conversations, but that’s a topic for another letter.