Ignore this at your own risk: How to find a profitable niche for your consulting business: Part 1
You’ve got what you think is a great idea for your consulting business, and you’re convinced it’ll make you millions–or at least enough to quit your day job.
Let’s say your idea is to become the foremost consultant on, say, ferret foot care. You spend a ton of money and time on marketing materials, countless hours of cold-calling, and months of work, all to find out that nobody really cares about ferret foot care.
Well, maybe you find out that there’s a teenager in Frijoles, New Mexico with a basement full of ferrets who cares a great deal about it. But in the end, that’s not enough of a market for a business. And you’ve wasted a bunch of money and time to find that out.
Niche? What’s that?
A niche is nothing more than a focused part of a market. Members of a market niche have more specialized needs. For example, pets, pet care, and pet products is a market, and a niche within that market could be ferret foot care. Problem is, there’s probably not a big enough market to earn a living in ferret foot care.
On a related tangent, project management is a fairly broad niche within consulting, and there are loads of people with project management credentials, experience, and skills. If you’re looking for consulting projects in that niche, you’re going to have a harder time getting noticed among all the other project managers, and you’ll likely have to settle for a lower hourly rate since there are so many other project management consultants who’d be happy to take on a client for less.
You need to focus on a niche that has enough but not too much competition. It’s like Goldilocks looking for just the right bowl of porridge, the perfect chair, and the most comfortable bed.
So what’s a consultant to do?
Here’s the secret: While most career advisors will tell you to broaden your skill set, focusing on a smaller niche will mean that you’ll need to be more specialized. Becoming more specialized might sound risky, but it’s not–if you choose the right niche. In fact, consultants who are more specialized have less competition and can charge more than consultants who have more generalized skills.
Not convinced that you should be in a smaller, more specialized niche?
Why you should care about targeting a niche
- There’s lower competition in a niche. Fewer consultants will have the specialized skills or experience to meet the needs of clients who are in a niche.
- You can charge more in a niche. Because of your more specialized skills–along with the law of supply and demand–you can charge more for your services.
- Your customers will likely be seeking you out for your specialized skills and experience. If a client in a niche needs consulting services, they’ll look for a consultant who’s knowledgeable in their niche, since that knowledge will translate into a more tailored service that better meets their needs.
- Niches sometimes have barriers to entry (for example, product-specific knowledge), which lead to less competition and higher rates. Not everyone knows how to implement or use XYZ enterprise software, but if you do, you can enter a niche market and have fewer competitors.
- Since there’s less competition, it’s easier to get noticed and become known as an expert in a niche, which allows you to do less marketing (clients come to you) and charge more as an expert.
Great, but how do I find a consulting niche?
- First, evaluate your skills and experience. Think you don’t have any? Think again. Everyone has experience and marketable skills. My 10-year-old son has marketable skills: he can tell you which Pokemon cards and Star Wars Lego figures have the highest demand (now, if he’d only clean his room…).
- Which are your most marketable skills, what are you best at, and what do you most like doing? The answers to those questions might be different, but that’s OK. You’re brainstorming here.
- Which skills have the most demand? For example, which skills return the most results when searching Monster.com?
- Likewise, which skills pay the most? I don’t know about you, but I like to get paid as much as possible for my work.
- Start narrowing things down. Within a broad skillset (project management), you might want to focus on a profitable specialty (e.g., Salesforce implementation and/or customization); for web development, you might focus on e-commerce. You get the idea. You’re trying to narrow things down to give you some ideas for lucrative niches that you might want to pursue.
Use keywords to research a consulting market niche
This is a little-known but fantastic way to do your market research.
Marketing companies spend thousands of dollars trying to figure out markets. But with keyword research, you can get accurate, up-to-date info on your target market fast, and for little or no cost.
At its most basic, keyword research is simply looking at how many people searched online for a particular word or phrase. Along with the search volume stats, you can also see how many websites are competing to be found for the keywords, how much they’re paying for Google ads for the keywords, etc. This is powerful information that can tell you a lot about a market.
Keyword research can literally save you thousands of dollars and countless hours of wasted time.
What I’d recommend is that even if you think your niche will be the next greatest thing, do some keyword research to find out if there are already people searching for it. Chances are, if people are searching for it, they’re willing to pay money for it.
So, unless you have money and time to burn, you’ll do some keyword research.
Where to start with keyword research
Now, you’ve identified what you think are your most marketable and/or profitable skills. Next, the trick is to find keywords with high search volume but low competition. The best way to do that is to use either Google Adwords or Market Samurai–they’re both great tools for keyword research. Google Adwords is free, but Market Samurai has a one-time cost. However, Market Samurai’s automation and reporting features can literally save you dozens of hours compared to Google Adwords; the time you save will pay for the product cost many times over.
Whew! That’s a brain-full!
Rather than keep blathering on about this, I’m going to split this topic into a couple posts, since there’s a lot more to cover.
Check out Part 2:
In the next installment, I’ll talk about:
- how you can figure out if a niche is profitable
- how you can get known in a niche
Let me know!
- What do you think?
- Do you already have a niche in mind?
- How did you choose it?
- What market research did you do?