The Ultimate Guide to Starting and Building Your Consulting Business
Strategies, Tactics, and Tools to
Help You Build a Thriving Consulting Business
How to Find Your Niche
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Choosing the type of consulting you want to focus on and a niche that matches your interest, expertise, and financial goals are critical to your consulting success.
You want to select one or more niches where,
- You have purpose, interest or passion in the niche
- You can solve their high-value, bottom line problems
- You can resize, repackage and rechannel your consulting service to meet their needs, regardless of pandemic or social distancing
- You can reach a high-volume of narrowly defined clients across a broad geography
- You can create a unique brand or defensible position
Choosing the Right Consulting Niche is One of Your Most Important Decisions
You can choose your type of consulting and niche based on your past work, your passion, or just a “gut feel”, but if you are wrong you will waste time, money, and opportunities.
A better approach is to use a seven step process to validate your consulting niche before you waste time and energy. This approach starts by taking an educated guess (your hypothesis) at what you think are your best skills and solutions as well as good industries to target. After that you follow the seven steps in this guide to validate your guess and to see if there is a better niche.
You don’t want to waste time and money trying to build a consulting business in the wrong niche!
General Business Consulting Will Kill Your Business
Some consultants avoid picking a niche. They think that if they try to be everything to everyone they will have a wider market and therefore more business. This could not be further from the truth.
Being a general business consultant will kill your consulting business. Few clients will believe a “generalist” can solve their problems. Being a generalist makes you matte grey – you blend in and are forgotten.
Being a Generalist Makes You Invisible and Your Expertise a Commodity!
It is far better to approach specific prospects as an expert in their problems and show that you have experience solving it. Case studies of clients you have helped or industry case studies about the methods you use are a good way to prove your authority and build trust.
No Experienced Commander or
Book on Strategy Says,
"Attack on All Fronts and You Will Win."
Always look at your consulting offering from the point of view of the client.
Imagine a medical scenario where you need a heart valve replaced. Would you want your general practitioner to do the surgery or would you want a surgeon who specializes in heart valve replacement?”
Both types of doctors might do great work, but a specialist in heart surgery will have a greater success rate at this job. In turn the surgeon will get more referrals, have a higher success rate, receive greater recognition, and have higher income.
Don't Focus Too Narrow, Too Soon
Until you have a lot of experience and contacts in a narrow niche, you may not want to focus too narrow. Once you do more work within that wide niche you may discover a narrower niche where you can create greater value.
While I haven’t fished since college, many fishing analogies come to mind for going wide vs deep. For example, you may be catch-and-release fishing in a stream with lots of feeding trout. You are doing your best with “your favorite lure,” but you only have a few strikes. It’s tempting to keep trying with the same lure, but it’s frustrating because you think you should be doing better.
You watch the stream and see where the trout are rising to the surface and feeding on insects (validating the niche). Then you catch a few of the insects that are hatching and seeing what the trout are feeding on. You a lure (the offer) that matches what the fish (your client) wants. Now you’ve improved your odds significantly. You have the right place, the right time, the right offer for the ideal client.
A real consulting example like this might be a human resources consultant who sees that biotech is growing. Doing general human resources consulting gives her some business, but the biotech industry has so much growth it seems she could have more business. She talks to people in the industry. She tests different ideas and finds that hiring and onboarding advanced biotech researchers gives her much more business, higher income, and a greater feeling of contribution.
Mapping Your Niche and Scope
You could begin casting about looking for an industry, niche, and problems. But, that would be a waste of time, and you might be distracted into researching and testing a small niche that looks good while missing one that is far better.
If we go back to the fishing analogy, you want to avoid fishing in a small creek with “good enough” results while there is a great fishing spot just around the corner.
But, how do you know where to look?
A good way to map your opportunities is to create a 2 X 2 matrix that maps industries, your skills, and client needs. By seeing opportunities in a grid you can identify adjacent niches and new areas of opportunities.
For example, your primary area of work might be facilitating strategy sessions with executives and department heads. You could use the same facilitation skills to help departments identify their objectives, key results, and tasks. You could further expand into helping departments and IT identify the metrics needed to reach the strategic objectives. Using this approach of looking for adjacent needs you can serve can turn a one-time consulting project into multiple projects for the same client.
Seven Steps to Finding Your Niche
The Starting and Building a Thriving Consulting Business course guides you through the seven steps for finding a good niche. Step-by-step guides, videos, and links to resources help you find industry growth rates, common problems in different industry niches, and how to validate whether it is a good niche.
Creating a map, like the grid shown above, is a good way to keep track of industry segments that are interesting, the problems in each segment, and your skills. Start with a large grid and narrow it down as you learn more.
Make sure you validate your niche using some of the methods below before wasting time, energy, and money in the wrong niche.
1. Where is Your Expertise and Passion?
What are your key skills? What work do you love to do so much it doesn't feel like work?
Make a list of skills you are expert in. Later, you may want to add skills you need to learn more about so you can increase your value to clients.
Create another list of passions and high interests.
If you need to advance your knowledge or skills, there are many free courses given by online (MOOC) colleges and universities.
2. Which Industries and Segments Should You Target?
Use the US or your country's Census Bureau and Bureau of Labor Statistics databases to find forecast growth rates for different industry segments. The course, Starting and Building a Thriving Consulting Business, gives you links into many databases and teaches you advanced search techniques. It also shows you how to get free access to costly industry databases.
An extremely important criteria during the COVID-19 pandemic and recovery is choosing a segment that has high-value opportunities as well as the ability to pay and the chance to grow into a long-term client.
I have done weeks of research to find the government and private databases showing which industry sectors have been impacted by the pandemic, isolation, and recession and how they are reacting. This gives consultants a great view into which clients will give them the greatest success.
In any environment, even one as terrible as that created by COVID-19 and its impact on economies and society, there are consulting opportunities, but you must be agile. For example,
- Finance and accounting consultants can ally with attorneys to assist in bankruptcies and restructuring.
- Strategy consultants can help pivot to new strategies and identify new markets.
- Human resource consultants can identify critical strategic skills, ensure legal compliance with downsizing, develop agile and rapid rehiring.
- Operational performance consultants can redesign workflows and improve performance with fewer employees.
- Training and development consultants can capture work knowledge before it is lost and build rapid retraining programs to assist in restarting.
- Branding and marketing consultants can help companies communicate new market positions for products and the rapidly changing social structures.
There are many opportunities, but you will probably need to pivot, restructure, repackage and reprice your services.
3. What are the Critical Pains and Needs in the Niche?
If you aren’t already familiar with a niche and its common problems, there are many ways to learn what they are,
- Search Google for lists of problems or "issues" in an industry
- Search Quora and Redditt for frequently posted questions
- Read industry forums and blogs
- Go to online meetups and talk with people
- Interview people in the niche you are researching
Before you open a discussion with a lead or prospect in a niche, you must know what the common problems are in the niche and know the language uses to talk about them. Without that base of knowledge you immediately show your lack of experience or niche knowledge.
4. Is There Demand?
Talk to people in the niche about your idea. Are they genuinely interested? (Don't trust the "interest" shown by friends and relatives.)
Next, look at online job sites, like Indeed.com, and see if the niche is hiring internal consultants or experts in that area. Are there Amazon books and Kindles or podcasts devoted to the topic?
If you find low interest or few resources, then move on to another niche. If there was gold in this stream someone else would be panning for it.
5. Are There Enough Accessible Prospects?
Guess which manager or role would hire you, for example, how would you identify them by seniority level, job title, or other qualifier. Can you find them by searching on LinkedIn? Can you search Google and find a lot of companies that might be prospects?
In the course, we show you how to use Google’s secret categories along with Boolean Search Strings to get lists of ideal companies.
With the correct search methods you will be able to find, connect, and engage with your ideal clients on LinkedIn.
6. Are There Consulting Competitors? (You Need Them)
Do a quick Google search to see if you might have competitors and what they offer. Use a search like
biotech HR consultants
Add “consultants” at the end of the niche descriptor.
If you do local consulting, add the term "near me" to the end of the search term.
You want to have competitors. It proves there is a market. When you are in the course, you learn how to find out competitor’s highest value blog topics, keywords and more.
7. Validate Your Niche and Offering
NEVER spend time and money developing a consulting business until you prove that your consulting offering is valued. While talking to people in the niche gives you a little bit of an idea, it won’t prove the monetary value and demand in the niche.
Don't move forward until you have validated your niche(s)! Use a Minimum Viable Offer (MVO) to see if prospects are qualified and willing to spend time or money. They must be willing to spend either time or money on your MVO as proof they value it.
A few low-cost ways you can test an MVO in a niche is by creating an offer that requires a time or (low-cost) commitment from the prospect and is easy for you to create. Some MVOs that work well are,
- Low-cost seminars or webinars on the topic.
Measure the response rates and gather feedback.
- Emails to your niche with a link to download a white paper.
Measure commitment by requiring an extensive opt-in registration with information such as mobile phone and title.
- Speaking at industry association dinner meetings with an offer for a limited number of one-hour discovery sessions.
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