Picking the Right Niche is One of the Most Important Things You Can do When Starting Your Consulting Business.
Consulting in a high-value, high-growth niche makes life easier and more rewarding!
When you work in the right niche, clients immediately recognize your value, growth is high, and opportunities are everywhere. Building a thriving consulting business seems to come easy.
This stage shows you the steps for choosing and validating a consulting niche where you can deliver a high-value solution, have plenty of clients and be well rewarded.
Consultants and solo professionals are known for their grit and tenacity. They break through obstacles to reach their goals. However, this tenacity can be a problem if you are pressing forward to the wrong goal. Picking the right niche is critical, but it can be just as important not to go too narrow too soon.
The Riches Really are in the Niches!
(Did I Say That Before? Must Be Important!)
You can choose your 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 the seven step method described in this stage. 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!
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.
You Will Never Find an Experienced Commander or
a Book on Strategy that 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 do great work, but a specialist in heart surgery will have a greater success rate at this job: referrals coming to them, providing a higher value solution, receiving greater recognition, and having higher income.
Until you have a lot of experience and contacts in a narrow niche, you may not want to focus too narrow. It’s best to use the strategies and systems in Stage 1 to discover a “wide niche” that needs a range of skills. 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 try a couple of different lures (validating the niche) until you finally find a lure (the offer) that matches what the fish (your client) want. Now you’ve found the niche! The stream, the lure, the time, and your technique all come together for a great morning of catch-and-release fishing.
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.
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. How do you know where to look?
Another problem is that you want to find an area that has adjacent niches where you can expand. That gives you the opportunity to expand your scope of work inside a client.
A good way to map your niche(s) opportunities is to use a grid-like the one below. Mapping industries, skills, and needs can help you identify your best opportunities.
In this grid example, you use research, your passion, and your purpose to help you pick the industry segments of Healthcare and Sustainable Foods. You have multiple skills in strategic performance improvement.
Your skills are facilitating executive strategy, defining objectives and key results (OKRs) and working with IT to create measurement dashboards. The numbers in the table are your guess at how much value you could contribute. This uses a rating system where 9 is highest, 3 is mid, and 1 is lowest.
With this table, you can see how entering a Regional Hospital at the executive level and helping define their strategy sets you up for additional work. You could go on to work with departments defining OKRs and then work with IT defining metrics. By entering at a high seniority level in this niche, you can contribute at multiple levels and create a long term, highly profitable client.
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 spending a lot of time, energy, and money.
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.
Use the US 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.
If you aren’t already familiar with a niche and its common problems, there are many ways to learn what they are,
Before you even open a discussion with a lead or prospect in a niche, you need to learn about their problems and the language they use to talk about them.
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 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.
Guess which manager or role would hire you in your ideal client, for example, how would you identify them by seniority level, job title, or other qualifier. Can you find a lot of 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.
Do a quick Google search to see if you might have competitors and what they offer. Use a search like
biotech HR consultants
Make sure you add “consultants” at the end of the niche.
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.
NEVER spend time and money to develop a consulting business until you first 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.
Instead, use Minimum Viable Offers (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 to show that they put value on it.
Using the Minimum Viable Offers described in more detail in the course lets you test what clients will pay for without having to invest a lot of time and money.
Don't move forward until you have
validated your niche(s).
A few low-cost ways you can test a niche offering before committing are to make an offer that requires a time or (low-cost) commitment. For these types of offerings you don't need to make a major commitment in development to test the interest in your offering,
Don't move forward until you have validated your niche(s).