First of all, why is it important to niche down as a service-based business owner?
Well, the clearer you can be about what problem you solve and who you solve it for, the easier it will be for those people to understand you and self-select when they read your marketing copy.
If they feel like you get them and you can provide an answer to their struggles, they’ll immediately trust you more. And it’s that “know, like, and trust factor”, coined by sales expert Bob Burg in his book Endless Referrals, that actually gets you clients.
To give you an example, I’m a certified life coach. When I started my business, I was a bit all over the place in terms of my niche, because I didn’t know who I wanted to serve. I marketed myself to women looking to transform their lives in the areas of career, relationships, and joy, which you can imagine didn’t really attract anyone to me.
Even though I could help in any of these areas because I was trained to do so, I wasn’t specific enough about one particular problem I could solve in my business. And while my friends and family liked my posts, I didn’t really get any interest from actual prospects.
When I finally decided to work with entrepreneurs, it made my marketing efforts so much easier because I could write to just one group of people with one unique problem.
Also, the more specific you can be in your messaging, the more you can weed out people who are not the right fit, from the very beginning. They actually do it themselves when they read your marketing materials. So you waste less time talking to people who you don’t want to serve.
Finally, because you’re niching down, you’ll get to expert status much faster — since you’ll be solving the same problem over and over again in your business. You’ll get better at solving that problem for people, refine your processes, and start attracting referrals from past clients in no time.
So, how do you pick a niche when you’re just starting?
Before I begin, I want to address a big elephant in the room: Picking a niche without having enough experience working with people is a bit of a chicken and egg scenario. You don’t know enough about the problems you could solve, or who you want to solve them for because you just haven’t been doing it long enough.
“Elephant in the Room”. Illustration by Agatha Brewer
So, it can be tough to find real clarity if you’ve only worked with a few clients, but there are a few questions you can ask yourself to get started:
1. Who do you love working with?
If you’ve worked with a few clients already, who do you most resonate with?
Or to put it simply, who do you vibe with the most?
If you’re not really sure, think about who brings up your energy level vs. draining you when you work with them (you can even do this with people in your life outside of your business).
Or maybe it’s around what they do — is there a specific group of people who just inspire you?
For me, if it wasn’t entrepreneurs, it would be chefs and anyone in the culinary industry. I don’t know why — I just find that industry exciting and I love food. I think maybe in a past life I was a chef because cooking just comes so naturally to me. I’m the kind of person who reads a recipe just for inspiration, doesn’t use a measuring cup, and just wings it about 90% of the time!
Keep this in mind when picking your ideal target audience. And if you haven’t yet worked with anyone, think about who you would like to work with to get started. Is there a group of people you want to serve, or help in some way?
If you’re really new, my advice is this: Just go out and work with all types of people for a few months. Take notes on your experiences with them, and go from there.
2. What problem does your business solve?
You want to hone in on a very specific problem that you help people solve. If you can solve an important enough issue, you can create a successful niche.
You want to help people get from one point to another, utilizing whatever it is that you’re offering as their method of getting there.
So, their starting point could be: feeling overwhelmed in starting a business, struggling to find clarity in their overall strategy. Their desired result is feeling clear and confident, and finally able to market themselves easily. The overall result? Clarity in marketing, which leads to more sales.
So, define people’s starting point, and the final result you provide. Make sure your final result is a tangible thing or it’s going to be really hard to sell it because it’s just a concept.
And if your solution doesn’t actually create the results you promise, then it’s time to rethink either your offering or your niche. This is a good test to see if your niche is right for you.
And a pro tip: A lot of the time, we can easily diagnose the issues people are coming to us with, but they don’t necessarily know that they actually have that specific problem. They think they’re coming to us for a different reason.
For example, new business owners come to me thinking they’re looking for help with their strategy; but in reality, it’s their mindset that is really blocking them from reaching their goals.
So, I need to be aware of that in my marketing. People will search Google for marketing tips, but not necessarily mindset strategies. Either way, I can still help them, but I don’t have to lead with my mindset work in my marketing, because they don’t know they’re coming to me with that problem.
And to look at it from another perspective, you can ask yourself: What opportunity does my business (or offering) create for people?
Let’s say you’re a graphic designer who creates websites. Well, you’re creating several opportunities: You’re helping small business owners save time, headaches, and overwhelm so they can focus on what really matters in their business. You’re also helping them generate new business because they have a well-designed website and can attract higher-quality prospects.
And that leads me to the next question.
3. Who were you before?
Many times, those of us in service-based businesses tend to work with an earlier version of ourselves, someone who was struggling with a certain problem and found a solution. So, we’re instantly the expert since we’ve been through the transformation ourselves and have come out of it, eager to help others do the same.
For example, I’m a coach who works with new business owners that are having trouble launching their business. Not only do I have my coach training to fall back on, but I also have the experience of doing it myself. I’ve gone through the ups and downs, and know how to guide entrepreneurs to not make the same mistakes that I did early on.
See if this applies in your business. Can you work with an earlier version of you, or perhaps solve a problem that you once had? And it’s OK if you’re just two steps ahead in terms of that transformation you provide. That’s enough.
4. Who do you not want to work with?
And finally, if you really want to get clear, ask yourself who you don’t want to work with, or possibly, what problem do you not want to solve for people?
The answer to this question can uncover a lot of good information. So, take your time and really think it through.
For me, I know for a fact that I don’t want to write another marketing plan. I have spent over 15 years of my life in corporate marketing already, so I don’t want to spend any more time than I need to sitting in Excel. But, I can absolutely guide my clients in creating their own marketing or business plan, since I have so much experience in that area already, and have the coaching skills to back that up. So that helps me narrow my niche.
Or maybe there’s a specific group of people that you’re not really interested in supporting or aligning with. You’ll know… it’s most likely a gut feeling. Just trust that whatever comes up is your intuition talking.
How do you find clarity once you’ve identified who you don’t want to work with?
You’ll just want to take the opposite of what you came up with. To give you an example, I don’t want to work with large organizations, so that gives me clarity that I’d prefer to work with solopreneurs and smaller businesses.
Compile your answers for all of these questions and see where the overlaps are. Ideally, you’ll be serving a group of people who have the same problem or want the same opportunity in their lives.
And if you were able to overcome the same problem before, you’ll be even more of an expert in that area. Of course, this one isn’t mandatory, but it helps you to connect with that group if you’ve had the same experience as them.
And a final tip:
As a new business owner, it’s important to also trust that you’ll get more clarity over time. Going back-and-forth on a niche without testing it in the real world isn’t going to get you any clearer because you’ll just stay stuck in your head, overanalyzing everything.
So, put a stake in the ground, test your niche for a few months, and then make any adjustments you need. And don’t fall for the myth that narrowing your niche will attract fewer people — the more you narrow down, the more magnetic your marketing will be.