How To Choose a Good Niche for Your Freelancing Business

In 2012, I heard that it was important to choose a niche.

For reasons that escape me now, Young Zach decided his new niche would be real estate agents living in Hawaii.

(I guess because he wanted to get rich and buy a beach house in Hawaii?)

Young Zach set up a niche-branded TLD website, sent out a bunch of post cards, leaned back in his chair in satisfaction, and waited for the fat stacks to roll in so that he could buy his Hawaiian beach house.

…Aaaaaaaannnnddd…. Nothing. No responses at all.

“No worries,” Young Zach said, “I’ll just do some cold calling.”

He picked up the phone and called through the whole list that he sent the post cards to.

A few people were vaguely interested, but no one ended up buying a website.

“Sheeeeiiit.”

– Deflated Young Zach

In this post, we’ll dissect why that niche didn’t work out, what a good niche looks like, and why it’s worth considering choosing a niche in the first place.

Why bother choosing a niche for your freelancing business?

I don’t think aligning yourself with a niche is the be-all, end-all — there are plenty of successful generalist agencies.

BUT it does offer some advantages worth considering.

The main benefits of doing a lot of work within a niche are…

Portfolio relevance for prospective customers

If an accountant comes to your website and sees a bunch of other accountant websites in your portfolio, they’re going to have confidence that you can do theirs well.

Bonus points if your portfolio includes work for industry leaders that they recognize and look up to.

Specificity on sales calls, etc.

Every niche has little quirks. For example, financial advisors need to have a very specific type of disclosure linked to on their site.

Knowing these quirks, and knowing the lingo of an industry, positions you as an expert in your prospect’s eyes, and helps set you apart from the generalist service providers who don’t know any of that stuff.

Predictability of work & gained efficiency

Re-inventing the wheel for every project is tedious and inefficient.

By working with a lot of clients who have similar scopes for what they need, you’ll eventually get a vibe for how projects within the niche go, and get more predictability, efficiency, and control over your time.

This also creates more opportunity for scaling into a productized agency if that’s something you’re interested in.

Clarity on marketing strategies

If you have a niche you’re targeting, it becomes much easier to find a starting point for events to attend, content to write, partnerships to seek, etc. vs. if you’re just creating “websites for anyone who needs a website.”

For example, writing guest posts for thought leaders in your niche becomes a strategy you can employ that would be much more difficult without a target customer in mind.

Why Past Zach’s niche choice sucked

In hindsight, that “Hawaii Real Estate Agents” niche really wasn’t great.

Here are some reasons why:

Many real estate agents are broke

Only the really successful ones are doing well enough to afford a website (and even then, do they necessarily care about a website?)

Most real estate agents are working with a brokerage

When an agent works with a brokerage, that brokerage often provides a little “pseudo website” for them (essentially their profile on the brokerage’s website).

And for most agents, this is enough for them and they’re happy with it.

Websites are not integral to the day-to-day life of a real estate agent.

Their job mostly involves working with people directly, and most of the web-centric work they do do involves browsing the MLS.

Referrals will often contact the agent via phone or email without really needing to evaluate their website first.

What characterizes a good niche

As I mentioned in my post, Never Forget the Potential of a “Lucky Referral”, I was lucky enough to sort of accidentally fall into a couple pretty good niches in my freelance biz.

My most lucrative niche has been financial advisors. Specifically, independent, “fee-only” advisors.

I didn’t target this niche strategically, it just sort of happened on its own and then I leaned into it.

Let’s take a look at it and reverse-engineer why it’s been great where others flopped.

The #1 most important factor when choosing a niche: Access to profitable market subsets

Before you go out and copy the niches that have been profitable for me, consider that market subsets within a niche are more important than the niche itself.

In that Lucky Referral post, I talk about the similarities between my two top-performing niches.

If you haven’t read it yet, the TLDR is that in both of my top-performing niches, I had an “in” with a referral source that had their own audience of people who…

• Had money to spend
• AND valued a website.

The problem with “niche thinking” is that it makes generalizations about an entire group of people.

But the fact is, not all real estate agents would be an unprofitable audience to serve, and not all financial advisors would be profitable.

IMO, just about every single audience or niche will have members on each stage of this spectrum:

1. DIY
2. $200 for a website on fiverr
3. $1.5k for something pretty good
4. $10k for something dope
5. $25k for something dope + the “agency experience”

One of the tricks for working with higher-paying clients is accessing a “referral tree” on the more profitable end of that spectrum. (You can find some ideas for this in my 11 Ideas for Getting Clients Without Prospecting post.)

So all that is to say, rather than getting too caught up in planning and “trying to pick the perfect niche,” I think it may be a better idea to look at your existing client-base (assuming you have one) and look for ways to optimize and “lean in more” to the niches within your client-base that seem most worth pursuing based on the criteria below and who you most enjoy working with.

Factors that characterize this profitable niche

With that big “market subset disclaimer” out of the way, let’s take a look at what makes this financial advisor niche more performant for me than the previously-attempted real estate agent niche.

1. Advisors have money to invest

Many advisors who start their own firm are quitting a day job as an advisor that was paying them well, so there’s a budget available to invest in a good site vs. simply wanting a step above DIY.

2. They value a website

My “referral circle” was a subset of financial advisors that specifically valued having an online presence, blog, etc.

(Most niches have many subsets, and I’m sure there are plenty of subsets of financial advisors who are a bit more old school and wouldn’t see the value in having a website.)

3. A website is a core part of their business

The advisors who hire me see the website as a core part of their business strategy.

(Nearly all of my advisor clients prioritize blogging, sending out an email newsletter, etc.)

4. They’re fully responsible for their online identity

Unlike real estate agents working with a brokerage who have a sort of “sub-business” of a larger business, my clients are all starting their own business from scratch, and thus fully responsible for getting a website set up, vs. using a de-facto listing page from their parent company.

5. They have niches of their own and collaborate with their “competition”

There are some industries where people are very guarded around their peers, and are careful not to give away the “secret sauce recipe.”

For example, among Amazon drop shippers, people often won’t even tell their peers what they sell on Amazon, because they know that if they do, there will soon be a surge of competitors undercutting their price.

But with these advisor clients of mine, they’re often targeting niches of their own, and thus a fellow advisor targeting a different niche isn’t even really competition for them.

This creates a more “collaborative vibe” amongst their peers, which creates more referral opportunities than a different, more “cards close to the chest” industry where people might not be talking to their peers about strategy, who built their website, etc.

6. I had past experience creating sites in the niche before it became “my niche”

Having some knowledge about an industry, whether it’s because you personally have a connection to it or because you’ve worked with clients in it, is very helpful per the earlier point about knowing the quirks, lingo, etc. of a niche.

7. I get to work directly with the business owner

Suppose you wanted to target the niche of dermatologists. In many ways it seems to qualify for a lot of these criteria. But the big challenge you might run into is gatekeepers who don’t have authority to actually make decisions, as I would think it’s unlikely the doctor would make the time to talk with you themselves. I’m not 100% on this, as I’ve never tried targeting private practice doctors, but it is a factor to consider.

Other factors of note about this niche

They’re renegades

The idea of a “fee only” advisor is somewhat new.

For the longest time, advisors would get paid a kickback for investments they recommended to clients.

…Which sorta sucks for the client because it’s a conflict of interest and makes it hard to know if your advisor is recommending something because they actually think it’s good, or if it’s just because it pays them the best.

“Fee only” advisors don’t accept any kickbacks and are only paid directly by clients.

How all this is maybe relevant to us…

The desire to change the status quo and do things differently probably lends itself to things like blogging, because they need to educate their prospects on why their new way of doing things is better. (And if they want to blog, send out a newsletter, etc., they obviously need a website.)

One client is worth a lot of money to them

Suppose an advisor charges an annual fee of 0.5% of assets managed and gets a client with a $1mm portfolio. That client is worth $5k/year to them. So a super dope $10k website only needs to get them a couple clients over its entire lifetime to pay itself off.

They believe in the value of hiring an expert vs DIYing

After all, that’s what their whole job relies on: their clients understanding that their money would be better managed by a professional than by them just going out and buying 1,000 shares of GME 🚀 and hoping for the best.

👟 Action Steps

Hopefully you’ve got some ideas a-brewin’ at this point. Follow the steps below to put them into action.

1. Make a list of potential niches to experiment with

To create a list of potential niches to serve, I recommend you follow the steps below.

1. Go through all of your past clients and write out what niche they belong to. (Or add in a new line to the Notion template)
2. Evaluate each of those niches based on the criteria above in the “Factors that characterize a profitable niche” section of this post.
3. Tally up the points to see your winners. (The Notion template will do this automatically.)

No existing client roster? All your clients suck and are low-paying? Otherwise struggling for ideas?

If you’re newer and/or really struggling to find good clients, it’s not super important to comb through your client roster, since there probably aren’t many good leads in there.

Instead, we’ll rely on you simply brainstorming some ideas and evaluating them based on the criteria in this post.

If you need a boost to your idea generation, I’d recommend combining my criteria above with the process outlined by Arvid Kahl in this blog post, where he outlines his process for selecting an audience for an audience-first business. (He also outlines the process in his The Embedded Entrepreneur book.)

While his process is more geared toward SaaS and product businesses, I think it would still be helpful for you here in identifying potential niches to serve as a freelancer.

2. Pick a niche, and lean into it on an experimental basis

Once you have an idea of who you might want to experimentally target, it’s time to start pursuing clients in that niche.

Be sure to check out my 11 Ideas for Getting Clients Without Prospecting post for ideas here.

If you don’t know much about the needs of the customer in this new niche, a good first step is to do some research as if you were a member of this niche.

So for example, if you’re a web designer and you decided to target the niche of “coffee shops” – which, btw, probably wouldn’t be a very good niche based on the criteria we outlined in here – you might do some research along the lines of…

• “Things I should include on my coffee shop website”
• “Mistakes people make with coffee shop websites”
• “Best coffee shop website designs”
• etc.

This will help you start to familiarize yourself with the norms of the niche and their specific website needs.

Once you’re as close to expert-level as research alone can get you, you can start implementing some of those low-prospecting client acquisition ideas, or do some cold outreach, cold calling, upwork applying, etc. to start getting clients.

In my opinion, if you don’t already have at least one example in your portfolio of sites belonging to this new niche, it will be difficult for you to really nail things like thought leadership or related agency partnership, because those things pair best with experience and a track record.

If this is you, you might be better off pursuing lower-quality, less “creative client acquisition style” clients at first to build your portfolio. Stuff like Upwork, cold email, cold calling, cheap/pro bono work, etc.

I recommend working with at least 5-10 clients in this new niche before drawing any conclusions about the validity of the niche as a whole, while always being mindful of the market subsets concept we explored earlier to keep yourself from drawing conclusions about this niche that are actually problems of the specific market subset you’ve been working with.

(This is especially important if you’re getting clients via direct outreach or Upwork, as those clients can often be lower quality than referral clients.)

Is it worth setting up a new Top Level Domain (TLD) for this niche?

I’d say it’s up to you. I think it could definitely be helpful to buy a branded TLD, but I don’t think it’s necessary to build a whole new niche-facing site to start with.

If I were to implement this with my own freelancing business, what I’d probably do would be…

1. Create a series of helpful instructional blog posts for this niche that live in their own category on my main website (i.e. the “financial advisor websites” category or something like that)
2. Create a really helpful opt-in item for these guys that ties into a nice email sequence
3. Customize that niche category page on my site to have some more info and get people onto the opt in (so it’s essentially just an opt in page with a category post list at the bottom)
4. Set up opt-ins with Thrive Leads that display only for posts this “financial advisor websites” category that allow people to join this niche mailing list
5. Purchase a unique vanity url (i.e. KickassXYZNicheWebsites.com) and redirect it to this special category page for now. (This gives the option to easily convert to a stand-alone website later, if the niche proves fruitful and we want to double down.)
6. Run ads to posts in that category and/or the category page vanity url
7. In the case of thought leadership guest posts I write, have my author bio link go to the vanity url, which will redirect to the category opt-in page for now.

Should I abandon my existing non-niche client work now that I’ve picked this new niche?

No! (At least, not yet)

Regardless of whether you’re a new or seasoned freelancer, I don’t advocate for drawing a line in the sand and proclaiming that “Henceforth, I only do XYZ types of sites for ABC types of people.”

Instead, I encourage gradual course corrections and a broad vision for what you’re moving towards, with consistent validation along the way.

That’s why I call this whole thing a “niche experiment.”

If you have clients already coming in from all over the place, no need to stop working with them.

For now, if you’re interested in the whole niche thing, I say just pick one, dabble a bit, and see how it goes. Again, just make sure you work with at least 5-10 clients to get a proper feel for it.

If, after experimenting for a while, it turns out that you’ve found yourself tapped into a rich vein of clients that pay well and are great to work with, it’s only then that it’s worth considering turning everything else away.

(And even then, I’m not sure it makes sense to specialize with a laser-target unless you’re planning to become a productized service agency.)

Go forth! Experiment!

What are your thoughts on niching-down? Interesting? Folly? Think I missed something? Let me know in the comments or reach out directly!

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