How To Choose A Niche For Your Agency

Choosing a niche is one of the first things people get stuck on, and one of the things they overthink the most.

The short version: pick the audience that has already named its problem and is willing to pay to solve it. Then commit. Which niche you choose matters a lot less than actually choosing one.

Passion or money?

A consultant I spoke to had two very different types of prospect. One was a market they loved, full of small businesses on thin margins. The other was early-stage B2B tech, which they were less excited about.

My advice was to put the capitalist hat on first.

Ask whether your service is a painkiller or a vitamin for that audience. In the market they loved, it was a vitamin. Nice to have, first thing to be cut. For the B2B companies it was a painkiller, and they had both the budget and the urgency.

Cover your bills with the higher-value work. Then use the runway that gives you to help the people you love working with on the side.

Should you narrow down or stay broad?

Narrow. Especially early on.

A tighter niche lets you refine your messaging, and it lets you be much more aggressive with your outreach to that one audience. A broad offer puts you up against everyone, including companies with far more money than you.

Going vertical is the cheaper way to prove your model. Win a few clients in one niche, grow your deal size, then decide whether to expand.

A couple of things to think about when you’re choosing:

• Defensibility. Less crowded, less tech-savvy markets have fewer people pitching them every day.
• Messaging. The further you get from the usual tech buyer, the simpler and more outcome-focused your message needs to be.

“But I’ve never worked in that industry”

This worry stops a lot of good people from picking a niche that would suit them.

You bring about 80% of the knowledge already: the method, the process, the tools. The remaining 20% is that industry’s market, language and buyers, and you can learn that quickly.

Companies at the same stage have the same core problems whatever industry they’re in. The nuance is who they sell to, and you pick that up as you go.

It also compounds. Every client teaches you something you use with the next one. Three clients in, you’re no longer the outsider.

How to test a niche before you commit

You don’t have to guess. If you’re torn between two or three niches:

1. Create a simple landing page for each one.
2. Use a separate sending domain for each.
3. Run the same outreach to each audience.
4. See which one converts.

Then go all in on the winner.

What to do next

Write down the two or three audiences you’re considering. For each, answer three questions:

• Have they already named this problem themselves?
• Do they have the budget to solve it?
• Is it urgent, or can it wait until next year?

The one with three yeses is your niche. Once you’ve picked it, the next job is building a list of them and landing your first few clients.

Frequently asked questions

How do I choose a niche for my agency?

Choose the audience that has already labelled its problem and has the budget and urgency to solve it. If your service is a nice-to-have for one market and a must-have for another, go with the must-have.

Should I niche down or stay broad?

Niche down, especially early on. A tighter niche lets you sharpen your messaging and be far more direct in your outreach. Which niche you pick matters less than committing to it.

Can I sell to an industry I've never worked in?

Yes. Your method, process and tools are about 80% of the value and they transfer. The other 20% is the industry's market and buyers, which you can learn quickly, and every client teaches you more.

How can I test a niche before committing?

Set up a separate landing page and sending domain for each niche you're considering, run the same outreach to each and see which one converts before you commit.