In this post, you’ll learn a beginner-friendly process for finding your niche as a freelancer.
In the end, you’ll have chosen the ideal niche that:
- Maximizes the amount of money you can make, in both the short-term and long-term.
- Is a niche where you have the confidence to begin marketing yourself today.
It’s a process that works no matter what freelance service you’re offering — whether that’s freelance writing, graphic design, social media management or something else.
Why You Want to Niche Down as a Freelancer
There are three primary reasons why it makes sense to niche down:
- Utilize existing skills
When famed bank robber Willie Sutton was questioned about why he chose to rob banks, his now-famous response was:
“Because that’s where the money is.”
This same line of thinking can be applied to choosing a niche.
You want to go where the money is.
It’s a fact that certain niches pay more than others.
As an example, a financial writer who can write authoritatively about credit cards can earn more than a writer who covers budgeting.
Because credit cards are where the money is in personal finance.
A good niche can therefore be the difference between:
- Working near minimum wage and being highly-paid.
- Having to compete with dozens of others for every job and having a waiting list of clients.
The reason you want to choose a freelancing niche is to maximize the amount of money you earn.
But as we know, there’s more to life than money. Just like you shouldn’t choose a college major solely based on its earning potential, you also shouldn’t choose a freelancing niche solely based on its potential returns.
It’s important to enjoy the work you’re performing.
Yes, this is obvious advice. However, we tend to think about fulfillment in the wrong way.
The standard advice is to follow your passion. But research shows that doesn’t necessarily lead to a fulfilling career.
What we’ve learned is that fulfillment from a skill comes after putting in the hard hours necessary to become good at it.
So the best question to ask when choosing your niche becomes:
What do you want to become good at, in which others find value in?
As best-selling author Cal Newport says in his book So Good They Can’t Ignore You:
“If you want to love what you do, abandon the passion mindset (“what can the world offer me?”) and instead adopt the craftsman mindset (“what can I offer the world?”).”— Cal Newport
Utilizes Existing Skills
It’s important not to confuse being a beginner freelancer with having a beginner’s skill set.
You have a rare combination of skills and knowledge, based on both your unique work and life experience.
And this is just as true for a 20-year-old college student as it is for a stay-at-home parent who has been out of the workforce for a decade.
Your goal is to learn how to package and market that unique background.
Good questions to ask here are:
- What industries have you previously worked in?
- What skills do you put on your resume?
- What are your hobbies?
- What subjects do you like to read about in your free time?
One of the first freelance services I offered was copywriting. I lacked experience in the field, but I had experience working in financial services. So I marketed myself as someone who specializes in copywriting for financial services.
Here’s another example: at the time, I was reading a lot of health and fitness books. I wasn’t an expert and had never worked in the health industry, but the fact that I had read a lot of the most recent best-sellers lead to landing a few copywriting clients in the health and fitness space.
4 Tips for Choosing a Profitable Freelance Niche
Anyone can head over to Upwork, the world’s largest freelance marketplace, and scan the list of available jobs.
There’s also no shortage of “best niches” blog posts that you can quickly scan through to get an idea of the different options.
What’s hard is making the right choice among these potential niches.
Here are four tips that will improve your ability to choose a great freelancing niche.
Tip #1: Aim to Combine Two Above-Average Skills
Let’s say you’re a freelance writer.
There are literally hundreds of different types of freelance writing jobs. And as you’ll find, some freelance writing niches are a lot harder to compete in than others.
Your goal is to find a niche where there’s good demand and not a lot of supply. Generally, the more a niche requires experience and expertise, the lower the supply of freelancers in that niche.
One of the most helpful pieces of career advice I’ve ever read came from Scott Adams, the creator of Dilbert.
In an article titled “Career Advice,” Adams explains:
…if you want something extraordinary, you have two paths:— Scott Adams
1. Become the best at one specific thing.
2. Become very good (top 25%) at two or more things.
The first strategy is difficult to the point of near impossibility. Few people will ever play in the NBA or make a platinum album. I don’t recommend anyone even try.
The second strategy is fairly easy. Everyone has at least a few areas in which they could be in the top 25% with some effort.
So a good question to always be asking yourself is this:
What are you among the top 25% in right now?
If you can’t think of anything, then ask:
What could you be among the top 25% in over time?
Having a rare combination of skills is rewarded highly in almost every marketplace. You’ll find yourself competing with a lot fewer people, and you’ll be able to command higher rates.
After I started freelancing as a copywriter, I learned how to design landing pages. I wasn’t a great designer, but I understood landing page conversion very well.
The combination of being able to design and write copy is pretty rare, so it was here where my rate exceeded $100 per hour for the first time.
Tip #2: Pick an Idea You Can Test Within 30 Days
Think of niche selection as running a short-term experiment.
The goal of your experiment is to get your first client in fewer than 30 days.
Your job is to see through the experiment: to put in place a plan of action that allows you to determine if the niche is a good fit.
After 30 days — and knowing that you did everything you could to test your hypothesis — you can determine if the niche will work for you.
And if it doesn’t work, don’t sweat it! All you did was try something new. It’s OK that it didn’t work.
In entrepreneurship, you’ll have plenty of tests that don’t work out as expected. The goal is to minimize the time and financial downside of each test, and to keep testing until you find something that does work.
When you do, you’ll want to double down on that strategy.
As an example, let’s say you’re looking to test whether becoming a graphic designer for food bloggers is a good niche.
An experiment you could run would be:
I’ll set up a professional-looking profile with relevant work samples on Upwork. Then I’ll apply to one job every day.
Too often, I see people hesitating to start something new because they don’t have a perfect idea.
On the opposite end of the spectrum, but just as harmful, is when I see someone commit six months to a project before they know whether it’s working.
It’s for these reasons that you’ll want to pick an idea that allows you to test whether it works inside of 30 days.
Trying something new for 30 days and having it fail isn’t the end of the world.
Tip #3: Maximize the Expected Value
Let’s say you’re looking to get started as a freelance writer.
A few niches you had in mind were:
- Freelance writing for personal finance websites
- Freelancing writing for gardening websites
- Freelancing writing for cooking websites
How do you decide which is best?
I’ve always found a great way to make decisions is by going with the choice that maximizes expected value.
A good example to illustrate how to use this decision framework is buying a house.
You’ll first want to determine the most important factors or outcomes that you’re looking for in a home, such as location, schools, square footage and kitchen.
Then, you’ll rank those factors on a scale of 1-10.
Finally, you’ll add them up to get their expected value.
|Location||Schools||Square Footage||Kitchen||Expected Value|
The option with the highest expected value helps reveal what your best choice is.
Now, back to our freelance writing example.
The first thing we’ll have to do is decide what’s actually important for us.
Let’s say we want to focus on:
- Time to profitability
- Current skills
- Long-term potential
We’ll then rank these factors on a scale of 1-10, summing up their totals.
|Time to Profitability||Current Skills||Time Ongoing||Fulfillment||Potential||Expected Value|
The key is to know what’s most important to you, and then to accurately rank the factors as best as possible.
There’s also no rule that says the factors have to be equal. For example, if you place a higher value on “fulfillment” over “time to profitability,” you may want to have fulfillment be on a scale of 1-20 rather than 1-10.
Tip #4: Ride a Wave vs. Swim Upstream
I started working at my family’s independent insurance agency right out of college. And I got off to a pretty decent start in sales there.
That was back in 2007, and it wasn’t yet common to buy life insurance online. So the overall market share held by local independent agents was fairly steady.
But year-by-year, more and more large companies were entering the space with an online-only model. And each year, the total market share of local independent agents fell by a percent or two.
Years went by quick, and all of a sudden, those 1% and 2% decreases in market share were adding up.
More and more consumers stopped turning to local agents for their insurance needs, which made it increasingly difficult to grow.
Trying to grow a business or freelance in an industry that’s declining is one of the harder things to do. I’d avoid it at much as possible.
Think of it like swimming upstream: you’ll have to expend a lot more energy to get to where you want to go.
As a beginner, entering a niche or industry is a choice you get to make.
In other words, you get to choose whether to swim upstream or downstream.
And swimming downstream is one of the smartest moves to make when you’re considering entering an industry.
Actually, a great business model is to align yourself with a fast-growing trend or company.
After having to close his remodeling company in the wake of the 2008 recession, a friend of mine got into online marketing. Soon, he realized that marketing automation was going to be a big trend, so he went out and took the certification program from InfusionSoft, a fast-growing marketing automation software solution that’s now called Keap.
A few years have gone by and he has a thriving marketing automation agency.
Here’s another example: when I was freelancing, my career really took off when I branded myself as an expert in Unbounce landing page design. I was an early user of the platform and got familiar with the software while running some marketing campaigns for other small businesses.
At the time, the need for quality designers outpaced supply. It was the ideal situation where I had a surplus of leads to my freelance business and could be picky about who I worked with and raise rates (which topped $180 an hour).
Keep a close eye on fast-growing industries (especially software companies). Often, the best strategy is hitching yourself to their rocket ship.
Here’s where utilizing a free service like Google Trends can really pay off.
Entering in your niche of choice can bring up some very interesting information:
Final Thoughts on Freelance Niche Selection
Finding the right niche is one of the most important things you’ll do as a freelancer. That said, it’s not easy — especially for beginners.
The problem is that without a lot of client experience, it’s hard to know what the market wants, what trends are emerging, or even what you enjoy doing.
It’s for this reason that it’s important to not spend too much time upfront.
Instead, pick something and test it!
If it doesn’t work, change course with the valuable feedback you armed yourself with. After all, asking other people for money is the only real way you’re going to get feedback on your idea.
This article is part of our in-depth series on How to Get Started Freelancing.
In the series, the goal is to help you land your first high-paying freelance client.
I invite you to check out the next article, How To Create A Freelance Portfolio From Scratch.
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