You need You need to specialize as an IT consultant to specialize as an IT consultant because specialization = less competition because specialization = less competition + higher rates. More specifically, by being in a niche, you'll be able to: + higher rates. More specifically, by being in a niche, you'll be able to:
have less competition, have less competition,
charge a higher bill rate for your more specialized knowledge, charge a higher bill rate for your more specialized knowledge,
stand out from competitors more easily, and stand out from competitors more easily, and
be found more easily by potential clients. be found more easily by potential clients.
How to find your niche How to find your niche
One of the most common causes of struggling to make money as a consultant is One of the most common causes of struggling to make money as a consultant is failing to target a solid niche. failing to target a solid niche. Newbie consultants Newbie consultants often focus on their product or often focus on their product or service, when they should think about their market first. For instance, you might think, service, when they should think about their market first. For instance, you might think, "My PHP skills are pretty niche-y. I'll just hang out a PHP shingle, and the clients will "My PHP skills are pretty niche-y. I'll just hang out a PHP shingle, and the clients will start rolling in!" Tech skills (and products) don't make a niche; a start rolling in!" Tech skills (and products) don't make a niche; a niche is a finely niche is a finely focused market. focused market.
A good niche will have: A good niche will have:
profitable customers/prospects, which typically means that customers/profitable customers/prospects, which typically means that customers/prospects charge a high bill rate and/or have a high profit margin, prospects charge a high bill rate and/or have a high profit margin,
a clear demand for specialized skills and knowledge, a clear demand for specialized skills and knowledge,
low competition, and low competition, and
barriers to entry that you can realistically overcome. barriers to entry that you can realistically overcome.
This is pretty general because these criteria can apply to a variety of skills, experience, This is pretty general because these criteria can apply to a variety of skills, experience, and expertise. To get from the general to the specific, follow these steps and start and expertise. To get from the general to the specific, follow these steps and start brainstorming consulting niches. brainstorming consulting niches.
1. List your skills: List your skills: I know I just told you to focus on a market, but you'll be using I know I just told you to focus on a market, but you'll be using your skills to fill a market need, so you'll need to inventory your skills. This your skills to fill a market need, so you'll need to inventory your skills. This should be easy -- snag your skills from your resume. Your skills might include should be easy -- snag your skills from your resume. Your skills might include SQL, PHP, Java, project management, product development, writing, yeti SQL, PHP, Java, project management, product development, writing, yeti hunting, and so forth. hunting, and so forth.
2. List your industry-specific experience: List your industry-specific experience: Maybe you've worked for companies Maybe you've worked for companies involved with health insurance, commercial real estate, financial services, involved with health insurance, commercial real estate, financial services, NASCAR racing, etc. NASCAR racing, etc.
3. List your product-specific experience: List your product-specific experience: Although you can probably get paid to Although you can probably get paid to teach senior citizens how to use Word to write an angry letter to the editor, that's teach senior citizens how to use Word to write an angry letter to the editor, that's not where the big money is; instead, list the software, hardware, and systems not where the big money is; instead, list the software, hardware, and systems that are more niche and have a more limited customer base. Think of things like that are more niche and have a more limited customer base. Think of things like Salesforce Salesforce , CAD applications, and flight simulator systems. , CAD applications, and flight simulator systems.
4. Combine your skills, experience, and expertise with specific markets: Combine your skills, experience, and expertise with specific markets: Here's Here's where you'll brainstorm mashups of your skills and experience with potential where you'll brainstorm mashups of your skills and experience with potential markets. For example, local upscale restaurants without an online marketing markets. For example, local upscale restaurants without an online marketing presence, business intelligence reporting for commercial real estate firms, and presence, business intelligence reporting for commercial real estate firms, and so on. so on.
How to ensure it's a profitable niche How to ensure it's a profitable niche
Before you run out and buy the necessary software and hardware (if appropriate) for Before you run out and buy the necessary software and hardware (if appropriate) for your niche, you need to do your homework to determine whether your niche is big your niche, you need to do your homework to determine whether your niche is big enough, profitable enough, and not too competitive. Here are three of the best ways to enough, profitable enough, and not too competitive. Here are three of the best ways to evaluate a niche. evaluate a niche.
Google Keyword Tool: Google Keyword Tool: You can use You can use Google's free Keyword Tool Google's free Keyword Tool to research to research search keywords, which will help you evaluate the size, competition, and search keywords, which will help you evaluate the size, competition, and profitability of niches by researching search keywords. For each keyword, you profitability of niches by researching search keywords. For each keyword, you get data on the number of searches, the degree of competition (i.e., how many get data on the number of searches, the degree of competition (i.e., how many other sites are trying to rank for the keyword), and the average Google AdWords other sites are trying to rank for the keyword), and the average Google AdWords cost per click for each keyword. Comparing the cost per click gives you a way to cost per click for each keyword. Comparing the cost per click gives you a way to measure market profitability, since advertisers will likely be able to spend more measure market profitability, since advertisers will likely be able to spend more for advertising in profitable markets. for advertising in profitable markets.
Paid tools: Paid tools: Google's Keyword Tool is great, but it can be a bit cumbersome and Google's Keyword Tool is great, but it can be a bit cumbersome and time-consuming to use. There are paid tools such as time-consuming to use. There are paid tools such as Market Samurai Market Samurai that that automate much of the research, allowing you to research niches in probably a automate much of the research, allowing you to research niches in probably a tenth of the time it'd take you to do the same research manually. What's even tenth of the time it'd take you to do the same research manually. What's even cooler is that the paid tools let you dig down to see how your competitors stack cooler is that the paid tools let you dig down to see how your competitors stack up, and where their backlinks come from so you can re-engineer those same up, and where their backlinks come from so you can re-engineer those same backlinks for your own site in an attempt to outrank your competition in search backlinks for your own site in an attempt to outrank your competition in search results. results.
Customer interviews: Customer interviews: Customer interviews and customer development is the flip Customer interviews and customer development is the flip side of product development, and this concept comes from the lean startup side of product development, and this concept comes from the lean startup framework for business development. The basic idea is that instead of starting framework for business development. The basic idea is that instead of starting with a product or service, you target a market and research the market to with a product or service, you target a market and research the market to identify its most pressing problems, so you can then create and sell solutions identify its most pressing problems, so you can then create and sell solutions for those issues. Customer interviews are one way to go about this approach; for those issues. Customer interviews are one way to go about this approach; you talk to potential customers to find out about their current problems, how you talk to potential customers to find out about their current problems, how they're addressing those problems, and how they'd like to improve their they're addressing those problems, and how they'd like to improve their situation. If you already know your market fairly well, you might have some situation. If you already know your market fairly well, you might have some ideas for solving your potential customers' biggest problems; in that case, you ideas for solving your potential customers' biggest problems; in that case, you can ask potential customers about those ideas (don't try to sell just yet) to see can ask potential customers about those ideas (don't try to sell just yet) to see whether you can validate the need for your product or service. There's a lot more whether you can validate the need for your product or service. There's a lot more to doing customer interviews well so you can get actionable information, but to doing customer interviews well so you can get actionable information, but that's a conversation for another time. For now, just know that talking to that's a conversation for another time. For now, just know that talking to prospective customers is one of the best ways to research a niche. prospective customers is one of the best ways to research a niche.
Summary Summary
Unless you can identify and target a profitable niche market and solve that market's Unless you can identify and target a profitable niche market and solve that market's problems, you're leaving your IT consulting business to chance and increasing your problems, you're leaving your IT consulting business to chance and increasing your odds of failure. If you're in a profitable niche, you'll be able to work less and earn more. odds of failure. If you're in a profitable niche, you'll be able to work less and earn more.
Related posts in IT Consultant Related posts in IT Consultant
The mistake that nearly killed my consulting career (and how to star in a Vegas The mistake that nearly killed my consulting career (and how to star in a Vegas show) show)
Don't let your niche become an empty buzzword Don't let your niche become an empty buzzword
IT consultants: Don't let your niche define you IT consultants: Don't let your niche define you
!]
have less competition, have less competition,
charge a higher bill rate for your more specialized knowledge, charge a higher bill rate for your more specialized knowledge,
stand out from competitors more easily, and stand out from competitors more easily, and
be found more easily by potential clients. be found more easily by potential clients.
How to find your niche How to find your niche
One of the most common causes of struggling to make money as a consultant is One of the most common causes of struggling to make money as a consultant is failing to target a solid niche. failing to target a solid niche. Newbie consultants Newbie consultants often focus on their product or often focus on their product or service, when they should think about their market first. For instance, you might think, service, when they should think about their market first. For instance, you might think, "My PHP skills are pretty niche-y. I'll just hang out a PHP shingle, and the clients will "My PHP skills are pretty niche-y. I'll just hang out a PHP shingle, and the clients will start rolling in!" Tech skills (and products) don't make a niche; a start rolling in!" Tech skills (and products) don't make a niche; a niche is a finely niche is a finely focused market. focused market.
A good niche will have: A good niche will have:
profitable customers/prospects, which typically means that customers/profitable customers/prospects, which typically means that customers/prospects charge a high bill rate and/or have a high profit margin, prospects charge a high bill rate and/or have a high profit margin,
a clear demand for specialized skills and knowledge, a clear demand for specialized skills and knowledge,
low competition, and low competition, and
barriers to entry that you can realistically overcome. barriers to entry that you can realistically overcome.
This is pretty general because these criteria can apply to a variety of skills, experience, This is pretty general because these criteria can apply to a variety of skills, experience, and expertise. To get from the general to the specific, follow these steps and start and expertise. To get from the general to the specific, follow these steps and start brainstorming consulting niches. brainstorming consulting niches.
1. List your skills: List your skills: I know I just told you to focus on a market, but you'll be using I know I just told you to focus on a market, but you'll be using your skills to fill a market need, so you'll need to inventory your skills. This your skills to fill a market need, so you'll need to inventory your skills. This should be easy -- snag your skills from your resume. Your skills might include should be easy -- snag your skills from your resume. Your skills might include SQL, PHP, Java, project management, product development, writing, yeti SQL, PHP, Java, project management, product development, writing, yeti hunting, and so forth. hunting, and so forth.
2. List your industry-specific experience: List your industry-specific experience: Maybe you've worked for companies Maybe you've worked for companies involved with health insurance, commercial real estate, financial services, involved with health insurance, commercial real estate, financial services, NASCAR racing, etc. NASCAR racing, etc.
3. List your product-specific experience: List your product-specific experience: Although you can probably get paid to Although you can probably get paid to teach senior citizens how to use Word to write an angry letter to the editor, that's teach senior citizens how to use Word to write an angry letter to the editor, that's not where the big money is; instead, list the software, hardware, and systems not where the big money is; instead, list the software, hardware, and systems that are more niche and have a more limited customer base. Think of things like that are more niche and have a more limited customer base. Think of things like Salesforce Salesforce , CAD applications, and flight simulator systems. , CAD applications, and flight simulator systems.
4. Combine your skills, experience, and expertise with specific markets: Combine your skills, experience, and expertise with specific markets: Here's Here's where you'll brainstorm mashups of your skills and experience with potential where you'll brainstorm mashups of your skills and experience with potential markets. For example, local upscale restaurants without an online marketing markets. For example, local upscale restaurants without an online marketing presence, business intelligence reporting for commercial real estate firms, and presence, business intelligence reporting for commercial real estate firms, and so on. so on.
How to ensure it's a profitable niche How to ensure it's a profitable niche
Before you run out and buy the necessary software and hardware (if appropriate) for Before you run out and buy the necessary software and hardware (if appropriate) for your niche, you need to do your homework to determine whether your niche is big your niche, you need to do your homework to determine whether your niche is big enough, profitable enough, and not too competitive. Here are three of the best ways to enough, profitable enough, and not too competitive. Here are three of the best ways to evaluate a niche. evaluate a niche.
Google Keyword Tool: Google Keyword Tool: You can use You can use Google's free Keyword Tool Google's free Keyword Tool to research to research search keywords, which will help you evaluate the size, competition, and search keywords, which will help you evaluate the size, competition, and profitability of niches by researching search keywords. For each keyword, you profitability of niches by researching search keywords. For each keyword, you get data on the number of searches, the degree of competition (i.e., how many get data on the number of searches, the degree of competition (i.e., how many other sites are trying to rank for the keyword), and the average Google AdWords other sites are trying to rank for the keyword), and the average Google AdWords cost per click for each keyword. Comparing the cost per click gives you a way to cost per click for each keyword. Comparing the cost per click gives you a way to measure market profitability, since advertisers will likely be able to spend more measure market profitability, since advertisers will likely be able to spend more for advertising in profitable markets. for advertising in profitable markets.
Paid tools: Paid tools: Google's Keyword Tool is great, but it can be a bit cumbersome and Google's Keyword Tool is great, but it can be a bit cumbersome and time-consuming to use. There are paid tools such as time-consuming to use. There are paid tools such as Market Samurai Market Samurai that that automate much of the research, allowing you to research niches in probably a automate much of the research, allowing you to research niches in probably a tenth of the time it'd take you to do the same research manually. What's even tenth of the time it'd take you to do the same research manually. What's even cooler is that the paid tools let you dig down to see how your competitors stack cooler is that the paid tools let you dig down to see how your competitors stack up, and where their backlinks come from so you can re-engineer those same up, and where their backlinks come from so you can re-engineer those same backlinks for your own site in an attempt to outrank your competition in search backlinks for your own site in an attempt to outrank your competition in search results. results.
Customer interviews: Customer interviews: Customer interviews and customer development is the flip Customer interviews and customer development is the flip side of product development, and this concept comes from the lean startup side of product development, and this concept comes from the lean startup framework for business development. The basic idea is that instead of starting framework for business development. The basic idea is that instead of starting with a product or service, you target a market and research the market to with a product or service, you target a market and research the market to identify its most pressing problems, so you can then create and sell solutions identify its most pressing problems, so you can then create and sell solutions for those issues. Customer interviews are one way to go about this approach; for those issues. Customer interviews are one way to go about this approach; you talk to potential customers to find out about their current problems, how you talk to potential customers to find out about their current problems, how they're addressing those problems, and how they'd like to improve their they're addressing those problems, and how they'd like to improve their situation. If you already know your market fairly well, you might have some situation. If you already know your market fairly well, you might have some ideas for solving your potential customers' biggest problems; in that case, you ideas for solving your potential customers' biggest problems; in that case, you can ask potential customers about those ideas (don't try to sell just yet) to see can ask potential customers about those ideas (don't try to sell just yet) to see whether you can validate the need for your product or service. There's a lot more whether you can validate the need for your product or service. There's a lot more to doing customer interviews well so you can get actionable information, but to doing customer interviews well so you can get actionable information, but that's a conversation for another time. For now, just know that talking to that's a conversation for another time. For now, just know that talking to prospective customers is one of the best ways to research a niche. prospective customers is one of the best ways to research a niche.
Summary Summary
Unless you can identify and target a profitable niche market and solve that market's Unless you can identify and target a profitable niche market and solve that market's problems, you're leaving your IT consulting business to chance and increasing your problems, you're leaving your IT consulting business to chance and increasing your odds of failure. If you're in a profitable niche, you'll be able to work less and earn more. odds of failure. If you're in a profitable niche, you'll be able to work less and earn more.
Related posts in IT Consultant Related posts in IT Consultant
The mistake that nearly killed my consulting career (and how to star in a Vegas The mistake that nearly killed my consulting career (and how to star in a Vegas show) show)
Don't let your niche become an empty buzzword Don't let your niche become an empty buzzword
IT consultants: Don't let your niche define you IT consultants: Don't let your niche define you
!]
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