How to Choose the Best Industry Niche


Some freelancers shy away from picking a niche. However, narrowing the focus provides several benefits.

If you worry that the focus will box you into a single role or pigeon-hole you, look at it from the client’s perspective. When they hire graphic designers, video editors, and hair stylists, clients aim to achieve specific goals.

Why Specialize

Some hair stylists can handle long hair on females but don’t have the same confidence with boys’ hair. Thus, it’s best to communicate your skills to the client upfront.

Once you become a specialist in one type of hair, you can book your calendar with those clients and profit. You’ll become the go-to and increase your value.

A debate surrounds whether it’s best to become a jack of all trades or specialist. Opportunities exist for entrepreneurs who have a focus and then, can execute adjacent skills.

We outline seven steps on how to choose the best industry niche for your freelance business.

1. Find Your Passion

To pick a niche, find your passion. Having a passion for a skill means that your love for it will motivate you to become better at it. The learning curve becomes steeper when learning something feels like a chore instead of an opportunity.

A passion for a specific career path also means you’ll stick with it longer, especially through the highs and lows.

2. Understand Your Skills

The best way to make money from your passion is to match it with your skills. It’s one thing to have a passion for professional sports or entertainment. However, those who cannot sing on key or beat have less chance of becoming professional singers.

Technology helps individuals engineer their skills. If you can’t calculate complex calculations in your mind or on paper, technology helps you solve them.

It’s also worth exploring the skills that come naturally to you. They might surprise you.

3. Research the Market

The market determines the success of products and services. For example, the sharing economy has seen a good run thanks to millennials. Millennials don’t mind renting or leasing. The generations before them hold owning things, such as homes, closer to their hearts.

If a market exists for your skills, you can build a niche around them. Enterprising entrepreneurs have built a market for their skills too. Your success depends on how deep into the trenches you can dig.

4. Find Problems that Need Solving

The products and services that stand the test of time solve problems. The late 1800s and early 1900s gave birth to several American businesses that still operate in 2022. Some go further back to the 1600s including the Hartford Courant and Ames.

Marketing will help you sell your product or service. However, it’s best when the product or service can sell itself. Advertising keeps them in the minds of the public. Then, the purchases should happen organically.

5. Test It

Even though companies don’t advertise it, they do run tests on products and services before officially launching them. Missing the mark is an error that most companies cannot survive; the expense is too great.

Test your niche on a small scale. For example, pre-book appointments or hold pre-sales. The strategy helps you gauge the market and create buzz.

6. Determine Its Profit Potential

One way to determine the profit potential of a niche is to seek funding. Banks and lenders will quickly turn away business plans that they see as hobbies as opposed to businesses.

Luke Lee, the CEO of Palaleather shares, “Starting a business can be a daunting task, but with careful planning, it can be a successful endeavor. One of the most important aspects of starting a business is by creating a business plan. The business plan will lay out the nature and line of business, goals, objectives of the company, funding requirements, how the company will profit, as well as how it will operate. Without a business plan, it can be difficult to make a startup business successful.”

Entrepreneurs conduct a lot of research in their careers. After researching the competition, find out if your niche has profit potential.

If it solves problems for a loyal customer base, the niche has profit potential.

7. Build On It

When your niche has the potential to turn a profit, capitalize on it. Build on it by investing in the startup costs and registering the company.

Companies have shut their doors after failing to capitalize on demand. The missed opportunity had such an impact that they could not recover. Others overestimate demand and find themselves with a warehouse full of inventory or raw materials.

When you walk on the right path, building on a niche turns into a seamless experience. The pieces fall into place more easily.


Picking a niche doesn’t box in entrepreneurs; it helps them focus. Once clients understand what you do well, it gives them the confidence to work with you. Freelancers can still work in other niches but your specialty increases your value, especially if you’re among the few who can execute it.