Don’t Make These 6 Critical Mistakes When Carving Out a Profitable Niche for Your Service Business

 
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Hello, multi-faceted creative entrepreneurs with mad skills! 

If this is you AND your desire, vision & mission is to build a high-functioning, profit-generating business, then you’ve just landed on a gold mine. I am about to share 6 deadly mistakes that many creative service business owners make while they are on the hunt to discover a profitable niche that they can then double-down on.

There are many articles out there that cover steps (usually anywhere between 5 to 7 steps) to find a profitable niche. They are helpful, but no one really talks about the pitfalls that come with the process.

You may have already entertained the idea of niching down your wide range of offers before. Perhaps you may have tried by yourself, but it didn’t work out. That’s totally OK.  In this post I will show you why some attempts fail. These mistakes can be avoided so long as you are aware that they exist.

Just in case… if you are wondering why finding your profitable niche is so vital to your business, I’ve got you covered as well.  Before reading this post, start with “How to Niche Down Your Services When You Have So Much to Offer pt.1”.  This post explains 6 major reasons why it helps you grow your business exponentially.

OK, one more thing before diving in, allow me to clarify a bit about who this post is for. Better yet, let me explain this post is not designed to help those who:

 

1.     have not yet started a business and are looking for one to start

2.     are wanting to find a niche product to sell online, i.e. Amazon FBA

3.     are searching for a profitable affiliate marketing niche

 

These require a completely different set of playbooks. Instead, this post is particularly designed for multi-faceted service business owners who have existing offers that are generating revenue but want to narrow down (niche down) and redefine their profitable niches.  

Without further ado, let’s dive in.  

In a nutshell, here are the 6 common mistakes. I want to see if you are able to associate yourself with one or more of these:

 

1.     A lack of understanding what the definition of “profitable niche” is

2.     Allowing confirmation bias to take over your process

3.     A lack of trust & commitment in your ability to find a profitable niche

4.     Not setting up the right expectations for your niche discovery process

5.     Not having systems and support to set you up for success

6.     Allowing imposter syndrome to kick in as you learn more about potential competitors

 

Do any of these sounds familiar? 

 

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Mistake #1: A Lack of Understanding (Not Knowing What the Definition of Profitable Niche Is)

You might have seen the below comments on social media.  I have.  Many times.  These are the signs that they don’t fully grasp the definition of “profitable niche.”

“I have so many niches & am trying to figure out which to focus on!”

“I don’t have a niche. I will go anywhere and everywhere with my message.”

“I’m in the wellness niche.”

 

Misunderstanding what a profitable niche is will only lead you to not being able to identify one.  So, let’s go over each comment to find out why these are the wrong ways to define “profitable niche.”

Comment #1: “I have so many niches.”

What this person is actually saying is:

“I have so many business interests I am pursuing right now to generate money.”

They are not “niches.”  It should be replaced with “business interests” or “business opportunities.”  If you have a solid profitable niche, you would not be focusing on other “interests.”  Instead, you would focus on the one you see potential in and keep perfecting it.

The danger is so many people are referring to “niche” as a “play” to make it sound cool.  Nothing wrong with using sports analogies in business, but finding a profitable niche is not a tactic or a play.  It’s a journey that calls for careful process.

 

Comment #2: “I have no niche.”

I have broken down this comment in my post, “How to Niche Down When You Have So Much to Offer pt. 3,” as it pertains to one influencer talking about how not having a niche was perfectly fine for his business to thrive.

The reality is this – He has a niche; he just doesn’t view it as one.  He is the motivational voice for Millennial entrepreneurs. Where he shows up, i.e. corporate functions as a keynote speaker, doing weekly vlogs on YouTube, hosting a seminar at a marketing convention, etc., has nothing to do with not having a niche.

Although I have nothing against him, this comment is also misleading to those who don’t know the precise definition of “profitable niche.”

 

Comment #3: “I’m in the wellness niche.”

Here, anyone who makes similar statements to this is misusing the term “niche” where he should be using “industry” or “market” or “sector.”  The same goes for “I’m in the leadership niche,” “I’m in the mental health niche,” “I’m in the tech review niche,” etc.

Wellness, for example, is a much broader term with a $4.2 trillion global market cap including wellness tourism, spas, personal care & beauty, workplace wellness, fitness & mind-body, healthy/clean eating, etc.

You can see that we can hardly call this… a “niche.”  It is a ginormous market!  Clearly, you can tell that’s not defined enough. A niche that is not niched down enough will end up getting lost in the masses & will not generate any results for your business. 

Now that you know there’s so much misleading info surrounding the term “niche,” let’s redefine the term “profitable niche” for service business owners.

A Profitable Niche is:

A narrow area of the market specializing in one type of problem a specific group of people are desperately looking to solve, towards which one has his own unique approach, methodology, system and/or framework to deliver the exact results these people need based on his expertise or experience.

 

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Mistake #2: Confirmation Bias (You let "What You Hope to Be" enter into the mix.)

Do you remember writing a research paper or two when you were in college?  Then you know what I mean by this. 

The key to good research is being unbiased. If a researcher is looking only to confirm her own hypothesis, then her findings will be skewed. She must enter into the process focused solely on gathering information, no matter where it may lead her.

In reality though, this is much easier said than done because you are often too close to the task at hand. It’s your business, livelihood, identity – all combined.  Right?  I’m sure you agree that this makes it so much more challenging to stay unbiased.

Tragically, what happens in this context is many let their personal agenda get in the way of doing good honest research.  In a sense, confirmation bias contaminates the whole process of finding your profitable niche.  Eek…

Let’s be honest.  We humans are all prone to confirmation bias. We each have a narrative that we like to tell ourselves, and more often than not, we will do anything to hide the little truths that don’t quite fit. The worst part is, most of the time, we are not even aware of letting our confirmation bias getting in a way of finding a profitable niche.

But don’t despair. Here are some signs you can look out for:

 

-       Conducting skewed research by gathering only favorable evidence that you are willing to accept

-       Doing no research at all & giving in to the urge to purely go with your gut

-       Hastily confirming a niche is narrow (or small) enough to call it your niche

-       Making large assumptions about its profitability with no data to back it up

-       Being completely unaware of the answer that is right in front of you

 

If you have tried to niche down your specialization but you don’t feel you’ve succeeded, you might be able to spot some of the above being present during your process.  The first step towards success, in this case, is to identify your bias and create a way to prevent this from happening as a default.

Acknowledging your own bias can be painful. But trust me, this makes or breaks the whole process.

 
 
 

 

Mistake #3: A Lack of Trust & Commitment (Not Fully Believing This Will Work = Experiencing Resistance)

“Man…this is too hard!”

Once you make this statement in your mind, you already own the results that are generated by this statement.

You might ask, “Wait, what does that even mean?!”

It means you labeled your journey of finding your profitable niche as “hard.”  So, without fail, it is going to be hard because you decided it to be. That’s not all.  Because you made up your mind that it’s not going to be easy, most likely you will give up too soon, right before you are about to experience a phenomenal breakthrough…

I can almost hear you say, “Ugh, this mindset stuff…”  Sorry, the fact is that 80% is all about having the right mindset to get this done the right way, if not more.  This is not to be ignored.

Do you want to know something else?  Not to be a buzz kill, but it gets even worse.

The tricky part that is not talked about enough is when you think you are fully committed, but you aren’t.  To check your commitment level to catch yourself, here are some signs you can spot when you are, in reality, not committed:

 

-       Wanting to dive right in without having any proof of concept from your research

 

-       Not actively experimenting with a niche you hypothesized

 

-       Overwhelming yourself with so many questions that you are frozen, unable to act

 

-       Using those questions as excuses to not move forward

 

Do you recognize any of this?  When you feel like you are trying your hardest, but it’s going nowhere, take a look at what activities you consider as part of finding your profitable niche to be.  List them up.  You might find that you are filling up your day with busy activities that you think are contributing to the process of your niche discovery, but, in reality, have nothing to do with generating results.

By the way, if you’ve experienced this, you aren’t alone.  But why?  It’s because our brains are so good at “pretending” and we believe certain things to avoid facing what it really takes to accomplish something, and this has a lot to do with the primal part of our brains trying to protect us from life-threatening situations.

OK, this mechanism allowed our species to survive thousands of years ago, but now this is keeping us from doing something we truly want… Ironic…right?

 

 

Mistake #4: Not Setting the Right Expectations for the Process in the Long Run

Newsflash: Depending on where you are at with your business, the process of finding your profitable niche can go on for anywhere from a few months to more than a year.  How you define “long” is up to you.

But if you are like me, someone who understands the benefit of investing in frontloading work, you would agree that you would rather intensively work on this up front to do your future self a favor.

During the process, expect it to get messy at times.  Feeling like you’re taking 1 step forward and 2 steps back is completely normal.  Trusting the system & going through the messy middle will get you to the place where it gets easier to run and grow your business. Guaranteed.

These are the 5 major facts that shape the right expectations:

 

Fact #1: It's not a linear process. Sometimes you have to walk away from it.  Sometimes you need to scrap what you have & start all over again.

Fact #2: There's no telling how long it will take until you start to see results in numbers and dollars.

Fact #3: Consistently working at it will guide you to the next steps. Know that no action you take will be a waste.

Fact #4: It is not about picking, choosing, or deciding a niche. The process isn’t like shopping on Amazon.

Fact #5: You will find a bunch of other businesses doing something similar as to what you are aiming for.

 

I may even add, in many cases, profitable niches are found by accident or discovered by learning.  It’s not so much about “deciding” or “picking” which niche to pursue. 

For example, a photographer who specializes in taking family portraits with adopted children to help adoptive families strengthen their bond with their adopted children was not something she handpicked intentionally from the beginning.  

After working as a generic family portrait photographer for years, she adopted kids. Then she became an advocate for families who wish to adopt children from all over the world.  Through her craft and understanding the adoption process, she has discovered her profitable niche.


Mistake #5: No Systems & No Support in Place

What’s guaranteed to make the process unfruitful is not having these 3 key ingredients in place:

 

1.     A system that allows you to stay in your lane

2.     A support/accountability system

3.     A system to track your progress

 

Do keep in mind, aimlessly or randomly exploring your niche discovery process by going down the rabbit hole on the Internet will set you back big time.  On the flip side, if you have a systematic approach to the process, it’s less likely for you to be sidetracked because the system will keep you away from placing yourself in the land of indecision.

Also, let’s not forget the impact of having a solid list of supportive people who can hold you accountable. Not only that, they can help you stay out of your confirmation bias because they are far removed from your business. But choose wisely who to consult with. 

Lastly, no data, no business. If you are not tracking measurable results while you conduct your niche discovery process, you are going to have a hard time assessing what worked better than the rest.  The most simplified snapshot of a successful niche has these characteristics:

 

-       Your business spends much less time and far fewer resources (at least 25% less) on advertising, marketing & promotions.

-       You work fewer hours (at least 25% less) because you no longer accept ad hoc projects.

-       Revenue increases significantly (anywhere from 50% up to doubling or tripling).

 

These are the signs that your business has gone through a massive breakthrough that you can’t ignore.  All else is… considered as not resulting in success.

 

 

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Mistake #6: Allowing Imposter Syndrome to Creep In (Becoming Discouraged as You Learn More about Competitors)

That’s right.  Don’t get too relaxed just yet.  You may have answered, “Nope, that’s not me,” to the first 5 mistakes, but I’m not done with the list yet! 

This one is huge.  As you move along with your niche discovery process, you will start to see potential competitors who have been at it for some time.  Your initial reaction can be disappointment or discouragement.  That’s normal.  But remember, no competitors often means that what you are trying to do is not profitable enough to sustain as a business.

In a way, confirming the existence of potential competitors is good news.  It’s validation that some businesses are generating revenues from the same niche.  From there, what you can explore are ways to make your offers effective and original. 

This might mean offering a completely different approach, offering a simplified yet effective framework, or delivering in a different way that is more effective than that of your competitors.

This is counter-intuitive thinking, I know.  It’s hard to overlook the fact that maybe their websites are beautifully designed and/or they seem they have their systems down cold. This can be discouraging not to mention intimidating. 

This is when you find yourself getting deeper into imposter syndrome, believing you aren’t qualified enough to go up against them.

You might be telling yourself, “I thought my idea was unique. Starting now won’t allow me to get ahead of those who have been doing this for years... Ugh, forget it.”

Wait, wait, wait!  Before throwing in the towel, take a closer look at them.  Are they really generating revenues?  Or do they just look like they are doing well?  There are ways to find that out. 

Also, be sure you check both what you see and what you don’t see.  Ha!  Do you see that, by closely studying them, you might find holes in their businesses?  That only means one thing – opportunities! 

 

Guilty as Charged?  Don’t Sweat It.

If you make it this far in the post, I take it you are very serious about fixing your niche problem.  And I cannot be more excited!  To ensure your success with your niche discovery process, I have created Define + Refine Your Profitable Niche program. Just sign up to receive the latest info and resources for this program. 

Define + Refine Your Profitable Niche is specifically designed to help creative entrepreneurs like you find a profitable niche by using a simple framework guaranteed to bring measurable results without making these detrimental mistakes I shared here.

No more burned out, stretched out, cashed out existence.  There is a better way to fall in love with your business all over again. 

So, don’t forget to sign up now to be the 1st to know everything about this program.  This is the only way to find out limited offers!  See you on the other side!