As a consultant or freelancer, you already know things that other people are willing to pay you for.
- You may be a business consultant that helps companies market themselves better, or perhaps you are a freelance designer that helps small companies create websites.
- You may be a coder, or a personal trainer, or a grantwriter.
Whatever your specialty is, you have knowledge and skills that are valuable to people in your target industry.
You’ve already done your market research, because you’ve got paying clients who are hiring you to help them achieve their desired outcomes. Now, your goal is to take what you already know and turn it into knowledge that you can package and sell.
2 Audience Types to Determine Your Passive Income Niche
When it comes to figuring out exactly what your passive income niche is going to be, it is helpful to understand that there are two different types of audiences you can sell your knowledge and skills to.
1. Sell to Your Client Universe
The first audience you can sell to is your client universe. This doesn’t mean selling to just your current clients — it means selling to all of the people in the world who are like your current clients, and share the same problems your current clients have… problems that you know how to solve.
Thus, if you’re a social media expert that consults with small businesses, you can create passive income products that teach small businesses how to do what you do. You could create classes about gaining followers on social media platforms, write e-books about how to sell more products through social media, and host webinars on best practices for social media management.
Likewise, if you’re a personal trainer that works with clients who want to get in shape quickly, you could create online classes teaching people how to jumpstart their weight loss, and host webinars showing people how to eat healthy even when they eat out.
When selling to your client universe, you’re taking what you are already doing for your clients and packaging it to sell it to the world at large.
2. Sell to Your Peer Group
The second audience you can sell to is your peer group. If you’ve had success with your consulting or freelance business, you can teach other consultants and freelancers in your niche the secrets of your success.
For example, if you’re a grantwriter who has had great success finding large clients who need your services, you can teach other grantwriters how to accomplish the same feat.
Likewise, if you’re a super-successful business consultant, you can teach other business people how they too can start successful consulting companies.
Which Type Should You Choose?
Generally, it is easier to sell to your client universe than to your peers. There are a few key reasons for this:
- First, you are already selling services to your clients, so you know how to reach them and how to market to them, plus you probably already have a small following of current and former clients who would help you get the word out about your new products.
- Second, your client universe will normally be larger than your peer group. If you’re a non-profit fundraising consultant, there are lots more non-profits out there (your client universe) than there are fundraising consultants (your peer group). Thus, you have many more potential customers who might be interested in purchasing what you create.
Some consultants and freelancers create successful information products for both audiences. They sell products to their client universe, as well as to their peer group.
While this can be done, my suggestion is to start with your client universe. Work hard to create passive income streams by selling to your client universe, and only after you have done that successfully should you consider creating products for your peer group.
Should You Focus on a Narrower Market, or Go Big?
One other question you might have is whether you should focus on a narrower market or go bigger as you build your brand.
For example, let’s say you are a guitar teacher who teaches students of all ages and skill levels. But as you look at your past and current clients, you realize you mostly teach working-aged students rather than children. Similarly, you find that most of your students are interested in learning to play rock and pop music, as opposed to classical, jazz, or other types of guitar.
So you have decided to create a 10-part online class to teach beginner guitar concepts.
- Should you go big, and offer a class called “Learn How to Play Basic Guitar in 10 Easy Lessons,” focusing your marketing on everybody who is willing to pay?
- Or should you create a class called “Learn How to Play Rock n’ Roll by Next Weekend: A Guitar Primer for Busy People,” focusing your marketing on people ages 40-70 who want to quickly learn to play a few rock songs to impress their neighbors?
The answer is, “it depends.”
Market Research & The Benefits of Specificity
Before choosing the niche for your passive income products, you need to do some market research. You need to go online and spend an hour looking at all of the other products that are being offered in your niche.
- What companies and entrepreneurs are online teaching people to play guitar?
- How narrow or broad is their marketing? Are they trying to appeal to everyone?
- How slick are their website and marketing materials?
The more people that are currently in your space, the harder it will be to build a successful brand around your business — unless you focus on a particular market.
Your goal should be to be known as “THE guy” or “THE gal” in your market. Without spending tons of money on advertising, it would be hard to be known as “THE online guitar lesson guy,” because there are so many other people and companies in the space.
It would be easier to become known as “THE online rock n’ roll guitar lesson guy,” and even easier to become known as “THE online rock n’ roll guitar lesson guy for middle-aged people with no experience.”
(Note that I have done absolutely no research on these niches, so be sure to do your own research. I am using them as examples only.)
Specificity is Key to “Owning” Your Niche
It’s way easier to make a name for yourself and to “own” your niche if you are specific in who you serve. Specificity also helps make your marketing easier and more effective.
It would be hard to “own” a niche teaching people how to build business websites that convert well… the space is already crowded and ads targeting that niche are expensive.
That said, you might be able to absolutely OWN a niche teaching dentists how to build business websites that convert well, or teaching personal injury lawyers how to find more clients online. The key is to drill down and get specific.