How to Pick a Consulting Niche

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Hi team!

Sheena Iyengar shows us how Jam could teach us a little something about consulting.

She set up 24 jam samples. As you can see, a majority of shoppers stopped by very few bought any jam.

The next day, she changed things up:

People buy substantially more when they have fewer choices. This is called the paradox of choice.

Why does this matter for us?

I believe the paradox of choice negatively impacts most new consultants.

Let’s talk about:

1. Why the paradox of choice impacts new consultants

2. How to solve it

3. Our interesting investment property of the week (we’re talking house hack this week!)

Here we go!

1. Why the paradox of choice impacts new consultants

Consulting is a $330B industry worldwide (and growing, BTW).

UpWork alone has 195 different categories for different consulting types. I actually scraped them all HERE if you’re interested.

There are a lot of opportunities to consult.

In fact, its too many. It’s almost as if there’s a paradox of choice at play!

This paradox of choice leads most consultants to struggle to find their particular niche. In fact, “how do I pick a niche?” is one of the most common questions I get.

It’s also why “how to pick a niche” got the most votes in last week’s poll!

So, let’s talk about how to do it!

2. How to solve the paradox of choice AKA How to pick a niche

After years in independent consulting and picking my own niche, here’s how I would approach it.

If you have detailed work experience, then you absolutely should stick in that particular field.

The other consideration is an unfair advantage to land clients. That might sound confusing. Let’s talk about an example.

An example here is if you have good friends at Salesforce.

If Salesforce will refer you clients to help set up their software, then you have an unfair advantage to win clients here.

You should use that as your niche!

(BTW: this is a real example. Software companies frequently refer work to implement their software)

I don’t have either and am in the “Paid Trial” bucket! What do I do now?

First, welcome! That’s where I started, and where >90% of consultants start too.

Paid trial means you get paid to try different niches. Here’s how to do that.

First, make a list of your specific hard skills.

For example, maybe you are really stellar at making powerpoint presentations. Let’s try as many projects as we possibly can based on that hard skill.

You can:

• Make pitch decks for startups looking to raise money

• Build “Dashboard” slides to communicate business status to executives

• Make “donor decks” for non-profits to send to prospective donors

Or any other examples out there.

All of these projects are different applications of the same skill.

This is the best possible way to find a niche:

• You utilize a skill you already have

• You get paid

• You get to learn what kind of work you like or don’t like

Maybe you liked the donor deck the most. So, you do a couple more projects in the space.

Fast forward 6 months, and you are now a specialized consultant in donor decks. You love what you do.

Since you’re specialized, you also:

• Have an easier time finding clients

• Make more money

What if I don’t have any skills?

Think of it this way: if you have ever held a job before, then a company thought you had skill.

You don’t need to be the world’s greatest powerpoint expert. You could be average at powerpoint.

That’s a skill!

Interesting Property of the Week

This week’s interesting property of the week comes to us from the Research Triangle in North Carolina.

I am extremely bullish on this area for real estate investing. So, let’s take a look at a potential “house hack” in the area.

There are four units here and it looks like each is a 2 bedroom, 1 bath. The property is asking $675,000

The units look pretty well cared for. They aren’t “fancy”, but clean and in good shape.

This listing photo is extremely telling too…in a good way!

#1: these are split electrical meters. That means each tenant is paying their own electricity.

#2: Those are new windows. We can tell since they still have the yellow stickers on them.

Windows are not cheap, and in my experience, infrequently upgraded. If the landlord upgraded them here, then the current owner likely took good care of the place.

(I doubt this was fixing a broken window. If that was the case, it would be only one new window. We can see there are at least two new windows)

#3. The Air Conditioning Units have a visible sticker to record maintenance on them. Typically those wear down if they aren’t used regularly.

That makes me think these A/C units are new, or well cared for.

Rentometer says to expect about $1,000/month in rent. Although, I think that might be low. Look at how tight the spread is from the 25th to 75 percentile!

Based on comps, I think you could get ~$1,200.

So let’s do the math. We’ll assume you live in one unit and you rent the other three for $1,200/month/each.

Rent: $3,600/month

Cost: $5,059/month

• PITI: $4,149 (assumes 20% down, 30year am, 6.5%)

• Maintenance: $550

• Vacancy: $360

Profit: -$1,450

So, not a “profitable” house hack where you could live for free. These numbers would actually get worse if a buyer put less than 20% down.

Is this a bad buy though?

Honestly, likely situationally dependent. You could make a good case to buy it or not buy it.

How can I help?

If you reply to this email, it will come directly to me & I’ll respond.

To preface: I don’t have any formalized training to help people get started consulting.

I’ve helped people one on one (like in this video), but I’m still learning on how to teach multiple people at once.

Every~6 weeks or so, I’m teaching a free class of ~5 people how to get started consulting. That could help more people get started, and allow me to learn how to teach in a larger setting.

What would be most helpful for you next week?