It's Not About The Money

[00:00:00] Tyler: So something that Steve and I have in common is that we're strong believers in the Oxford comma, right, Steve?

[00:00:08] Steve: I love the Oxford comma. I am a big fan.

[00:00:12] Tyler: Yeah, me too. I can't let it go. I've let go of a lot of other older conventions, mostly thanks to HTML and how it handles spaces, but we don't need to get into that.

[00:00:22] Steve: Hmm. Mm-hmm. Mm-hmm. I used to be a stickler for grammar and spelling and things, and now I am, I'm much more uh, in the camp of grammar should be descriptive rather than proscriptive or prescriptive of like, language is evolving and that's okay. That's good.

[00:00:45] Tyler: I'm glad that you think that about yourself. I think you're still a little bit on of a grammar nerd, but you know,

[00:00:51] Steve: that, that is fair. But

[00:00:52] Tyler: you're recovering. You're recovering.

[00:00:54] Steve: I'm recovering. I like it.

[00:00:56] Tyler: So I wanted to ask if we have something else in common. Where do you stand on the gif versus gif pronunciation?

[00:01:05] Steve: I'm trying to remember. I think that I say "gif" because the first word is graphics interchange format, and so I say "gif", but I am, I don't entirely remember. I know there was a big kerfuffle about it years ago on the internet, and it, it, it became a, a divisive issue, but,

[00:01:27] Tyler: and I am on the other side of that divide as a staunch "jif" proponent, so,

[00:01:35] Steve: Okay. Like the peanut butter.

[00:01:37] Tyler: Like the peanut butter. Yes and no. There's not a logical argument, like the first word is graphic. No, it's just, I don't know. It's the way I learned it. That's the way I thought it was. And anyway.

How about this one? Niche versus niche.

[00:01:51] Steve: I think I've said it both ways and I don't know what my internal logic is for either one. Ni niching, niching nich. So if it's, if it's the gerund, I think I say niching. But if it's the noun, I think I say niche. How's that for bizarre?

[00:02:11] Tyler: Yeah, no, that is bizarre. Welcome to language, I guess. That's interesting. Well, let's pick one because that's the topic of today's episode. So let's, can we agree on, I'll, I'll agree with you. Niche and niching.

[00:02:23] Steve: Okay. Fair enough. We'll just, we'll split the baby.

[00:02:27] Tyler: Okay, cool.

[00:02:30] Steve: Dear listener, hello, I am Steve.

[00:02:41] Tyler: And I'm Tyler and welcome to, It's Not About the Money, where we discuss a wide range of topics related to creating and running small businesses.

[00:02:49] Steve: Tyler and I are small business owners ourselves just trying to make sense of the world, one podcast at a time,

and today, We are talking about niching. Did I say the right one?

niching

[00:03:05] Tyler: niching or what is your niche?

[00:03:08] Steve: How do, do you find a niche?

or not?

[00:03:12] Tyler: So I guess my first question is why are we talking about this as relatively new small business owners?

[00:03:18] Steve: that is a good question. Uh, In the accounting space, at least, my impression so far is that, The, the more profitable clients out there are the ones who are looking for someone with expertise in their particular problems, their particular situation. Uh, And so it would be beneficial for me as a sole proprietor to uh, to specialize in something that solving a particular.

Category of problems for a particular kind of client, rather than trying to be a generalist that just does taxes for everybody. Cuz then I'm competing with TurboTax and H&R Block and know, they're like a retail franchise, uh, which is not really a game that I want to be in because I'm not uh, I'm not looking for high low margin. Um, tax returns as a, as a side business, you know?

[00:04:26] Tyler: of the, of the word. No. You're, you're, so, you're, you're focusing on finding a niche because advantageous to your ability to run, find the kind of clients that you're looking for therefore have better margins basically.

[00:04:42] Steve: That's right. And so I think about this all the time, which is, which is why I suggested the topic or, uh, which one of us suggested it, but.

[00:04:53] Tyler: I think it's a, it's a great topic because you know, as I was preparing to start a business, I was exposed to a lot of content on the internet about how to market yourself, how to find customers, all that kind of stuff. And this is a theme that came up over and over and over again. Every time marketing or sales, um, And it was very difficult for me in the beginning because I had no idea what was going to be or, uh, who my ideal customer was going to be.

And so I would occasionally try and sit down and figure it out, like write out a customer avatar. And it never got very far. Cause I was like, I'm just making this up. I'm just like imagining something and making it up. I've come a long way since then. But anyway. Yeah, I, I think it's, it's one of those things that's, that's very commonly talked about in marketing.

[00:05:45] Steve: It is. Yeah. Especially on the marketing side. That's a good point. Because if you are trying to advertise to everybody, then you're competing against every service provider on the planet, including the ones that have higher leverage, like software Um, Yeah, But, um, I want to talk more about this, that uh, for me, trying to find, uh, a niche so far has been like, I already know that the, there's certain aspects of taxes that I enjoy more, or there's certain kinds of business owners that I like working with more.

And so that has guided me very naturally in this process of discovering where I want to focus. And I think it is an iterative process for me. But It's, uh, it was a little more forced of like, well, I don't know who the, who my ideal client is yet. I-- Can you, can you talk more about

[00:06:45] Tyler: Yeah, I mean, it's been a journey and I've changed my mind several times as to what I think about this. So I already described the beginning of the journey, which is I found out about the concept of niching. and um, I sounded very logical to me and like a very good idea for a lot of the reasons that you've already mentioned.

But when I sat down to actually do it, I don't feel like I had enough experience or knowledge to do it successfully based on like, the amount of data that I had at the time, which was nothing, you know, in terms or potential customers. Um, But as you said, that was just my first iteration. Um, I tried a few different things. I was like, oh, I'll focus on people like me. So basically for a while I was focusing on workers cause that's what I am. Um, Basically, you know, people with white collar jobs who Uh, And then I was exposed to a counterpoint to this by a guy by the name of Mark Butler.

He's come up once or twice on the podcast so far. Yeah. he's coach. He's a, he's a personal finance coach, uh, who has a lot to say about coaching. I think most of indeed actually kind of high profile, uh, high income coaches. And so he's, he knows a lot about the space of coaching.

Particularly life coaching and, and money coaching and things like that. And he feels very strongly that you should not niche down. And I find that interesting. I've had to think a lot about that. Uh, And his argument basically is that if you choose a niche up front and then build your marketing and growth and business efforts around that, what if you were wrong? And you don't appeal to that niche at all. Or, you know, you've, you've set up your website with a domain name and, and chosen name for your business, all based on this idea of a niche. And then it turns out that you need to pivot because that's not working. Like then what do you do? And I, I really latched onto that idea for a while actually.

Um, Long enough for me to actually not worry about it anymore. So I just me. Uh, Now though, now that I've had, uh, quite a few clients relative right? So a dozen or so clients, um, I'm starting to notice what they have in common. now I'm kind of coming back around to the idea, uh, which is also something I got from Mark, which is, you know, just do your thing.

And this maybe applies to like something like life coaching that's more generic than, than tax preparation. I'm not sure, but. And then let your niche emerge, right? He's like, you will, you will end up with a niche, but it might be better to let it emerge than to pre-decide what it should be. And so, I think that's sort of starting to happen with me.

And so that's where I'm at right now is I'm starting to come back idea of like, yes, I should have a niche. Uh, And I'm still at the beginning of the process of understanding what it is and what it looks like, but it's kind of coming together a little bit, and I think it'll continue to iterate and I'll refine it and adjust it, and even change it as my business grows.

Right? I mean, wouldn't it be cool to have a niche of like super wealthy people that want to pay me tons of money because it's just a drop in the bucket net worth or whatever. Yeah. Yeah. That'd be great. I'm not there. Uh, But, but yeah. Anyway, that's a little summary of my thinking on this topic over the last year.

[00:10:04] Steve: lot of sense. I like the idea of, uh, letting your niche emerge as you're kind of discovering it. Do you think that Mark's advice is more applicable to coaches than to other

sorts of

businesses

[00:10:22] Tyler: I've wondered about that.

[00:10:23] Steve: Or even particular types of coaches, like life coaches versus I don't financial coaches like you are?

[00:10:29] Tyler: Right. Well, I've had to think about this a lot because I didn't want to just take one person's word for this without doing some first principles, reasoning as much as I'm capable of or whatever. Right. So I, you know, his audience, I heard this on his podcast and his audience I think was primarily life coaches, which is a more, uh, generic term for people who, who coach people around finding a purpose in their life and setting goals, you know, creating a vision, setting goals and working towards that vision.

It could be anything. And yes, there are lots of life coaches that niche down and get specific, and that's, that's fine, but, but, I think it definitely applies to that want to become life coaches. Um, And even though I don't consider myself a life coach in general, I'm, I'm focused on personal finance coaching, so, It's pretty inevitable that we get into life coaching because money is so

[00:11:26] Steve: It's tied

up in everything.

[00:11:27] Tyler: central to the way that our-- Exactly like it, it, it touches almost every part of our lives.

Right? You could even argue like the non-tangible parts, like our spirituality, our emotions, our mental health, like all these things, not just our bank accounts. So, so it's been interesting because uh, yeah, that's another way I've changed a little bit is at first I was like, Nope, we only talk about money. I'm here to help you do a budget and get your finances on track.

And that is still what I do. However, I'm always surprised how quickly the conversation becomes wait for it, not about the money. It's always, it's about, it's always about something more, something deeper. So, so anyway, but yeah, so to answer your question, I do think that that applies to his which is coaches. Um,

[00:12:13] Steve: So I wonder if the way you describe it, if, uh, life coaches like, is the niche, uh, like that's, that's as narrow as you need it to be if that's the space you're in.

There's still

[00:12:28] Tyler: Do you, Do you, mean for me in my business

[00:12:31] Steve: uh, No uh, at, at Mark's audience of Life

[00:12:34] Tyler: oh, yeah. Um, I think that's his general audience that he, you know, far, lo far along enough in enough along in uh, you know, he's got, um, into that upper echelon, I guess you could say, of clients in terms of what he is, what he is able to charge, and, and what the, the type that he, that he is able to work with. Um, But I think his hope is that by helping people become successful at life coaching, they will get themselves into that upper echelon through being successful. Right. And then, uh, be his ideal type of client. I don't wanna put words into his mouth. I, I would just say if I were that's what I would be doing. So, and, uh, it seems to be working out for him as far as I can tell.

So,

[00:13:18] Steve: that makes sense.

[00:13:20] Tyler: but yeah, I mean, I don't know. I, I,

I think it really comes down to what kind of business you're, you're trying to do. I could imagine that there are businesses where it's much easier and, and a simpler process to know what you. What your niche would be.

I mean, if you're making uh, trying to sell sports equipment for pickleball, I bring that up. Cause that's like a big thing right now where I'm at. I think maybe storming the country, I obviously you're gonna be, uh, looking to target people who are into sports, who are into pickleball, who are active, you know, or want to be active, that kind of thing.

So I, I, I don't know. I think it depends, which is an annoying answer. I'm sorry,

[00:13:57] Steve: It. Well, I use that answer all the time in, uh, in accounting, so that's

fair.

[00:14:03] Tyler: Maybe and you know, here's some, here's like a little bit of the coaching me coming out here. It's like I would say to someone, what is your business and what do you think your niche is going to be? And if you're having a really hard time figuring that out, like I was, then maybe start without one and just start talking to people about your business until you start to get a few customers and then, and then go from there.

You will get insights. You know, as long as you have a direction and you're moving forward, you'll, you'll figure things out as you go.

[00:14:33] Steve: I like that idea where if it, if it's difficult to articulate the niche, you might be too early in the process to properly discover it. And you just gotta get out and do the work for someone, some people for a while and, and figure it out, and then it will emerge.

[00:14:52] Tyler: Yeah, exactly. And you don't want to get stuck, right? Like it's easy. Like if all the marketing content on the internet is telling you step one, pick a niche and you're stuck on that, and you never move past that because you never feel like you've defined your niche adequately, then you're just never gonna accomplish anything, right?

So,

[00:15:10] Steve: Good. There's one other concept that I wanna discuss with you on this, which is horizontal niches versus vertical niches. And let me

explain what I mean by that.

Uh, A vertical niche might be I, in the tax business, for example, I work with uh, restaurant owners or I only work with coffee shop owners or something like that, where you, you have a, a particular sort of business that they do. You know that business inside and out, and you only work with that kind of business owner.

A horizontal niche might be more like, I work business owners who make, uh, between one and 5 million dollars a year in revenue. And it doesn't matter so much what the business is. But if they're in that revenue band, then you know some things about their business and their financial needs, and so you can meet them, whatever the business might be. They could be in real estate they could be doing a restaurant, they could be, uh, doing solo web uh, whatever it might be. But you can have that kind of a, a horizontal

[00:16:27] Tyler: struggling with it, but that's really interesting, uh, because I've heard, I. Elements of both horizontal and vertical niches? Uh, In the literature, I guess, or the literature, the YouTube things. But, but, uh, like, uh, yeah. that's interesting.

So basically, one is situational or circumstantial, I guess I, I'm not sure what the right word is there, but, you know, based on the size of the revenue or the size and the complexity of the business, regardless of what Domain or vertical they're in, right? Huh? Well, uh, are you, so are you picking a certain vertical or horizontal axis here, or are you trying to combine both into like a hyperfocused.

[00:17:11] Steve: At the moment, I think, um, I have a horizontal niche, which is, uh, solopreneurs and business owners who have less than like five to 10 employees. Because I'm not articulating a particular kind of business or what you do, or even how many employees you have. All of that's kind of in a range. I don't have like a specific revenue range

[00:17:35] Tyler: okay. That's interesting. So you, you don't necessarily care what kind of business these people are in as long as they're of a certain maturity, I guess you could say.

[00:17:49] Steve: That's right, and I imagine that will continue to evolve. But that's where I am at right now.

[00:17:55] Tyler: Okay. That's cool. I, I really like this idea and I'm, I'm trying to think of how I could apply this to myself. I, well, I mentioned earlier that I'm starting to see a pattern in what a lot of my clients have in common, uh, I'm thinking mostly it's a horizontal thing, like it tends to be an income range. It tends to be people, uh, who make decent or good money in many cases. So you could compare that to like, what size is the business, I suppose, or the, you know, what, the maturity of their financials, well, I won't say the maturity of their financial situation, but their, their revenue, their income. Right.

And then another thing that they all have in common right now is that they have heard of or want to use, uh, YNAB the software.

[00:18:46] Steve: Right.

[00:18:47] Tyler: Which makes sense considering my background and how I got into coaching in the first place through the YNAB certification program. Um, and so even though I am happy to coach on personal finance in general, whether or not someone wants to use YNAB so far, that's where all my clients are coming from. So I, I feel like that's definitely part of, a big part of my niche right now is people who are, have heard of, are already interested in, in that budgeting software.

[00:19:13] Steve: Mm-hmm.

[00:19:14] Tyler: And then another thing they all have in common is they're not happy with their personal finances. Right? Like that, or else be looking for help? So, so that's, so basically, uh, higher income, have heard of YNAB or want to use it or have tried to use it and failed for whatever reason, and they're just kind of sick of, of having their finances be outta control.

So in short, it tends to be people who make a lot of money, but who don't have. Much of it left through, you know, because it's just outta control. They've either are, and it can come down to like disorganization choices or all kinds of, you know, or like really, uh, dramatic life change circumstances like divorce, marriage, uh, graduating, those kinds of things.

So

anyway.

[00:20:00] Steve: There you go.

So if I were to summarize what we've discussed so far, I think the salient points are if you're having a hard time articulating your niche uh, or you're, you just don't know where to start, it might be too early. And so don't let that be a hangup to getting the business

going. Still go out there and get some clients, and if they're not, if you eventually choose a different niche, that is okay.

You can even, I, I even think it's okay to pick a niche and go into it and then the exercise of doing that you discover, oh, actually I don't want to do this. I would rather do this

other thing. That's totally fine too. So that can be a useful exercise.

So there's that. And then, um, horizontal versus vertical niches. I mean, that could be a false dichotomy, like trying to square it onto one of those axes. Cuz like, like we discussed, it's sort of, it's kind of both sometimes, but I think it's a useful rubric for thinking about

it.

[00:21:09] Tyler: And I think, you know, the vertical niche actually has a lot of power uh, like that's why I kind of initially pursued that knowledge worker niche idea. Cause that's what I know. Like I'm used to having a corporate job. I work at an office, I'm a middle manager. Uh, I know that world, right? I, I have the same struggles as and, and hopes and dreams and like curiosities as other people who were in that situation. So I guess initially my, my niche was, I was thinking is people who are similar to me in a lot of ways. And I think you can create a sense of connection that way.

It's like, oh, I know what you're going through, or I understand your situation because I am in that very situation, or I have been through that situation and I've come out the other side and I can have that experience to draw on. So I honestly.

[00:22:00] Steve: Yeah. agree. You're always hearing about the CPA who, who only does dentists.

At least. Well, maybe you're not

always hearing about that. I'm

[00:22:11] Tyler: No, I've never heard of that in my life.

[00:22:13] Steve: So that, that's a very, that's a very common, um, niche for a CPA to focus on is like dentists or doctors or like, they, they have particular needs and if you can understand them really well, where you can take care of a dentist from the day they graduate dental school until retire And sell their practice.

And you can, uh, get, follow that whole process and you know, all the can be a really powerful, uh, role to play as a, as an

advisor.

[00:22:42] Tyler: Yeah. And that sounds lucrative too.

[00:22:45] Steve: Indeed.

[00:22:47] Tyler: You should get on that. I'm just kidding. I, I actually think it's really cool that you're focusing on solopreneurs, cuz again, that's what you are, right? That's. You're kind of in that niche yourself. so So I think to answer the question of this episode, which is "to niche or not to niche", I'm gonna go with, yes, you should definitely niche. But you can, there's multiple ways to get there, right? Like we talked about, you can either decide beforehand if it's really clear to you, and then adjust as you go along, or don't stress about it. Just start and then use your feedback and the experiences that you have to let that niche emerge naturally.

[00:23:29] Steve: I agree, and the reasons for doing that is you can end up having a more profitable business that is easier to run. Marketing for because you know exactly who your customer is and they can see you as an expert in whatever it is that you do for them.

[00:23:49] Tyler: Yeah, and there's probably a cool effect as well, right? Like, uh, in people who are into the same stuff, uh, know other people who are into the same stuff situations. So they might, they might, uh, You know, drop your name or talk about you naturally in conversation. So,

[00:24:06] Steve: Yeah, that's a good point.

[00:24:07] Tyler: okay.

I, you know what, I'm changing. I'm, I'm a bit at, I at the end of this episode, I am now a bigger fan of ni-- niching than I was at the beginning. I think I'm, I'm, I'm coming around.

[00:24:20] Steve: Great. Well, that's good to hear. I, I'm a fan, so I'm glad I have persuaded you a bit more

than you already

[00:24:27] Tyler: We'll see how it keeps going for me.

[00:24:30] Steve: Well, thanks everyone for listening. If you questions, comments, uh, topic suggestions, you can email us at hello@notaboutmoney.com. And we will see you again on another