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First email I've written for ConsultingTycoon.com in 2015.
Took some time at the start of the year to launch a new business and focus on helping my inner circle clients.
It's amazing how much progress you can make in six weeks of solid focus. And crazy how fast the year is passing by.
Anyway, now the dust has settled I thought I'd spend a few days answering your questions about consulting. Already got a bunch that have come in over the past few weeks, but if you've got a question just hit reply and fire away and I'll add it to the list for next week.
First up is Greg:
"Quick question, what is the best way to validate a market? I picked a niche from your 47 players list. However I just can't shake the feeling that there isn't enough money in this market and I want to settle this feeling quickly. From what I gather the top end of earnings for a __________ isn't more than £70k. I'd really appreciate any advice you could offer. :)"
You can get a quick feel for the market just by looking around.
Are they spending decent amounts of money on marketing? Are they already buying the type of thing you want to sell in the price range you want to sell it? Are they already working with consultants or other outsource providers?
If it doesn't pass these tests then it'll likely be an uphill battle.
Some other criteria I've found particularly useful for finding high-value markets:
Multiple businesses in the $2-10+ million revenue range. Existing sales teams who rely on advertising for leads. Growth-oriented, innovative, changing landscape. Strong competition.
Your mileage may vary but those were always good signs for me.
Once you have a shortlist of potential markets get out there and speak with business owners. Ask about their business and the marketing they are doing. Talk to them about their challenges, the impact of not addressing these challenges, and how you might be able to help.
Pitch a solution.
If enough of them buy you've validated the market.
Because unless YOU can sell something to the market then any other kind of "validation" is meaningless.
P.S. 70k revenue at the top end of a market is not a good sign. Not if you want to be billing them 50k a year or more 😉