This is one of a number of questions that I answered on a community for freelancers which is closing soon. I’m going to re-post my answers here, with any identifying details removed, in case they are useful to others.
I think a lot depends on what the niche is. For my industry (web development), I think there are four potential niche areas you can pick:
- Sector, e.g. financial services.
- Programming language.
- Type of work – new build, legacy systems, bespoke vs off the shelf etc.
- Mode of working – retainers, temporary contracts, one-off projects.
My thoughts on specialising for each one:
Sector: This can work if the sector is big enough and that sector is open to freelancers. For example, I found I couldn’t specialise in insurance systems – even though I have insurance expertise – because that sector doesn’t seem to outsource work to freelancers. However, if I was a copywriter I think I could specialise in insurance or financial services and get enough work to make it worthwhile.
Programming language: You have to specialise in a programming language – no one knows more than two or three well enough to be paid for it (the few exceptions are usually hired full time by somewhere like Google). I’m not sure it’s really a niche though, as most languages have a huge install base – it’s a bit like saying my niche is speaking English.
Type of work: I think this is worthwhile. I get a fair amount of work because I specialise in bespoke and legacy systems. There’s a lot of them around, and many people don’t want to work in this area because they’d rather play with shiny new things.
Mode of working: I think this is also worthwhile. Most people don’t seem to offer retainer agreements for what I do, so I pick up that work relatively easily and it provides a stable income. However, I probably earn a bit less than people who are prepared to jump from one three month contract to another.
So I think niches can work, but only if you choose them very carefully and they make sense. Specialising in a programming language is essential, but a sector niche may not be.