A lot of freelancers choose a niche.
Some think there’s no better way to approach the business.
They think you should develop a reputation in one area, and once you do, they can market themselves as an authority and command attractive rates.
But if you ask me should freelancers choose a niche, my answer is No!
Financial experts constantly warn against putting all your eggs in one basket. When you restrict yourself to a niche that’s exactly what you’re doing.
When your work is concentrated in one area, your livelihood is dependent on that one area.
And not only can that limit you financially, but it can break you, completely.
A Niche’s Limitations
When you look at the most successful companies and professionals, you’ll find that most diversify.
Apple doesn’t only sell phones. Amazon doesn’t only sell books. Both sell a range of products and offer a variety of services.
Likewise, the executives for one company commonly sit on the board of others. And those board positions are often in different areas of business.
So, when you have versatile skills, such as writing, photography, or graphic design, it’s not smart to limit yourself to a niche.
That’s just not in your best interest.
When more lucrative opportunities come along than those in your niche, and you have the ability to cash in on them, I can’t see the logic in limiting yourself to a lower-paying or stagnant market for the sake of sticking to your niche.
Even if opportunities arise that pay equally as well as your niche, if you have the time and skill to make extra money, I can’t see turning your back because it’s work outside of your niche.
I don’t believe in unnecessary earning caps. And that’s what happens when freelancers choose a niche.
A Niche Is Risky
In addition to limiting your income, a niche can create a personal finance crisis.
Remember the Great Recession of 2007-08? Remember how the housing market collapsed?
Think of all the niche markets that were affected.
What do you think happened to freelance writers whose niche was real estate?
Don’t strain your brain. I’ll tell you because I was affected and have vivid memories of that time.
A lot freelance writers found themselves suddenly out of work and struggling.
Normally, those in niches such as real estate could have transitioned to related areas, such as construction, building materials, and interior design.
But those were also a no-go because all of them were affected by the downturn too.
Companies in all of those sectors stopped doling out ad money, which funds a lot of freelance writing budgets.
Companies in those sectors stopped investing in content marketing.
They maxed out their credit and couldn’t get anymore.
A lot of freelance budgets evaporated.
And the thing about freelance clients is they will see financial problems coming, but many aren’t going to tell you. They’ll allow you to keep working like it’s business as usual until they just can’t hang on anymore.
Then, they’ll abruptly announce they won’t be using your services anymore, wiping out your revenue stream.
Related: The Reminder From Losing A Major Client
Worse, some freelance clients will rack up debt knowing they can’t pay it. But until you figure that out, they’ll keep assigning you work and accepting your submissions.
When one client has financial problems but you have others, you have a good chance of staying afloat. But when you’re a niche freelancer and your entire sector is in a slump, you’re in trouble.
Many segments of the economy are a lot more volatile than people realize. And if you don’t follow financial news, you may not know about the down cycles for your niche until it’s at a dire point.
If you are going to select a niche, I strongly recommend that you investigate that sector’s financials first. And keep a watch on them.
You may think you’re making a safe choice with something that seems evergreen like parenting, fashion, or journalism. But pay close attention to where those “safe” niches get the majority of their revenue.
What To Do Instead
I believe it’s too risky for freelancers to choose a niche. Not to mention that it’s an unnecessary risk.
I suggest a hybrid approach.
Develop a specialty, an area where you build your knowledge and devote 60%, 70%, or 80% of your focus.
You can still develop a reputation as an authority and command a premium for it.
But devote the remaining 20% to 40% of your work to one or more areas that aren’t directly linked to that niche.
You don’t have to publicize this other work on your resume, website or in your portfolio if you don’t want to. But if the market ever tightens for your niche, you’ll have this other experience, the income and hopefully some solid contacts that allow you to ramp-up production in your backup field until your niche market recovers.