6 Core Things That an Agency Needs Part 2 – The Niche

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In part 2 of the 6 Core Things That an Agency Needs, Joe breaks down the most important things you need to consider when picking a niche for your agency.

Despite the fact that niching down is preached throughout the agency landscape, many people either don’t work hard enough on it or completely disregard it. Joe shares the valuable lessons he learned while building and exiting multiple businesses, which will provide you with the most efficient framework for selecting a niche.

Topics Discussed

  • Joe’s past mistakes in picking a niche
  • Working with people you like
  • Long term potential earnings
  • How many customers do you need?

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Joe Troyer 0:55

All right. Alright, so first things first, when picking a niche. If you were to ask me two years ago, three years ago, even what was important when picking a niche? If you had asked me about like, am I passionate about the niche or loving the niche, I would have been like bullshit, I don't care. It's all about making money, I could care less about the vertical that I'm working in. That would have been my attitude. My My thoughts are very different. Now in my last agency, we built it really fast. And I want after too many niches. Let's just be honest, I thought that I was a really smart guy. I thought that I was limiting my liability by focusing on like Home Services as a whole. I thought that that was me being smart. But it was ultimately me giving myself a cop out. Oh, well, I'll just, I'll just focus on all of home services.

That's a good niche to start. My name is broad enough, that'll work for now. And when I find one, that's a diamond in the rough. And when it's the right one, then all 100% No problem, right. I'll just stick with that niche. Guess what happened? Didn't happen. Right? So the problem is, is that depending on how you look at it, it could have been looked at as five different niches. But when you really look at the categories and the services being offered in those niches, right, how like roofing often does siding, and windows and doors and all kinds of other shit, right? Like gutters, like, we could have eight to nine different categories that I was in, and I thought I was picking one niche, please don't shoot the bed, like I did pick one niche and stick to it.

Okay, so one niche, stick to it, period, VN. Okay. Now, with this niche, I'm not saying that you have to be passionate about the niche like folks, at the end of the day, any local business I'm not passionate about like, it just doesn't strike my fancy like that. What is important to me now looking back, and building a business that I didn't like, because of the people that we sold to, is very important to me, that I like the niche that I'm going after.

And what I mean by that is I like the people that I'm working with. And the people that I'm working with could be different depending on the niche and who I choose to target. What I mean by that is it could be a marketing director, or it could be the owner. And there's very different types of owners in different types of businesses, a chiropractor, a young chiropractor, fresh out of school, very into sports and such is very different than a roofing company potentially, like fundamentally they are different people. Or if you compare that to a dentist, right?

Fundamentally very different or a gym owner, understand they are opposite ends of the spectrum. So what I want you to think about is in 36 months from today, if you're still in that vertical, will you be happy solving that niches needs. Because as an agency owner, that is our job, our sole job is to find customers who we can help and to help them solve their marketing challenges and needs. So if you answer no to this and the niche that you're in right now you need to fix this. And at the end of the day, if you wake up in six months, like I did, and you hate the business that you built, trust me that sucks.

Take it from somebody that's been there that's done that my multiple what I exited with how I left that business was not great compared to what it could have been. I didn't get robbed or anything like that, right. But my multiple could have been much better. I could have got a much better sales price if I would have stuck with it and been in that business for and steady for at least 12 months. Okay, but the pain for me was so severe because I didn't take it serious on building a niche.

Okay. So one niche stick to it. And 36 months from today, will you still be happy serving that niches needs. Ultimately then I need to know that that niche long term can afford to pay me 3000 to $5,000 a month. Folks, this isn't going to happen overnight. This isn't going to be my rate that I'm charging somebody right out of the gate. This is long term. But some of you guys are working with like one shot florists.

They're never going to be paying you three to five grand a month, like sorry, but that's just not going to frickin happen. So let's be honest. Why would you be in a niche where you can only charge a grand or two, when you could be in a niche where you could charge three to five. You don't need near as many customers, right? And a lot of people when they think about their niche, they're like, oh my god, like, I can't go in chiropractic because it's so saturated. Like dude, at the end of the day to hit your income goals, like what do you need 10 customers, 20 customers, if you're charging these types of rates, folks, how many customers do you need?

Joe Troyer 5:56

How many do you need? If you're charging this type of rate and you have a 75% margin, which you should? How many clients do you need? Honestly, three or 410? Yeah, 10 to 23 to five, you don't need many damn customers, right? So if you're picking a niche like chiropractors and you say it's too saturated, so you don't want to go in it. Understand that your ass backwards and you are wrong. There are definitely 20 that you can attack and that you can onboard.

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