When it comes to marketing our small businesses, we’re always being told how important it is to speak to our ideal clients. In fact, not only is there the pressure to find your ideal client, there’s also the age-old debate of whether or not you should find a niche.

But especially when you’re just starting out, it can be really hard to identify who your ideal client is. And if you do decide to niche, how do you go about choosing your area of specialisation?

When freelancers and small business owners don’t have a ready-made niche, it’s usually experience and working with clients that enables you to decide who you’d like to work with and what you’d like to work on moving forwards.

That said, one thing that can help you to narrow down your options and reach a conclusion that little bit faster is having an income goal. So in this post, I’m going to explain how an income goal can help you identify your ideal customer (and potentially the niche they’re in!).

Why is it important to have an income goal?

Many freelancers and small business owners think that having an income goal takes them straight back into the corporate world, which they left for a reason. They think it makes things all about monetary gain, hitting targets and being profitable - essentially pressure you could do without, particularly when these aren’t the reasons why you started your own business.

However, having an income goal can be really useful in offering you guidance and giving your business direction.

When I talk about having an income goal, what I mean is having a concrete figure in mind that will enable you to cover your expenses, pay into a pension, invest in your business, and earn a decent living so you can do all the things you want to do. I’m talking about making sure you’re looking after future you while also living in a way that allows you to fulfil your lifestyle goals, whether that involves going on holiday, having a gym membership, eating out regularly, or fully developing one of your hobbies. We’re talking about a number that not only reflects what you’d like your business to look like but what you’d like your life to look like.

It’s really important to attach concrete numbers to these considerations because, by doing so, you can make sure you’re charging (and therefore earning) enough. Once you have a final annual figure in mind that you need to be making in order to do all the above, you can break it down into months, weeks and days, as far as the hours you spend on paid client work.

How to identify your ideal customer using your income goal

Breaking your income goal down as far as your paid hours is what will enable you to come up with your hourly rate. This is the method I teach in Charge with Confidence, and it allows you to set an hourly rate that ensures you’re making enough money to cover all your expenses and still earn a decent living in the number of hours you want to work per week.

The important thing to realise is that if you don’t make sure you’re charging enough per hour, the only way you’ll be able to hit your income goal, i.e. earn enough money to live the way you want to, is by working extra hours. It’s therefore thanks to your income goal that you’re able to understand the minimum you need to be making per hour.

But how does this help you identify your ideal client and/or niche? Well, if you know you need to be making a considerable amount of money per paid hour worked, it makes sense to target those clients who can generally afford to pay you that amount per hour.

Let’s take a look at a couple of examples.

Example 1 - The geographical budget split

Let’s imagine you currently work with clients in two main geographical areas. In one of these areas, you’ve noticed that clients often try to negotiate on price. Working with them means that you’d often have to end up charging less than the hourly rate resulting from your income goal.

In the other geographical area, however, you’ve seen that clients never seem to negotiate, and you get the impression you could even ask for more.

In this case, it makes sense to focus all your marketing efforts on the second area and make your ideal client someone who is located there.

Marie’s case study is a great example of how having an income goal and understanding your minimum hourly rate can help you identify the kind of customers you’d like to attract moving forwards. Having seen that many French-speaking clients were unable or unwilling to pay her minimum rate, she developed a business strategy that targeted customers based in the US instead.

Example 2 - The client who takes up more or less of your time

Perhaps you find yourself in a situation where you really enjoy providing your services to both private individuals and agencies. If you work in translation, for example, you might be supporting foreign residents in your area with local bureaucracy while also working with translation agencies.

However, let’s imagine that although you love working with private individuals, the work you do for them takes up a lot of your time, and as a general rule, they are reluctant to pay that much for it.

The translation agencies, on the other hand, are easy and efficient to work with. They enable you to reach/exceed your minimum hourly rate, and therefore your income goal.

In this case, your ideal client should definitely be the agency rather than the individual.

These are just a couple of examples, but you can see how these considerations could work for a variety of situations, including when deciding your niche. Is there a specific niche you could specialise in that requires a high level of expertise for which you could be commanding an equivalently high rate?

Being clear on the numbers in your business and having an income goal can make some of the difficult decisions for you when it comes to targeting an ideal client and choosing a niche. If a client or niche you’re considering marketing to can’t pay your rates, it makes sense to remove them from the equation immediately and focus your efforts on those who can.

I hope you’ve found this blog post useful and that I’ve managed to convince you of the benefits of having an income goal on which to base your strategy. If you’d like help to set an income goal for your business and identify your ideal client based on both the numbers and your long-term vision, I’ll take you through all the necessary steps and more as part of my Charge with Confidence programme!

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