89. I Found My Niche! (Real World!)

Foreign.

I don't know about you, but I'm sick and tired of hearing all these business gurus talk about the importance of finding a niche. You got Alex Hormozi over here talking about, you better figure it out or I'm going to come down there and niche slap you. I think for fractional CFOs, this is doubly frustrating because there's nobody talking about the process to go through to actually identify what your niche could be, when or should be. Niche, niche, no, niche, niche. It's one of those two. Anyway, I'm so excited to share this episode with you because I'm having a conversation with Erin Fox. Erin is one of my coaching clients who's been struggling for over a year to figure out who her niche could be. So if you're a fractional CFO and you know that you probably need to identify a niche, but you're struggling to figure it out what it actually is, this episode's for you. Let's dive in.

So if I was to look at the who, what, when, where, why and how to be a fractional cfo, I feel like I've got everything covered except the who. And this has been a problem for me for like two years. I've gone to lots of different things, like, to hone in on who this person is or who I want my ideal client to be. I can't just ever pick one. I've always just been, like, looking for a certain business owner, not a certain industry. And I want to get down to a certain industry because I want to have that more niche where it's like, I'm the expert in this and people are going to come to me for that. I don't want to be. Be just like, oh, she's great at everything. I'm at the point where I'm like, I need to jump off the ledge and start reaching out to people and getting out there. And I've come to the point where I feel like I'm just scared to do it because I've been miserable for so long. I'm afraid I'm just going to cause myself to be miserable again by getting clients that I don't want.

That's real and that's. That's all fair. I totally feel you and hear you. A lot of those same internal and external dialogues have happened with me, too, over the years. You kind of alluded to what I'm going to ask you next, but let me make sure I'm following. So your worry is you pick a niche you don't like it and tell me, like, what's the outcome of that?

That I feel like I'm going to start over again. I think my biggest fear is because I've always done retail, like they've always had a brick and mortar, they've always sold something and I want to get out of that. So I don't feel like I'm going to be able to serve clients well in a different industry.

Lots to unpack here, so stick with me. What's the, like, the legitimate, the worst case scenario? Let's. Let's say you pick. What was the video I did the other day? Vegan food manufacturing is your niche. I think that was on one of my recent YouTube videos. Let's say you pick vegan food manufacturing is your niche. What's like the worst case scenario? You try that for a year and then like, legitimately, what would the worst case scenario be?

I decided I don't want those clients anymore.

That sounds a lot like where you're at today. You don't have a niche. You're not super thrilled about it, and you're back where you started. Right. So you're literally living your worst case scenario right now. You see my point, though? I say it a little tongue in cheek, but literally you're living your worst case scenario right now. And so it's all upside. I'll hit on this one a minute. You got to stay loyal to it. Don't just get into it for a month or four months or six months and say, ah, suck at it. I'm not going to do that. Like, you're going to have to commit to it for a year or more. But you get out the other end of it and now you've got one industry more you can cross off the list. Okay. Retail wasn't it. And we know it's not vegan food manufacturing. You're one step closer to the answer. And I'm like, you literally have nothing to lose by just picking something and going with it, I think.

But now I'm like, what do I pick? How do I decide what to pick? There's so much out there.

I'm not done on the mindset stuff yet. Okay, I got one more thing for you. You're worried that you're not going to be. What was the word? Use? An expert at it.

Yeah.

So remember this, you don't have to be an expert at it, Aaron. You've just got to be better at it than your clients.

Maybe that's the thing. I know the finance, but I don't know anything about running their business in that industry.

Do you know about financial metrics?

Yeah.

Probably know more than most of them. Do you know how to read financial statements? Yeah, financial statements. You know more than most of them. Do you know how to do forecasts and projections? Do you know how to logically think through how much cash a business needs based on what you can see?

Yes, but if I was. Hold on.

So you've got the core skills that you need, the perspectives. Now there's some universal perspectives you have that you already have that will apply to almost any industry, if not every industry. And there's just some things it doesn't matter, you know, cash flow forecasting, important goal setting, important fundamentals, and finance important. You already have some perspectives that are universal or nearly universal that you can apply. It's not like you're starting from day one of undergraduates when you were useless as a professional. You have perspectives today. Do you have all of the perspectives that are needed in that industry? No. All you need is more than what they have. You don't have to be an expert. You don't have to be the best. In fact, Aaron, if we're being real, you don't even have to be good. You just need to be better enough than they are that you can move them forward.

Okay, I don't have to follow all the answers. They have the answers. I just have to be able to ask the questions, right?

More or less.

Okay.

For real. Okay. Or you're like. I feel like you're not really like, okay, you're like, I hear you, Mike, but I'm not buying it fully just yet.

I feel like if I have to go find out where are my ideal clients hanging out, then I have to know a little bit more about who I'm trying to find.

So.

So if I just say people who offer a service, like I have to narrow that down, right? I can't just say service. And that's where I think I'm getting stuck.

Well, let's, in fact, let's back up. What do you not like about retail? Why is retail a hard note? Let's find, let's see. Find some things you didn't like about retail, some things you did like about retail. And let's see if that can inform a service based industry that maybe is at least mildly interesting. I don't know if we'll, if anything will come from this exercise, but let's go for it. So what did you not like about retail? I can guess some things, but I'm sure you've already got some battle wounds that are trigger points for you. What, what was ret sell for you? That was icky.

Inventory churn. And they're all their cash is tied up in inventory and it's like they're just constantly spending money on stuff that's just sitting there.

Oh, did you say inventory turns or churn?

Yeah, inventory turn.

Okay, so inventory, no good. What else?

I feel like with the service you can sell it a lot easier versus a product. A lot of times it's commodity. And I feel like with the service, like doing that for a reason. I feel like the why is stronger with the service based company.

Okay, so would we say that we want to find a service based company that has a non commoditized value associated with it? I'll give you an example. Most plumbers are commodities, right? I need my toilet fixed. Whoever can fix that the fastest or the cheapest is my guy or my girl. What are some services that are non commoditized? Maybe lawyers are non commoditized. Let's see, what are some other non commodity services? Architecture. Non commodity. Engineering, design. Non commodity. Ooh, here's another one. Fire suppression. I've hired companies that come in and put sprinklers in. You don't know this, but I was a fire marshal at one time in my life. And so I had to hire invent the companies that came in and installed and did maintenance on sprinkler systems. Not a commodity service. Do you know what an MSP is? It's managed service provider. It's like the, the, the cool kids term for IT companies. So there's a bunch of those that we could look at that are non commodity, low or no inventory. This is going to sound ridiculous, but the more I think about fire suppression, the more I'm like, oh no, I guarantee you nobody's going after that market. That's like the most abstract thing I've pulled out of my tail in a long time. So there's a bunch of those. Like do any of those maybe resonate with you? You know, and think about the personalities that typically would do those jobs. Let's think about like law engineer, slash architects. Normally very fact driven, punctual, data driven, no screwing around. They're, you know, I don't want to overly generalize entire industries, you know, but stereotypes exist for a reason. They're not going to typically be joking around as much, you know, maybe. And so does that speak to you? Now take as an example, she was working with like coaches and like all these different Musicians and stuff. And we get on coaching calls and she's like, I'm miserable. They're just with the ideas. And I said, well, you always like it when you tell me about your attorney clients. And she's like, yeah, because they're always on time. They always have their together. I don't ever have to wait for stuff. Like, they value my time. And I'm like, why are you messing around with musicians? They're the polar opposite of attorneys. Why didn't I realize that? And so now, like, she just goes after attorneys. So she's just. We're thinking about these kind of questions and that's how she got there.

I mean, I don't think I've ever been so stuck on something for this long.

Just pick one. You want to go. Crazy niche. Here's a crazy niche. Female fire suppression companies, CEOs, they exist. And it's a male. That is a heavily male dominated industry. And if not only are you the fractional CFO for that industry, but you also only work with the ladies, you already stand out. Fractional cfo, but women that own fire suppression companies, I don't know how big the addressable market is for that. There might be four, I don't know. But I know at least one because I know her. Or you could go, I know this exists because I've got a client in this world, female owned IT companies, and there's a billion IT companies out there. And maybe you don't want to go with the female route. I'm just giving you some ideas to spark other ideas. But you know, you go go that route if you wanted to, because again, that's a very heavily male dominated industry. The female CEOs already stand out, you know, and most of them are just like bulldog ass kickers. And so it's not, it's not hard to find them because they're out there and they're loud. Maybe that's your jam. I don't know.

Let me ask you this. How did you get into moving companies? Because to me, I feel like that's like totally random.

Go back to like what I was talking about earlier this week on the marketing thing and like find audiences where you can stand on someone else's shoulders. So true story on how this is like fate, like rom com fate. I'm in Brendan Burchard's Mastermind and we do breakout sessions one day and so there's like, I don't know, a group of four or five of us, and I'm watching this guy talk in the Window in the background. I'm like, I know that highway. And so I met. I was like, hey, are you in Dallas? And he said, yes. Are you at the corner of 6, 35 and 75? He's oh, how do you know that? And I was like, my church is across the parking lot from you. I see that at the same intersection every time I go to church. And we became friends. And it just so happens that he's built and sold two eight figure moving companies and now he coaches moving companies on how to do the same thing. And he's not a finance guy. And so he said, hey, you want to come and be my finance guy? And I said, yeah, let me be your finance guy. Done. That fell in my lap. Like, I could probably join a hundred masterminds and that never happen again, you know, but you look for those opportunities. Look for them. And in fact, he didn't ask me if I wanted to come and talk. I asked him if I could come and talk. And he was like, oh, yeah, cool, do that. The guy that I had a couple years ago sucked. He was so boring. It was like, I know, I don't know who your guy was, but I know most of them suck and most of them are boring. And so now I'm back for round two. And we just signed a $15 million client from, from one of his leads on Monday. Just pick it. I don't know about the moving industry. I, for most of my life, diy, my own moves, just hired movers for the first time in the last couple of years. I know about the moving industry. I know way more than the, the moving industry CEOs do, though. There's leveling up and learning the industry and the seasonality and the fact that, gosh, 80% of them go neck deep in debt on Facebook ads and Google that ads. And that's like one of the biggest things that kills that entire industry. And oh my gosh, the seasonality and oh, interest rates are going up. And so home buying is going down. And so moving is going down and fewer people are moving into office buildings because of the work from home movement and all the things. And there's all these things going on in the industry. We've been messing with moving for a year. I've already, I'm already probably one of the best subject matter experts in the moving industry with finances. And I don't even personally have any clients, right. And so I'm like just being around it. I learned. And so like, if you're in the weeds, Aaron, you're going to learn this stuff real, real fast. It's not rocket science.

All right, well, that gives me some things to go on. I haven't picked it, but I definitely.

Feel female moving company owners. If, again, if you want to go that route, it could be any, like, east coast moving companies, North Jersey moving companies, you know, South Florida moving companies. I'm the fractional CFO for Midwest moving companies. I understand the market in the South, Midwest or whatever, or anybody else. Just pick a thing. It doesn't matter. You're inside your own head, though. You're too much in your own way. And I'm like, just pick something, okay? And then. And then stay loyal to it.

What businesses are out there making, like, the impacts that I think are cool or interested in? I feel like even just listing all of these, I'm like, well, what necessarily are they doing? Like, what impact are they?

What impact gets you excited? Like, what, What's. What are some outcomes or impacts that you're like, oh, heck yeah.

Like, I think locally a lot, like, because I'm in Kansas City, like the Midwest culture kind of thing, like, community is the big thing. So, like, the companies that I really like working with right now are the ones that are like, in my community and are out there doing things in their community.

Like what?

Just like, bringing people together for a good time and not necessarily, like, huge impacts on, like, poverty or like anything like that.

What's an example of a company that you can think of that's doing that?

Other than the ones that I have?

Even the ones you have? I don't know the ones you have. Sorry.

A whiskey distillery.

Cool. Lots of those.

I mean, I thought about that. Like the whole craft industry of, like, love that. There's a ton.

What holds you back from that? That's. That's an awesome, super booming industry from what I understand, and I'm not an expert in it. Margins are tough a lot of times, which is why a lot of them collaborate on, like, bottling and canning and stuff. I don't know what the right word is, but, boy, what a fun industry that is.

It's hard for me to think about the ones that are doing really well. Like, where do they exist? I don't know. I thought about that one. That was the only thing I thought about is going down the distillery route because I have the most experience with that at this point.

What are they called other than distilleries? Is there like another name for that industry?

No, I mean, they're really distilleries because you can have Vodka, gin, whatever else. But a lot of them have, like, parlors, too, or. Yeah, like the craft brewery. A lot of breweries.

Fortune has it. Are you ready? The third annual Kansas City Whiskey Expo is happening November 4th at Harrah's.

No way.

I'm looking at the website right now. It's a great website. 1, 2, 3, 4, 5, 6, 7, 8, 9, 10. There's around 30 distilleries that are listed on their vendors page.

And my client is, like, the president of the, like, Missouri Distillers Guild or something like that.

What? You're sitting on this goldmine. I'm telling you about fine people. You can stand on the shoulders of their shoulders and leverage their audience, and you're sitting on this gold mine over here. Not even going to bring it up.

It didn't occur to me. Like, I'm just like. I don't know. I feel like I did have an aha moment there, though. So I feel like.

It feels like, slap me in the.

Face and just say, I'm going with distilleries. Whiskey distilleries.

If that was what you want to do, I think it's great. You said your client is the president of that guild?

Yeah. So there's a company called Jay Rieger that is, like, largely famous in our area. And yeah, he just became like, one of their board people.

So, I mean, what a great opportunity. How long have you been working with him?

Uh, two years.

So you've got cred in relationship.

I first took on this client, I knew nothing about whiskey distilleries. Right. So when I was researching, like, for financial stuff for whiskey distilleries, like, there's nothing. There's like a couple of guys that talk about cost accounting, but, like, that was it. Like, there's no fractional CFO for whiskey distilleries. And now that I say that, I feel really dumb that I didn't think of that earlier.

If I had a dollar for every time this week I had said those exact words. Not about you, about me. I'd be like a $10 error or something. I've said it like a dozen times. To be going, how in the world did I not think about that? I feel dumb saying what I'm saying right now because I didn't even think about it. I love this for you, Aaron. I see the smile on your face right now. I can feel the vibes and the energy, and I'm like, this is it. This is the thing.

Yeah. I mean, that's a big thing. There's breweries popping up everywhere.

Now networking and collaboration brings us together. All right, my friends, I hope you found that interview to be helpful. I hope you're able to use it as inspiration and direction for figuring out who you're niche might be. I can't wait to see you back here next week. I'll see you there.