"A niche in the market is a specific area of marketing which has its own particular requirements, customers and products. " Collins English Dictionary.
What do you enjoy, what are you passionate about and where is your skill set at? Focus on where you have experience - this allows for better focus, a more targeted approach and a clearer message to clients and candidates.
A great first step is brainstorming and list making, to define your thoughts and business ideas.
What problems do your targeted customers face, what needs do they have and how can you best provide a solution? Understand the recruitment industry area you are servicing and how you can stand out in a crowd.
Once you have an initial idea you are happy with, research is essential to position yourself correctly. Utilise Google Trends, browse forums and industry sources, have one-to-one conversations amongst other strategies, to determine what is happening in the industry currently and what is expected to take place in the future. Establish what agency competitors are doing and their potential market share.
"Focusing on a niche is a tested strategy to grow and scale your agency fast." agencyanalytics.com/blog.
At the end of the day your agency idea needs to be commercially workable. You need to consider amongst other areas; demographics, location and the best way to reach clients and candidates, plus your fees and charging policies. A specialised, professional approach can sometimes allow for higher fee charging.
It is also a good idea to explore similar services offered by competitor agencies and what their charges are as a benchmark exercise.
If it is feasible to do so, test your agency idea to gauge the level of interest from both clients and candidates. This could be through a website and/or social media. Learn from initial dealings and see who aligns with you or who is attracted by your proposition. Start to build credibility, an industry voice, good customer service and a solid reputation.
Bear in mind there isn't always a perfect process for determining a niche, if you feel you have found a viable and profitable business idea that you can devote yourself to - why not go for it!