In marketing it's important to know who you're targeting so you can find them and create your brand messaging around them. In some cases the niche is in front of your eyes - in others not so much. I'm specifically thinking of B2B or freelance work - imagine a designer, or a marketing expert - how do they decide who to market to? Every single industry/company size or pretty much every business could use their services.. but how do they pick a niche to focus their efforts on, if they've been basically been working with a really wide audience and filtering on the basis of budget (like most in these industries)?
These answers analyzing revenue potential and goals are spot on.
To add to this, think of what motivates you and where you can provide a great service and also grow it.
Think back on your experience:
- Which jobs did you enjoy the most?
- Which areas of your business are most ripe for learning and innovation?
- In which jobs did you provide the most amount of impact/innovation?
And then your markets:
- Which audiences have the most spend-ability?
- Which audiences provide the most word of mouth?
Work on these sorts of questions to determine where you can make the most money, continuously grow and also enjoy your work over time.