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)?
I've found that there's good money in every industry. You just might need to dig deeper for it in some. The best way to narrow your target market is to focus on what you enjoy the most. If don't enjoy the market, you're not going to do your best work. I've turned down clients that offer services or products I have no real interest in because I know I'm not going to be able to fake my excitement about a product or a project. If you do what you enjoy, even the failures are a blessing.