---
id: "framework-niche-selection-rubric"
type: "framework"
source_timestamps: ["00:16:18", "00:16:50"]
tags: ["niche-selection", "agency-scaling"]
related: ["concept-lazy-niche-strategy", "entity-claude", "entity-gym-members-now"]
steps: ["Proof of Concept: Are other agencies currently making money serving this industry?", "Total Addressable Market (TAM): Are there at least 10,000 prospective businesses in this niche?", "High Ticket: Does the business sell an expensive product or have a high lifetime value (LTV) per customer?", "Growing Market: Is the industry expanding rather than declining?"]
---
# 4-Criteria Niche Selection Rubric

## Purpose

A four-point checklist used to evaluate whether a specific industry is viable for building a scalable AI automation agency under the [[concept-lazy-niche-strategy]]. JP recommends running candidate niches through this rubric using [[entity-claude]] as an evaluator.

## The Four Criteria

1. **Proof of Concept** — Are other agencies currently making money serving this industry? If yes, the demand is real and the offer is sellable.
2. **Total Addressable Market (TAM)** — Are there at least **10,000 prospective businesses** in the niche? Below this, ceiling risk is too high.
3. **High Ticket / High LTV** — Does the business sell an expensive product, or does each customer have a high lifetime value? Margin must support a meaningful agency retainer.
4. **Growing Market** — Is the industry **expanding** rather than declining? Don't tie your agency to a sunset industry.

## Worked Example

[[entity-gym-members-now|GymMembersNow]] — the gym/fitness franchise niche — passes all four:

1. Multiple other agencies already monetize the gym vertical.
2. Far more than 10,000 gyms in the US.
3. Gym memberships compound monthly recurring revenue → high LTV.
4. Health and fitness as a category continues growing.

## Usage Pattern

Feed each candidate niche into [[entity-claude]] with the four criteria as a rubric prompt; rank candidates; pick the best one; then layer [[concept-franchise-owner-targeting]] on top.