How To Find A Niche For Your Business
One of the most complex decisions to make for many entrepreneurs starting a business is deciding which specific area they want to help people.
There are two definitions of niche:
- “A comfortable or suitable position in life or environment.”
- “A specialized segment of the market for a particular kind of product or service.”
I like both of these definitions. They seem like they go together and compliment each other. Almost like we should strive to achieve both of those definitions when running a business. The second definition comes first, though, and the first definition is what we are all striving to achieve as entrepreneurs.
First, we find a specialized segment of a market for our particular product or service; then, we find ourselves in a comfortable and suitable position in life once we are successful at that business.
I like that.
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For myself, I am trying to become a (successful) full-time writer, so I will eventually need a niche if I want to gain a large following (target audience) and position myself as an ‘expert’ in a particular field.
Right now, I am writing about whatever strikes my fancy or about something that catches my interest. Unfortunately, I am interested in many things, lots of ideas strike my fancy, and I feel like I could write about all of them. However, this is practice is extremely time-consuming as I have to research whichever topic I have chosen to write.
Most likely, if I am to be a successful writer, I need to become an expert in my chosen niche. If I do this, I can go deeper than surface-level research on my chosen topic. I will write and write on my topic repeatedly and become more profound and more insightful each time.
Most businesses are in this same situation, at least when they start — they want to be the biggest, but they have to start small and work up. Microsoft and Apple didn’t start out trying to conquer the office, music, gaming, and wearables industries; they started out trying to make a personal computer and nothing more. They focused on one thing, conquered that, and then expanded. Sounds easy, right? L!O!L!
The point is, this is the model that we can follow: focus on an underrepresented area in your field whose customers have underserved or unmet needs and fulfil them, then conquer more aspects as you grow.
Let’s not put the cart in front of the horse, though. First things first: how do we find a niche, and how do we know the right one to get to that eutopic first definition of a comfortable position in life?
Determine Your Niche
What are your passions, interests, and skills?
- If you are going to be selling and working in your niche for years, it needs to be something that you are passionate about and in which you can stay interested and ardent.
Is there a market for your niche?
- Figuring out your passion is fantastic, but it’s only half the battle. Maybe you have a love for making stuffed animals out of sandpaper. While you might have figured out your passion, that doesn’t mean there is a niche market for your what you’re selling. You will need to do some research to see if people will buy what you’re selling. Google Keyword Planner can help here.
Is my niche, niche enough?
- Your niche could still be too broad to attract a specific enough audience. After using the Keyword Planner, you will see not only if your niche idea is too small but also if it is too big. If so, dig deeper and see if you can find a more particular area on which to focus. For example, clothes for men → clothes for large men → well-made clothes for large men.
Who are your customers?
- Your customers should be easily identifiable, easily accessible, and are in a potentially large, or underserved or neglected market.
Who is your competition?
- It would be great if you had a truly unique idea and you would be the only supplier of your product, but that dream scenario is unlikely. Most likely, there will be some competition in your niche, but hopefully not too much — a sweet spot. You will need to research your competition and evaluate if there is a place for you.
How do I analyze my competition?
- Search the internet using keywords about your niche idea. Make a spreadsheet of the sites you find that are close to or match your niche. Is there a way to stand out from the competition, perhaps in terms of quality, transparency, price, authenticity, or a lack of paid advertising? If there is, there might be a place for you.
Now that you have answered the essential questions, you should have a good idea if you have found a profitable niche or not; if you have, congratulations! You’re on your way to potentially having a profitable business. If you still aren’t sure if you have a niche, go back to the beginning and try again.
You will want to be as sure as possible, but if not, that’s ok because the next step is to test your niche. This will give you some concrete data as to whether your idea is viable or not.
Test Your Niche
The next step is to try out your idea on a small scale before committing fully. The last thing you want to do is spend a ton of money and jump into a business that might be doomed before it starts.
You’ll want to test your business as much as you can in real-time as inexpensively as possible to see if you’re on the right track.
How to test your niche
Create a landing page for your niche idea.
- Making an entire website is costly and time-consuming. Using a service like Leadpages or Google Sites can give you an inexpensive or even free way to evaluate your potential market. Here is a list of landing page sites.
Drive traffic to your landing page with paid advertising.
- Paid advertising is relatively inexpensive, especially for the short time frame in which you are testing. Google AdWords is the best way to drive traffic.
- You can also send out surveys to get direct information from your target market. Google Surveys or another free survey service can help you. Place your survey and promote it in areas within your niche such as Facebook Groups, tagged in social media, or guest blogging on posts in your field.
A/B test everything you can think of.
According to Optimizely, A/B testing (also known as split testing or bucket testing) is a method of comparing two versions of a web page or an app against each other to see which one performs better.
Testing whether or not your niche has value is an essential first step on your business journey. Just because your first landing page doesn’t gain traction doesn’t mean your niche won’t work. There are many reasons and variables why someone didn’t click on your page, and it’s your job to figure out what those reasons are.
Remember:
- You might not get many (or any) pre-sales for your product or service, but that doesn’t mean your niche isn’t viable. You see if your product or service can get hits, likes, views, etc., any way you can. You need to test, retest, and test some more.
- Trying one message, idea, price, colour, etc., against another will give you data on if you have a profitable niche to get into and, eventually, the best way to promote your product.
- Testing can be a slow and arduous process, but it is arguably the most important one.
Final Thoughts
These steps are by no means a guarantee that your business idea will work. However, they will get your creative juices flowing and spark ideas on how to proceed (or not) with finding and harnessing a profitable niche.
Once you have found your niche, you can start making a business plan, a marketing plan, creating a blog, and developing a fully functioning website to scale your business.
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