You want to start your online business and you don’t know how to find the right niche? Don’t worry my friend! I got you covered.
This blog post is all about finding the right niche you can tackle with your online business. You’ll learn what exactly makes a niche and how to identify a good one. I’ll show you the process of finding your niche and in the end, suggest on how to know if it’s the right choice.
A niche is a subset of a larger market.
An example of a market would be the online dating industry. Online dating industry generates several billion dollars in revenue per year. And that’s only in the US.
So, how can you as a freelancer, solopreneur, or a small business compete with the big guys? Well, odds are you can’t. Because you likely don’t have the resources to challenge them.
That’s why you need to find (or create) a smaller part of that market—a segment—, where you can have a better chance of success.
To drill down on the online dating industry, an example of a niche could be “online dating for seniors”, or “online dating for seniors from New York”. The further you go and the more specific you get, the higher the chances you’ll own that niche.
Of course, considering there is still a market for it.
Remember—It’s better to be a huge fish in a small pound than a tiny fish in a big pound.
A good niche is neither too broad or too narrow.
Consider the market size, existing demand and potential competitors that already entered your niche.
When choosing you should also consider the lifespan.
Short-term niches have a limited lifespan. For example, products that create a buzz for one summer. Or products that are only interesting during a certain time of the year—for instance, during the holiday season.
Long-term niches have, of course, a long lifespan. Products in evergreen niches sell regardless of what’s popular.
In my experience, the best niches are usually connected to emotion, some serious issues (such as health), or are urgent.
When people are emotionally connected, are passionate, or get a great pleasure from the products or services, the likelihood of turning them into loyal customers is far greater.
The same goes for urgency. When you offer a quick solution, you are more likely to sell your products or services.
It would be hard to pick the right niche just off the top of your head. That’s why I’ve written this 7 straightforward steps.
Dedicate to each step at least 10-15 minutes and I bet as soon as you’ve reached the end, you’ll have at least one or two niches for your online business.
Identify the talents and things you’re good at. Be honest. See the difference between the skills you have and the skills you wish you had. Ask your friends and family for help. Compare self-evaluation with the input from others and look for overlaps.
What do you enjoy doing most?
Take a deep look into yourself and try to identify what makes your heart sing. What are the things you do in your life (or did in the past) that you just love doing? Think about your hobbies, about how you spend your free time and your off days.
When your heart and your brain are not in the same place, it’s hard to stay focused, motivated and, in the end, successful.
With whom do you want to do business?
Pay attention. At this point, I’m not talking about determining your target audience. I want you to ask yourself, with what type of people would you enjoy or be willing to work with?
Be specific. There’s no point in entering an “online dating for seniors” niche if you find yourself hating to work with seniors.
What are the things that frustrate you in your daily life? What do you hear you family and friends complaining?
Think about the skills you’ve listed earlier and mark the ones you think people need.
At this point a little bit of researching is necessary.
Check for information on sites that offer demographic data, such as CityTownInfo. Search on sites that track recent trends such as Google Trends, Trend Hunter or Trend Watching. Look at the “trending” pages on eBay or Amazon. Don’t forget to search online communities such as Reddit.
You need to determine the exact target audience. You can’t be all things to all people. Get as specific as you can. Focus on their characteristics, personal traits, wishes, needs, and lifestyle.
Determining your exact target customer is important as it will help you better understand his needs and create a valuable product.
Only go after the needs people will pay money for. Ask yourself the question, what are people willing to pay for?
This may sound ridiculously obvious, but a lot of people get stuck on an idea for the wrong reasons. If your mom is willing to pay, it doesn’t mean anyone else will.
In the end, demand is what spins the wheels. Niches, where people are already spending money, indicate a strong demand. Likewise, if no one ever tackled a certain niche, it’s usually because there’s no demand.
And, don’t forget to always think about what is scalable and what is not.
Even when you find the niche you’re sure that will work for you, it would be foolish to go all-in. I always recommend to start small and build your way up.
Follow the lean approach. Create a minimum viable product, test it out and build on what you learn. When you’ve reached the point you’re almost certain everything is right—then you can go all in.
Sometimes a simple landing page is enough. Spend some cash on Google or Facebook ads and carefully study the first visitors that come to your site. Those first impressions can be crucial for further development of your idea.
I hope this post has got you all excited and you’re raring to start finding the right niche for your online business.
Going through the whole framework shouldn’t take you more than 60 to 90 minutes. It depends, though, if you include other people in your process, it may take longer. It could also take less than 30 minutes.
Both ways are totally fine, as long as at the end you’re satisfied with your choice. Take the time you need, but avoid “analysis paralysis”.
I’d appreciate if you write your outcome of the process of finding your niche in the comments. Thanks!