“Many people talk about ‘finding’ an ideal niche as if it were something under a rock or at the end of the rainbow, ready-made. That’s nonsense”. Lynda Falkenstein, author of Nichecraft: Using Your Specialness to Focus Your Business, Corner Your Market and Make Customers Seek You Out, highlights how ideal niches don’t just fall into your lap, they must be carefully crafted.
To define your niche market start by asking yourself the following questions:
What are your interests and passions?
How can you combine your passions with your skills?
What are your targeted market problems or needs?
What are your potential competitors doing?
Is this niche profitable?
Define your passions and skills
Your ideal niche needs to be related to something you are passionate about. You will have to look into your interests and find something you will be willing to spend time on, also in your free time.
Starting a business requires an incredible amount of effort. And if your target market is not strictly related to something you are passionate about you will not find the the motivation to spend all the time needed on your project.
Drafting a list of your passions is just the first step. Then you have to go through your skills and find something you would get paid for by one of the possible niches you defined by listing your interests.
Evaluate your ideal niche problems and needs
To narrow down your list even more try to define which problem your service will solve for your niche. Is there any uncovered need in your target market?
Analyzing this aspect will also help you determine a more specific and high-quality service. Every service should serve a well-defined issue clients are experiencing and that they can’t face alone. By selecting a specific service you can in time get more experienced and specialized.
Research the competitors
Before investing time, energy and money in developing a brand new business, you should research your potential competitor.
How many businesses am I competing with?
What are they offering?
How do I set myself apart from them?
What is different about the services or products that I offer?
What are the “extras” that I offer to the target market?
Below are a few tools that can help you with your competitive research.
Use these tools to explore best-selling products consumers, keyword and what your niche is researching.
Determine the profitability of your niche
“Everyone is not your customer.” – Seth Godin.
The author of This is Marketing: You Can’t Be Seen Until You Learn To See states that the tendency most of the entrepreneurs have to consider everyone as their customer is counterintuitive. Narrowing your target market gives you higher earning potential.
If your target audience is highly specific your marketing messaging is going to be on point because you know exactly who your customers are and what problem you solve for them. This means you will get an extremely better return on your marketing investment.
There are a few factors to consider when analyzing the profitability of your niche:
When researching, if you find a fair number of similar products or services, but not an excess of them, it means there is a market for your idea. Take a look at the price points of your competitors’ to define how to better position your offering. Consider the buying power of the demographic segment you are planning to target.
Test your idea
The only way to know if you are on the right track is by testing the market in real-time, based on the research you have done so far.
One way to validate your target market is to survey your niche. Promote your survey in industry-related groups on social media, via Google surveys or through a list of contacts you already have.
Another way is to create a landing page that promotes a free info product related to your niche. This is easy using a tool like Leadpages, AWeber or Mailchimp, so that you don’t have to create an entire website, while you’re still in the testing phase.
Drive traffic to the landing page using AdWords. This will allow you to test how much interest there actually is around your product or service in your target market. Consider that if you are getting lots of traffic, but not many conversions the issue is more likely to be with your landing page design and copy. The niche showed an initial interest if landed on your product/service page, but you missed a chance to generate a new lead.
Based on what you gained from the testing phase, you should now be ready to start building your niche website and setting up social media profiles. If not you are still in time to go through the entire process once again and come up with your researched and tested ideal niche.