How to Choose a Profitable Niche and Turn It Into a Real Business
When you begin a company without defining a specific niche, it is similar to aiming at a target in the dark; although you might put forth a great deal of effort, there will not be consistent results. A well-defined and established niche also provides your business a direction, allowing customers to find you easier than if you were not targeting a niche.
The good news is that when developing a niche, it does not define your parameters; rather, it provides an avenue for you to strategically position yourself.
In today’s highly saturated market, many customers experience “choice overload”; they have too many options to choose from and therefore do not necessarily need more options to choose from, but rather want the most appropriate product or service to solve their unique needs. In this environment of “choice overload”, having a defined niche will typically provide you with a significant competitive advantage, as it allows you to communicate more effectively with a smaller, more targeted audience, earn their trust more quickly, and also create products or services that are perceived as tailored or customised
Most entrepreneurs just starting do not realize that narrowing down to a specific niche actually creates more opportunities for business growth; rather than limiting opportunity, a defined niche creates faster growth, reduced marketing costs and increased loyalty to your brand when customers feel understood and appreciated, customers will purchase from your company repeatedly.
Defining your business by a clearly defined niche simplifies your decision-making. Having clarity around the type of customer you serve assists with all aspects of your business – including branding/messaging, pricing and product creation. Defining your niche allows you to build your business around your customer rather than randomly guessing how to build your business
1.Begin with Your Skills & Interests
The best niches are usually the place where your skill set, experience, and area(s) of interest all meet. To figure this out for yourself, ask yourself:
What kind of problems have I already worked through as an entrepreneur?
Which topics do people come to me about the most?
What types of stuff do I get excited about to-read or discuss?
A niche does not have to be a life-long love but, rather, a niche that keeps you excited for the long-haul is more likely to produce a successful entrepreneurial venture. The more the founders of these businesses understand that environment, and what is going on in that industry, the faster they will grow.
Take action: List 5 experiences and skills that you’re already experienced at, and with those skills write a list of all of the problems associated with those skills.
2.Define a problem to understand which niche will help you find your niche in the market, as the niche market includes the customers and the unique service they offer
First, let’s take the example from before: “fitness coaching.”
Instead of saying: “Fitness coaching,” say: “Fitness coaching for busy professionals aged 40+ who suffer from back pain.”
Clearly defining a problem makes it much easier to develop marketing materials and establish credibility as a consultant.
Next: Identify your audience’s needs using the following format: “I help [identify the audience] solve [define the problem].”
3.Find out what’s driving your niche, not just what you think it should be
You cannot make money with your passion alone. You must first validate that your idea has a market. You do this by:
1) Searching the internet for forums and Reddit groups where you can see discussions on the subject
2) Checking out reviews of other products/services that directly compete with yours
3) Finding out how much money people are currently spending on products/services that help solve the same problem that you are attempting to help them solve.
If you see that people are spending money to solve their problems in this category, that is an excellent indicator.
Take action: Find three competitors within your niche and note what they do exceptionally well and what customers have said about them in complaints.
4.Define your target market
Serving all is serving none. The more specific your audience, the better your brand will be.
For example, you can narrow your target market down by:
Age
Occupation
Where they live
How long they’ve been doing it (beginner or experienced)
When you define your target market, you can connect directly to their needs, fears, and goals.
Take action: Create a profile of what your ideal customer looks like, including their largest problem and desired outcome.
5. Testing Prior to Committing
You do not have to create an entire company in order to evaluate a specific market segment. Start small by:
Creating a beta version of your company’s service
Creating articles, videos, and other forms of media related to the market segment
Running a small advertising campaign or pre-sales of your company’s product or service
Obtaining genuine feedback from your customers is more effective than guessing what they want.
Testing will save you time and money and will help eliminate a great deal of wasted effort.
Your action item is to produce an offer or other clutter/product to evaluate people’s response.
6. Evolve with Your Customer’s Needs
Your first market segment is not going to be ideal or perfect. Most businesses that have had success refining their market segments have done so over time, using their real-world experiences to further develop their product or service. The most significant aspect of your business is to begin with a sharp focus and to modify/fine-tune your product/service based on actual experience with responses.
Your defined market segment is not a permanent boundary but your opening phase; you may revise and enhance it as you learn more about your customers.
In conclusion
creating your own niche is to be specific, not limiting, because once you’ve defined who you are serving and what kind of problem you are solving for them, your marketing will come more easily to you; this is important because customers will be able to develop their trust in you more quickly, and therefore, your business will have a much better base on which to expand.
