A standard road to success for many small businesses and entrepreneurs is finding a niche market and dominating it.
It is almost impossible for a large retailer to meet the needs of all its customers.
And this is where you come in.
Finding a niche market and making it your own starts with identifying your niche and ends with careful execution and marketing.
4 Ways to Identify Your Niche
1. Determine Your Interests and Passions
What do you do in your free time? Where does your mind wander off to while you’re working? What topics can you endlessly research? These are just a few questions to consider when identifying your interests and passions.
Make a list of your interests and narrow it down to the ten you feel you are most committed to.
Why does it matter if you’re passionate about your projected niche?
Running a business is not easy at all, especially when starting out with only a few employees or even just yourself. At some point, the potential money you plan to earn won’t be enough to keep you going. This increases your odds of quitting tremendously, especially if you are a first-time business owner.
Being intensely passionate about something will be a crutch when putting in the legwork has your legs feeling like they’re about to fall off. It’ll continue to motivate you through the rough days and be an excellent addition when you're on the incline.
2. Become a Problem-solver
So, you’ve got your list of all your passions narrowed down. Now what?
To have a successful business, you need to solve a problem. This involves finding issues that your target customers are experiencing. Creating a customer persona is wonderful for determining this.
Examining where your perfect customer works, for example, can help you determine if your productivity app will be useful for them. If not, this doesn’t necessarily mean you’ll need to find a new product and a new niche. You may just have to re-evaluate your target. Maybe instead of targeting the so-called "9-to-5" workers with your app, you can target entrepreneurs who may have difficulty managing their time.
Another way to identify potential problems is to actually have conversations with people in your target market. Ask them what their biggest daily challenges are. Does it fit within your niche? Can your product solve the problem?
Once you narrow down your interests and begin choosing a niche that fits, start to determine your target customer and if you have the answers to their problems.
3. Research Your Competition
If you find out your niche has a lot of competition, that may not be bad. You may have stumbled upon something profitable, which is the green light to get started. However, you need to make sure you know what it takes to make yourself stand out.
Can you create a better product/service than the competition? Can you use your personality as a selling point? Do your competitors advertise often?
Knowing the weaknesses and the strengths of your competitors will give you an edge over them. When identifying your niche, if you can’t figure out how you can stand out in the crowd, it may be in your best interest to try a different niche.
4. Identify How Profitable Your Niche Is
You have your niche narrowed down, you know exactly how you can help people, and you know you can easily beat out the competition. But you also need to know just how profitable your niche is.
As mentioned earlier, being passionate about your business is essential. But it won’t pay your overhead expenses or your rent. You need to be practical if you don’t plan on going bankrupt. When determining the profitability of your niche, consider the following:
- Is there a high demand for my niche-related products?
- Are people searching online for this product?
- What is the average price of my niche’s products?
- Will it be challenging to make money?
- What is the outlook of the niche itself?
It is easy to convince yourself that you can find a way to make money with a niche that you’re intent on choosing. But when choosing a niche, you need to do enough research to make a practical decision.
3 Ways To Make Profits In Your Niche
You’ve decided the perfect niche for you. Now, you’ll put some work into making it profitable. Just existing in a lucrative market does not mean you will automatically create a ton of profit. There are four steps you can take to make your passion make your profit.
1. Identify an Available Niche Market
If you've determined that your niche market is profitable, then the fewer competitors, the better. You’ll want to do more in-depth research on the market once you reach this point. Determine the market size and how much of it is available to you.
Also, make sure you know the outlook of the market. The trends may show that it started off strong but is slowly withering away. You wouldn’t want to enter into a dying niche.
2. Provide a Unique Product or Service
If your market is over-saturated, it may be hard for you to break through. Yes, you should be able to stand out among your competitors. But the fewer competitors you have, the better.
With that being said, being one of the only ones selling what you're selling means you need to come up with an innovative product or service. Remember that this product or service must solve a pressing problem.
3. Market Yourself
It’ll be difficult for people to even find out about your business without a little marketing. After all, you’re trying to help people solve problems. How can you do that if the people can’t find you and vice versa? You must invest time and money in marketing and spread the awareness of your business to your potential customers.
Finding a niche market and owning it requires thorough research and a lot of passion. Knowing where you stand in your market and what problems you can solve will give you a competitive edge and validate your choice of the niche you’re in.
Creating a profitable niche involves taking all your research and implementing it strategically. Your niche should excite you, resolve problems for customers and make you money.