There are so many small businesses in the United States, (to find out just how many, check out https://foreignusa.com/how-many-small-businesses/) that finding an open space for your business to fill in an overly saturated market is a daunting task for aspiring entrepreneurs.
The best way to do just that is to identify an emerging niche market and become a dominant force early on within that niche, or to set up their business as a service or product which caters to the demands or consumer needs that big-time businesses fail to meet.
Easier said than done, right? Actually, it doesn’t have to be, as we’re about to walk you through the step-by-step guide we put together on how to choose a niche for your business.
The following steps will help you find a niche that’s suitable for you and your needs, as well as some hints and tips. We also touch on profitability, and whether or not you can truly know beforehand that you’re choosing a niche that will ensure success for your business.
What Is a Niche?
Simply defined, a niche for your business is the area in which your products or services will be specialized, which means it will have a huge influence on the direction of your business.
Your business niche also determines the type of customers you will want to target with your marketing, so it’s a good idea to opt for a broader niche and then specialize in several topics.
For example, if you chose fitness as the niche for your business, you might want to specialize in running, running gear, treadmill training, marathon training, personal training, sports injuries, and weight loss with blog posts or content created for these topics.
This, in turn, will inform your marketing strategy and will be the driving influence behind the type of products or services your business will offer to customers.
Just don’t allow your subject matter to become too wide-ranging or your content will become less focused and the lines of the niche you’re operating within could become a little blurry.
How to Choose a Niche for Your Business?
There are certain steps that an entrepreneur can take when in the early stages of setting up a business in order to establish its niche. This includes the following list we’ve put together which is widely agreed upon amongst experts in the business sector.
The customer is always right
Seeing what areas consumers are already interested in is a good way to gauge information on what niches are currently popular, which ones have always been, and the topics that would be a struggle to turn into profitable businesses due to a lack of interest.
Whilst you shouldn’t base your entire decision on a specific niche just because there’s a lot of customer interest, it certainly won’t hurt you to have highly visible potential customers.
Without a customer profile to inform your marketing strategy, you might not be able to effectively get your message across to your ideal target market, so being able to easily identify potential customers in a niche market is something to consider when choosing one.
Are your customers easily accessible?
It’s all well and good to identify your target market, but if these customers are not easily accessible to you and your business then this is hardly helpful, as the key to effective marketing is through communicating with your audience in an informative and engaging way.
Without easily accessible customers, even a tonne of interest won’t be enough to make your business viable as there will be no way for you to communicate. How will you draw in new customers?
This same applies to your customers being affordable enough to access, as some methods for marketing your business niche can come with a pretty hefty price tag attached, and this can cut into any profits you make.
Do the research
Niche markets are typically easily filled, and getting in early depends partly on timing and sheer luck. A better way to ensure your business stands out within a specific niche is to research other businesses which would be in similar or direct competition with you.
This can lead you to identify what works well or has proven success, what you could improve on, and if there are any missing gaps that your products or services could conveniently fill. You also need to think about the overall size of the market, how much of this you think your business might be able to corner, and more importantly, how long you can maintain it.
Google searches related to your niche are a good place to start, followed up by a bit of keyword research using resources like Google AdWords Keyword Planner or Answer the Public, which should show you the data behind the searches you’ve already Googled.
Remember to research offline avenues that are open to your chosen niche in addition to online research. Depending on the direction you go in, there could be local potential waiting for your business to tap into.
Establish your USP
Once you’ve decided on a niche, you need to further narrow down the subjects that your business will specialize in. What are your unique selling points? Within your chosen niche, what makes your products or services stand out from the competition?
Neglected niche markets make it easier for you to set your business apart from your competitors, so try to choose one which is under or poorly served so there’s space for you. You can identify these areas by looking at poor customer service reviews to see what they found lacking, and then making this part of your USP and business brand.
Think about the future
It might be early days, but it’s better to plan for the future success of your business now than to eventually get there and realize that scaling it up is unsustainable. There needs to be enough room for growth, so choose a niche with enough consumer interest for the future.
A good example is to consider dirt cookies. Even if you had the best business plan and a solid marketing strategy, if there aren’t many people interested in buying cookies baked with dirt (which we’re hoping there wouldn’t be…) then it’s not worth trying to enter this market.
How Do You Choose a Profitable Niche?
Everything in business comes with a certain level of risk attached to it, so there’s no scientific formula that reveals the answer to choosing a profitable niche.
That’s not to say that you should just pick one and hope, however. By following the steps we’ve laid out above, you should be able to select a niche that you can turn into a profitable business. You should also try to stick to a niche that you have some interest in, also.
For your business to be successful, you will need to put in the time and the work to make it so. Choosing a niche that you have at least a little bit of interest or experience in is advisable because it will make it much easier to do this, as opposed to starting from scratch in a niche that you know nothing about and have no interest in learning more about.
We hope that by the time you reach the end of this article you will have a better understanding of business niches and how to find the right niche for your business. There are hundreds of available options out there, so choose wisely!
Interesting related article: “What is a Niche Market?”