Many businesses fail in the first two years of startup. Several reasons contribute to this: lack of funding, not enough knowledge about the market, and an unprofitable niche. Many new entrepreneurs decide to take the leap without doing proper research into the market. Unfortunately, they suffer the consequences of this mistake.
I want to show you the steps of how to research and choose a profitable niche for your business.
What Is A Niche?
A niche (pronounced neesh, not nitch) is a specialized market segment for a particular product or service. Niches can be further subdivided into sub-niches as many times as possible. Finding and securing your niche in the market you’re interested in is your gateway to business success.
Finding a Lucrative Niche for You
Here are nine steps to finding a suitable money space for your business:
1. What’s Your Passion, Babe?
Follow your passion! What lights your fire and sets your soul ablaze? Always start with what you love, because “if you do what you love you’ll never work a day in your life.” (Marc Anthony)
I can verify that from personal experience. Challenges will come and you will have rough days. If you don’t love what you do, you will walk away. It’s the love of what you do plus your WHY that keeps you grounded during those difficult times.
Working in your love zone feels exhilarating and empowering. You can work for hours without even thinking about it. Start with your passion…ALWAYS!
2. Sneak a Peak into the Market
What’s the market like for the product or service of your passion? This research will tell you if it’s worth investing your time and money into it. What’s the value of the market and is it scalable?
Here is a current list of the most lucrative niches available right now.
3. Let's Do Some SWOT!
If your niche market is viable, I highly recommend doing a SWOT analysis to give you a clearer picture of how to position your business. A SWOT analysis will help you identify the strengths, weaknesses, threats, and opportunities related to planning your business and provide a bird’s eye view of your competition.
4. Trend Surfing
Good business practice dictates that you assess the trends in the market before getting started. It shows you how the market has performed in the past and where it’s heading in the future. This will provide valuable information to help you move your business in the right direction. Where can you find this information? Go here.
5. Identify the Problem
At this stage, you have done enough research to have some solid information about your future business and market niche. So, let’s get down to business.
What problem will you be solving?
Businesses that do well are solving a particular problem like, how do I start a homeless shelter? I had a customer reach out to me from the Philippines last month with this exact question. He wanted to provide a home for the homeless but didn’t know where to start.
The problem: People are homeless
The solution: Give them a home, i.e., shelter
What problem will you be solving?
6. Product or Service?
Will you be providing a service, selling products, or both?
Will you be selling online or offline?
Are you purchasing products to sell or make your own?
Just a few questions to get you thinking.
7. No FREE ride!
Are there enough people willing and ready to PAY for your products or services? Unless you are running a non-profit business, you are in business to profit. So figure out this vital part carefully.
8. Check Out The Competition
Who else is in your niche market? Is there enough room for differentiation? What’s unique value will set you apart from them? Research to find out how your competition is faring. Don’t enter into the market blindly.
9. Marketing
What does marketing look like for businesses already in your niche? Is there a good response? What aren’t they doing that you could do for your business?
Know the lay of the land before you enter the territory. Happy hunting.
Check out my feature on the Go Solo Entrepreneurship website.