5 steps to find the right business niche – best practice and metrics
Before starting their own business, many people sort out the most demanded niches in business. But there are no completely win-win options that guarantee success because anything can happen. Many factors influence the result. Online business is a great way to make money and grow. It practically does not limit the entrepreneur in terms of topics and opportunities. But such a wide range of activities does not make it easier to start a business and choose a niche; it even complicates. So let’s figure out how to find the right business niche to bring you the maximum profit.
5 questions for finding a business niche
The main point when choosing an idea for a business is self-orientation. There are no universal profitable niches. The task is to find the one that will bring maximum benefit to you. Based on this, we build a chain of questions that will help you choose a direction.
1. What do you enjoy doing?
Obviously, as a result of the development of the project, you plan to make good money. But even big bucks bring maximum joy only if you enjoy your work. Therefore, the first thing to think about when determining which niche to open a business is your personal preferences. Business shouldn’t get bored after a couple of months, forcing you to look for something new. In addition, the development will only be effective when you are genuinely interested in the subject of the project. For convenience, make a mental map or just a table. Fill in the right column with the activities you like. It can be not only a “work” activity but hobbies should also be considered: even simple hobbies can be profitable for you.
2. Do you know about it good enough?
Having collected in one list all the types of activities that interest you try to evaluate your knowledge, experience, and opportunities. Data can be recorded in the second column of the table, describing the degree of immersion in the topic (for example, vocational education, specialized courses, etc.). It is essential to assess your capabilities in the areas that interest you and determine the most powerful ones at this stage. As a result, the list should be reduced – it will contain niches in which you are well versed. Plunging into an online business, in any case, will take some time to create a website and promote it. But if you have to acquire knowledge about the chosen professional, the terms will be significantly increased.
3. What are the market characteristics?
You have determined in which niches you are ready to start a business. Now you need to research them and understand how the market you are going to enter works.
What aspects you need to assess:
Availability and level of demand.
Even the most seemingly ideal niche for a business is doomed to failure if potential customers are not interested in it. For example, it is unlikely that fur boots will be trendy in Thailand, no matter how warm, comfortable and beautiful they are. To assess the level of demand, you need to find out how often and with what frequency (seasonality) you plan to offer is requested by users. For this purpose, you can view data from Yandex Wordstat, Google Keyword Planner, and other services to select queries. When analyzing, be sure to consider the region.
Competition. The number of players in the market, their strengths and weaknesses.
It is difficult to find a business niche in which there are no competitors. Their presence speaks of the demand for the offer among users and the significant benefits obtained. To understand how to enter an already existing and fully developed market from the point of view of competition, it is required to analyze the existing players. It will allow you to take into account their successful experience and use it in your promotion strategy. For more details on what indicators to check and how exactly, we wrote in the article “Step-by-step algorithm for analyzing competitors.”
To find a profitable niche for a business, even before the implementation of the project, it is necessary to determine the following data about the “ordinary” representative of the target audience:
- gender and age;
- area of interest;
- professional activity and income;
- pains, needs, objections, etc.
The more detailed the portrait of a potential client will be, the more chances to get his attention, heart, and money.
A special “winning” offer.
You are well acquainted with the field, know the competitors, assessed the degree of interest of potential customers, and understand who he is – the target user of the site. At this stage, there is enough data to prepare a special offer. If none were found, move on to another niche.
Preliminary Calculations of Expenses and Incomes.
Budget planning should be done not only in running a business but also before starting it. It is essential to consider all possible costs here: for the creation and promotion of the site, employees, equipment, production or purchase of products, etc. You need to understand what costs will be required for preparation and the first months of the company’s development. It is also necessary to calculate the possible income and the frequency of their receipt in advance. Even approximate figures explain how long it will take for a business to start covering investments and may turn out to be a plus. Without preliminary financial planning, already in the first days of implementing an online project, you may encounter a situation when there are no funds even for its launch. In this case, the investment will be wasted. The research results for all of the listed items are entered in the table with the remaining business niches. Now it will be easier to compare them and identify the most profitable ones. At this stage, usually, no more than 2-3 options remain.
4. What resources does the project require?
The stage is a test: whether all the necessary resources (including premises, equipment, employees) are available. Then, when you start a new business and want to develop it from scratch – choose the least problematic implementation. Usually, at this stage, there is only one niche that can bring more profit at the lowest cost. For him, you have everything you need: interest, skills, experience, resources, and understanding of how to use them correctly.
5. What tools and metrics are needed for promotion?
A practical stage within which a strategy for the advertising and analytics of an online project will be created. Specific metrics are required for the development of business in different directions. With their help, you can set goals and track their achievement. They will also help you understand target users and quickly make changes to the project to improve behavioral factors. You will need this information when setting up Google Analytics and Yandex Metrics analytics counters. Already, ideas should appear to stand out from competitors and make an exciting offer for users. Be sure to record them, and after starting the business, test the impact on the target audience. A block of ready-made ideas often becomes the basis for success.
When answering the question of which field of activity to choose for a business, you should not rely on ready-made lists of “the most profitable online projects of the century” or advice from friends. Consider your abilities, opportunities, interests, as well as the specifics of the market in which you will compete. By gradually answering the fundamental questions for choosing a business niche in a particular case, you can easily find the best option. Already at the stage of definition, you can think over many useful ideas and solutions that will benefit the business from the first days of the project.
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