When starting up a business, figuring out how to find a business niche can be daunting. Centering a niche will make your progress much easier to handle and tighten your focus. In this article, I will talk more about what a niche is and how to find your own.
What Is A Niche?
A niche is a specific area of a broader market that your business focuses on. It’s a segment of the market that has particular needs and wants that you can cater to with your products or services. It is in this specialized segment of the market that you want to position your business. By finding a business niche, you can stand out from your competitors and become an expert in your field.
Simply Put: A niche is a narrow area of focus for your business where you can corner the market.
Do You Need A Niche?
You will find many debates on whether a niche is necessary or not to the success of your business. The truth is your can operate within a niche or not but going without a business niche will make your workload much larger and your target market hard to pin down. By making the choice to find a specific niche for your business you increase the possibility of sustainable growth and success.
Reasons to Find A Business Niche
- Build customer loyalty. Customers will choose your brand over a large corporation offering more product types. Stronger connections will be made with customers as they know you will meet their specific needs.
- Lower marketing costs. By choosing to find a business niche, you can target a specific market of customers. Narrowing your marketing will increase the likely-hood of conversions and sales.
- Demonstrate expertise. Choosing a niche establishes you as a thought leader in the space. It solidifies you as an expert, establishing credibility and building trust amongst relevant customers.
- Profitability. Narrowing down on a niche lets you learn about specific customer groups. The more you know about your customer’s needs the better you can serve them which leads to more sales.
- Reduce Competition. By entering a niche, you automatically differentiate yourself from companies seeking the mass market. A smaller pool fits less fish and decreases the competition.
How To Find A Business Niche In A Few Steps
1. Identify Your Passions and Skills
Take some time to determine what your are passionate about and where your skills lie. The space for a profitable and enjoyable business sits somewhere in the middle. You need to find a business niche that you are passionate enough about to sustain during slow periods and where you have enough skill to leverage for profits.
2. Do Market Research and Find A Demand
While we all hold many interests, not everything holds a strong enough demand in the market to sustain a profitable business model. With market research, you can determine how competitors in the space are monetizing and how much growth potential there is for your chosen business niche.
Here are a few ways to determine if there is a big enough market for your niche:
- Total addressable market (TAM). This is the total potential revenue that your business could produce if it captured 100% of the target market. For example, if you’re selling a product that is aimed at men aged 18 to 44, your TAM would be the total revenue generated by all companies that sell products to this demographic.
- Size of the niche market. This is the portion of the TAM that is made up of your target market. For example, if you’re selling a product aimed at men aged 18 to 44 who are single and own businesses, your niche market would be the TAM’s portion of this demographic.
- Growth rate of the niche market. This is the rate at which the niche market is growing. Look into how quickly a specific niche is growing year over year .
3. Analyze Competition and Find Ways To Differentiate
Keep in mind that when examining competition , that a solid about of competition is a good thing when you find a business niche to focus on. A large amount of competition demonstrates that there is a lot of market share to grab up. Focus on improving or adjusting on what the competition is doing in order to build your own customers and possibly even convert others.
Focus on these three factors when researching competition:
- Low-quality content. If there are creators or businesses in the space but little to no effort being placed on content creation, there may be a space for your business to elevate the standards.
- Lack of transparency. Authenticity and transparency are refreshing especially in spaces where there isn’t any already.
- Lack of paid competition. High search volume with little to no competition in paid advertising is a great opportunity to upset the market when finding a business niche.
4. Build An Audience and Test Your Niche
If you are seeking to make money online, you should definitely be building an audience of some sort (YouTube, Blog, etc. ) as it serves as the easy way to generate consistent revenue via the internet. Monetizing “attention” is the way of the future. Once you find a business niche that you want to try, having an audience will help you determine if people are receptive to different ideas or not.