Finding Your Niche Market

You've decided that you want to start a business, but what business should you start? Hundreds of people start new businesses every day, and most of them don't bother to do any research on what is needed. So many of them get so caught up in the idea of running a business, that they forget to research the market and find ways to actually help people. I decided to put together a 5-Step Process that'll allow you to do that research and get ahead of the competition from the start.

You're here because you already understand the importance of having a niche market. Which means you understand that a niche market is a byproduct of specialization. Instead of offering everything under the sun, we're going to focus on finding a specific set of products or services that you can offer. So...

What are your interests? What are you passionate about?

This is by far the most important question to start with. By asking this question first, we can find out a bit about your background and the skills you already have that you'll be able to apply and assist your clients with.

• Have you spent years in a specific industry and know just about everything about it?
• What do you do in your spare time?
• Does anyone reach out to you and ask for your advice on a specific topic?
• Is there anything that you're currently learning?
• What do you do when you have a problem?

Now the hard part, write down your answers to the questions above. This'll create a starting point for you to consider different ideas for your business' niche market. You don't need to share it with anyone, and it's not being published online, so feel free to make it as long or short of a list as you feel comfortable.

Identify the issues and needs of the customers you want to work with.

Now you need to sit with your list of ideas and really delve into the problems that your target market faces. What is it that you know that'll help them? Why would they buy it from you? Start doing research to determine what behaviors and challenges these people face. There are many tools available to do this research online, from the Census Bureau to doing your own surveys, spend some time here and find the resources that'll help you. Remember that the time you spend here is time you'll save scratching your head later on how you can help your customers.

Research the competition.

Before you start spending your time and money on developing your new brand, you'll want to take a look at your competition. You may have a great product idea, but how many other businesses do something similar? These businesses will be your competition online and the better you understand them and the direction of their businesses the better. Can you find a gap that they don't cover, an issue they solve poorly? Looking to get started on that competitive research? Checkout Google Trends, the Google Keyword Planner or even Amazon to see what's going on in the current market. The more research you do here, the easier it will be to do the next step.

Define your niche market and its ability to be profitable.

If you'll be looking for funding, this step is critical. And if you're not, all the better to know this before you start spending money on ads. The better you can define who your customer is, what they value, their interests, where they're located, the products they would buy and the price they would be willing to pay, the closer you are to determining if your business idea is viable. If you do research and find that your product must be priced outside what they would be willing to pay, you'll realize early on that it won't be profitable. If you find similar products but not a lot of people selling them, it may be a profitable idea to get behind.

The most common niche I see people getting into today are t-shirts. Somehow, these people have missed how many t-shirt companies there are and how so many of them offer the ability to add their own design to a smorgasbord of shirt options. They think a custom t-shirt company is the "wave". Most of the time it's all about their "custom designs", which while pretty cool, I'm sorry to say, can be screenshot, then sent to a designer on Fiverr and for a few bucks recreated at high resolution then used to create their shirt from the cheaper printer down the street. I poke at this idea, because I, too, almost started a t-shirt company, but I did my research and stopped cold before starting.

So, take a look at the competition. Use Amazon and Google to find current prices to your competitors' products, search agency directories if you're in services and checkout services like Pricefy.io to do price monitoring.

Test your product or service

Nothing will tell you more about the need for your product or service than testing the waters. Create a simple website or landing page, so people can find you, then offer a free trial period or free sample to get some feedback from your target customers. Don't go broke doing this, but set aside a predetermined amount of money that you're willing to invest doing market research with and use that to determine market demand. You can even use paid ads at this point to drive traffic (notice I'm not saying conversions here) to your website. If you've got a unique product or service, hit up crowdfunding websites to see if there is any interest.

If your test fails to perform as you'd hoped, you aren't done. You can always go back and look at the key areas the product or service can be improved. You should even have feedback from initial purchases that'll tell you even more about where your customer pain points are and things you can do to improve.

Conclusion

By going through this process, not only does it save you time and money, but by specializing your products and services to a narrow market, you'll be able to produce your products faster, use resources better and develop a loyal customer base that can help you hit the mass market. The key is really tailoring everything you do to your niche, finding ways to help them and growing from there. Once you're done with this list, checkout the next blog on How to Identify Your Audience, Persona, and Goals.