If you’re gearing up to start your own business, you certainly aren’t alone. Over 627,000 new businesses open each year—which means you may be stepping into a more crowded space than you think.
As you’ve started considering your business idea, you may have come across the term “niche.” But what is a niche, by definition? A niche is a business’s area of focus. It allows businesses to differentiate themselves from the competition—and to succeed—in a crowded market.
If you’re not sure how to find your niche, read on for five steps to get you started.
1. Consider Your Skills and Passions
This introductory step may sound obvious, but it’s one of the most critical factors in finding the perfect niche. Narrowing down your business to focus on areas you have experience in and passion for can mean the difference between a successful company and one you struggle to grow.
Make a list of your skills and passions. What training do you have? What special skills have you acquired? Can you bring any background knowledge from other fields? Though it’s certainly possible to succeed in a business that doesn’t spark your passion, a great niche will be at the intersection of what you love and what you know.
2. Identify Customer Problems
Successful businesses provide solutions to their audience’s problems and needs. If you’re going to see success, you need to be sure your customers are motivated to buy what you’re selling—and the only way to do that is through market research. Explore your customer persona, work to understand their challenges and buying behaviors, and decide whether you can provide adequate solutions.
3. Research Your Market
The perfect niche means nothing if there’s no market for it! To grow a lucrative business, you’ll need to do some basic keyword research to understand your potential audience. Are people buying products similar to yours? Do you have competition? What’s the monthly search volume?
This step can help you in the future, as your keyword research can help you identify the keywords you want to compete for.
4. Define Your Niche
Once you’ve put all of this together, it’s time to further define your niche through a little more research. You’ll want to consider critical factors like your audience’s demographics, their interests and location, and the price of your product.
5. Test Your Idea
Last but certainly not least, check to see whether your niche will work for your business. You can do this by creating a simple website that allows customers to find you, check out your company, and buy your product. Lure prospects in by offering promotions, allowing a trial period, providing free samples, or giving them a satisfaction guarantee. You may also want to take advantage of crowdfunding sites, which can be a great way to see whether there’s enough audience interest to support your product.
If you get through these steps and find your idea to be unsuccessful, that doesn’t mean you should give up! An idea that doesn’t test well may just need tweaking, or you may need to find a different niche. Go back through the steps until you’ve found the perfect niche to bring your business success. If you’re still struggling, it may be time to call in backup—so grab my free e-book to find your market!