Finding a profitable niche is the first step of creating your company because your brand, marketing, and website will all include aspects of this business decision. Picking the right business niche can be difficult, even after filling a list of all your passions and interests.
If you’re struggling to decide, follow these 5 steps that will help you narrow down your choices.
1. Outline your Interests on Paper.
While selecting the right industry incorporates more than your passions and interests, it’s still an excellent place to start. Make a list of 10 of your top interests on paper. If you’re having a hard time doing this, focus on the many ways you like to spend your free time. Your hobbies usually incorporate your interests because they’re activities you enjoy to do.
If you care about a topic, you’re more likely to continue your business when things start to get tough, or you lose motivation. Even if your motivation is making money, that’s good enough to start a blog or create products as long as you put the consumer first. If you don’t care about the business niche you chose, you may not have the drive to continue.
2. Find a Problem and Solve It.
Now that you have a group of topics, you’re willing to work with, you need to continue to narrow your options by determining what your niche will solve. One of the ways the fidget spinner became popular was its health aspect. While the fidget spinner was just a spinning top, it was usually purchased by children who had high anxiety because it helped them relax.
The fidget spinner solved a problem that was seen as unsolvable without lifestyle intervention or medication, and your niche can also solve issues even if they’re unrelated to health. Peruse the internet and see forums related to your niche that speak about a problem they have, and seek how your new product can alleviate these problems.
3. Research Competition.
Finding competition in your niche is a good thing because it’s proof that what you’re selling has a market. Although creating a new product could revolutionize your business, it’s also costly and risky. Unless you have the capital to develop the next big thing, research what your competition is doing and attempt to do it better rather than redefining what’s already done.
There are plenty of ways you can improve on a competitor’s product. For example, if your rival has a low-quality version of what you want to produce or isn’t forthcoming about their ingredients or processes, you can do so as a way to compete.
4. Determine Profitability.
As mentioned, creating a new product may not give you the returns you want if there isn’t a confirmation that this niche exists. However, you also don’t want to be in a niche with too much competition because you’ll have to share a big chunk of the market. Instead, find a niche that isn’t too popular or too obscure.
You can do this by browzing products in your category and see how much they charge. Depending on what your product is, you may need to price higher than the competition. For example, if you knit blankets by hand, you’ll need to account for time and materials, but having hand-made products can be a part of your marketing and consumer pull.
5. Test the Market.
If you need information about your product’s popularity, it’s a good idea to create a landing page for your product’s pre-sale. You can drive traffic to this page with paid advertising or a social media presence. As you gain customers, doing this step will be easier and less time consuming because you’ll have a large pool of testers.
Keep in mind that not succeeding in pre-sales doesn’t mean the product isn’t needed. There could be an issue with your marketing or visibility. You may need to gain an audience in another way or start receiving reviews before you try again.