The Internet is full of blogs and websites that started out well but then fizzled out over time. In many cases,it happens because the business owner didn’t take the time required to research their intended niche carefully to determine whether or not it was a sustainably paying one. They didn’t do the research on who their ideal customers or main competitors would be before jumping in completely.
These days, anyone can start an online business with just an idea, a few dollars, and a website. However, not everyone who starts a business will be able to stay in business unless they have discovered a profitable niche that has a large paying market that will cover their time and expenses every month.
There is nothing worse than wasting your time and effort chasing a niche market that looks promising but proves to be unprofitable.
The following five steps will help you to discover whether the niche you want to work in is a paying one before you even try to register what seems like a great new domain name or launch a blog.
If you’ve been thinking about starting a new online business but have yet to do your research on the market, use the following action steps to ensure that you know your niche thoroughly, so you can avoid wasting your time and money where it’s not likely to be profitable.
Step One: Identify Your Passions and Interests
If you haven’t already identified your interests and what you are passionate about, this is where you will want to start. Being in business for yourself is anything but easy, and at some point you are going to be tested.
If you own a business that you don’t care about, the chances increase substantially that you’ll quit when the going gets tough. This is especially true if you are a first-time business owner.
This doesn’t mean that you need to find the perfect fit. You just need to be passionate about some aspect of running the business.
Having even a single aspect of the business that you are passionate about will increase the odds that you’ll stick with it when you face challenges. If you don’t care about what you’re doing, your motivation will be hard to sustain.
Take some time to write down five to ten areas that you are passionate about or that you have a topical interest in. If you are having trouble doing this, here are a few prompts to help you figure some out.
- What do you like to do in your free time? What activities do you look forward to participating in when you’re not doing it?
- What kinds of magazines do you subscribe to? Are there any topics that you like to learn about?
- What clubs and organizations do you participate in?
Step Two: Identify Problems You Can Solve
Once you’ve identified some things you are passionate about, you can start narrowing down your options. If you want to create a profitable business, you need to find problems that your target audience is experiencing that you have some relevant knowledge, expertise, or experience that can help solve them.
If you aren’t sure how to figure this out, here are several things that you can do to help you identify problems in specific niches.
- Work with members of your target audience to get their input. Have one-on-one conversations with members of your target audience and ask specific questions that will help you to uncover specific pain points.
- Look at online forums. Get online and look for forums that are related to the niches that you are considering. Search through the discussions that are taking place. Try to determine common questions that members are asking and what problems they are having.
- Conduct keyword research. Use the Google Trends and Google AdWords tools to explore a variety of different keyword combinations. Doing this can help you identify specific search terms that are related to pain points that your target audience may be experiencing.
Step Three: Research Your Competition
Having competition isn’t always a bad thing. If you find that the niche you are looking at has some competition, it may mean that you’ve found a niche that will be profitable.
However, you need to thoroughly analyze the competing sites to see if there is a place in the niche for another business. To start with, you’ll want to create a new spreadsheet and log all of the competing websites that you can find.
Next, you’ll want to analyze each site to figure out where there might be an opportunity for you to stand out from the rest of the crowd to build a profitable business. You need to determine whether or not you can still rank on Google with the keywords you’ve chosen.
Figure out how you can differentiate yourself from the rest of the crowd and create a unique offer. Here are several different ways that you can enter a niche market and still find success even if there are already a number of sites that are serving the market.
- You can easily outrank your competition if their sites contain low-quality content. If other business owners aren’t creating high-quality content that serves the target audience, you still have a chance to build a successful business in that niche.
- Many sites have a lack of transparency. Many new business owners have been able to completely disrupt entire industries by creating a transparent and authentic presence in a market where other sites are considered faceless and overly corporate.
- If you’ve discovered a keyword that has a relatively high volume of searches but little paid advertising or competition, there is an opportunity for a new business owner to upset the market. The lack of paid competition can create tremendous opportunity.
Step Four: Determine the Profitability of Your Niche
By now, you should have a good idea about which niche you would like to get into. While you may not have completely narrowed down your list to a single topic, you’ve likely found a couple of ideas that you feel pretty good about.
Now you will need to try and get an idea of how much you can potentially make in the niche. A great place to start your search is Clickbank. Clickbank is a market platform for vendors to sell their digital products. It is one of the largest affiliate-marketing networks for digital products like software, ebooks, and membership sites.
You can use the site to browse the top products in your category. If you are unable to find any offers in a particular niche, it isn’t a good sign. It could be a sign that no one has been able to monetize the niche. You want to find categories that turn up a decent number of products, but not an overabundance of them.
During your research, make notes of price points so you can know how you need to price your own products in order to stay competitive.
You’ll also want to keep in mind that you don’t necessarily have to have a product offering of your own to start your business. You can partner with another product’s creator, advertisers, and site owners in your niche to start making commissions by selling their products while you work on developing your own reputation and unique solutions.
Step Five: Test Your Idea
Now that you are armed with the information you need to choose a niche, the only thing left for you to do is test your idea.
One easy way to do this is to create a landing page for the pre-sales of the product you are developing. Then you can use different advertising and marketing methods to drive traffic to your landing page.
If you don’t get enough pre-sales, don’t become discouraged yet. You may still be in a viable niche, but either your message isn’t quite right or you haven’t found the right offer. This is where you start to hammer out the specifics of what your audience is able and willing to buy to reduce the lag time for revenue to start coming in when you finally open up shop.
You should begin to leverage A/B split testing so you can optimize your conversions and determine whether or not there is anything stopping your target audience from taking action and buying your products.
Once you’ve determined that the niche you’ve chosen and the product you’re offering is viable, you’ll want to begin to develop a fully functioning website. You’ll want to include a blog on the site to begin establishing your reputation and generate more traffic to boost your revenue.
Keep in mind as you go along that there isn’t necessarily a perfect process for finding the perfect niche. You’ll need to do your homework and then conscientiously move forward.
Good research is a critical component of developing a sustainable business, but don’t let yourself get stuck in the planning phase or you’ll never get around to starting and won’t find yourself on the path to success.
As an entrepreneur, simply having a great idea isn’t enough. You have to learn how to become a good starter if you want to be successful.