The quest to find a profitable niche – whether it’s for a side hustle or a main thing – is one that many entrepreneurs face. While some may follow their passions to build a profitable business, the majority of us out there today are more interested in finding an industry that offers endless profit and expansion opportunities we can capitalize on – even during economic collapse.
Is there a fool-proof formula to finding a niche that can scratch such an itch? Yes, in fact it’s not as hard as you might think.
However, keep in mind that while using the suggested template below will indeed help you find a niche where you can build a joyously solvent and profitable business, you still may not hit a home-run your first (or even second) time out on the mound. As many of you know, there is much more to running a profitable business than simply finding a promising niche.
Step #1 – Getting Started: Do These 4 Things First
1. Make A List Of The Things That Bother You.
This is an age old method that entrepreneurs have used throughout the ages to come up with great business ideas. Netflix solved a major problem when they made it possible to stream people’s favorite shows without those annoying commercials networks force on the public.
Perhaps there’s a product out there that you love that has surmountable drawbacks you can solve? An excellent example of a rather simple product that solved a huge problem for Apple Earpod users is the highly successful Sprng accessory that keeps them from falling out while using them.
2. Get Out And Ask People What They Want.
You might wonder why in the heck you’d need help identifying a profitable niche if the world just told you what they want. The fact is, most entrepreneurs spend their time researching in every way BUT asking the public first.
This idea-generating tactic can be accomplished in many ways, from focus groups, breakfast meeting clubs, business round table discussions (ie., where you meet with other entrepreneurs), and asking blog and social media subscribers what gaps they see in the market for products or services they need.
3. Observe And Take Notes.
Hit up the cafes, stores, shopping malls, parks, office waiting rooms and the like, to observe people in their natural habitats (while not acting like a stalker). See what they’re reading, listen to what they’re talking about with others. Become less afraid to strike up conversations with strangers to see what sort of information you can extract from them.
If you’re the narcissistic type who thinks this can’t work, check out former General Electric CEO legend, Jack Welch’s 10 quotes for success and pay particular attention to number 9:
4. Research What’s Trending Right Now (And Future Trends to Watch For).
If you’ve identified a specific industry and want to niche down, watch what’s trending in that industry on one of the many sites that cater to that need. Other great resources include the Harvard Business Review, CNN television, and many others.
Even watching sitcoms, drama, and even reality television can help you spot current and emerging trends before their respective markets become saturated. The best thing about trend spotting is that it’s like a muscle: The more you use it, the better you’ll get at spotting the winners and disregarding the losers.
Step #2 – Start Looking For Your Target Demographic
While it might seem like a great idea at the time, you don’t want to start trying to sell a feminine beauty product to husbands. Not enough of them will bite and really, what woman wants their man to buy this stuff for them anyway? You need to go for the jugular when it comes to developing and marketing products to niche markets.
Ask Yourself: Who’s Going to Buy It?
Ask yourself the bullet-point questions below and any others you can think of to track these people down and get them before the competition does. If you don’t end up having any competition right away, all the better! Keep in mind that not all will apply directly to developing a product and marketing it to your targets, but the more you know the better off you’ll be – now and in the future:
- What kind of buyer does your business target?
- Are they methodical (e.g. home buyer).
- Impulsive (e.g. always looking for the next best thing).
- Generally skeptical about everything (e.g. information products).
- What age and gender are they?
- Where do they live?
- What do they do for a living?
- What’s their income?
- What education level do they have?
- Where do they like to spend their downtime and doing what?
- What books, programs, podcasts, radio, and other entertainment do they listen to most?
- What (problems) keeps them awake at night?
- Where do they see themselves in 5, 10, 20 years time?
Some answers gleaned from the above questions will be purely speculative, but should be based on all the data you gather along the way. This information will help you develop a product that suits your market’s tastes, while also setting the wheels in motion for what kind of marketing will be necessary to reach out to those ideal buyers.
Nailing down the information listed in the paragraphs above will also help you determine who you do NOT want to target with your product, to avoid wasting development and marketing dollars.
Step #3 – Deploy And Attack!
All that’s left at this point is to develop your product and keep pushing forward until you succeed.
About the Author: Ivan Widjaya is the owner of the award-winning entrepreneurship blog Noobpreneur, as well as several other blogs. He is a business blogger, web publisher and content marketer for SMEs.