Choosing a profitable niche takes some time and thought. There are many profitable niches to get involved in, but which one is best for you? Just because something is trending with Google doesn’t mean it’s the right niche, nor does it mean it has long-term potential. When you choose the right niche, you’ll be able to create multiple products or services on that topic without any trouble.
The things that really matter when deciding on a niche are:
- Do you like the audience?
- Do you care about the niche?
- Does it have monetization potential?
- How much competition exists?
After you have chosen your niche, you will need to be able to immerse yourself in it and be willing to keep learning about the audience and the solutions you provide the audience, so that you know what customers are looking for and that you can provide it.
If the niche is something you dislike, you’re going to become bored with it quickly and find yourself frustrated. Instead you want to choose a niche that you’ll love, and that you’ll be able to keep making your products and services better, and offering more to your audience than the competition, so that you can be top of mind for them. It all starts with choosing the right audience!
Choose Which Audience You Want to Work With
Many people think that you start with a product or service, and then find the audience. While that can be done, it’s better to figure out who you want to work with first, and then create products and services that they want. That way you can determine whether or not the audience is big enough to support the sort of income you want to earn. Below are some points to help you choose the right audience.
- What Are Your Audience’s Values? – What does your audience care about? Are they price or quality focused? Do they like high tech digital or are they more old-fashioned and prefer to see things on paper?
- Create an Audience Persona – For example, find a picture on an image site of what your main audience member looks like, then give them a name and a personality. Some people call this a client avatar. How old are they? Where do they live? What sex are they? What do they love to do? What do they do for work? What are their problems?
- Survey Your Audience – Once you have an idea who your audience is, conduct a survey to help you determine what their issues are so you can know what problems need to be solved. You can market a survey using PPC or through Facebook, directing your survey toward a laser-targeted group that consists of your audience.
- Read Forums and Groups – Go to places your audience hangs out; see what they’re talking about and sharing. Find out what makes them angry, what makes them happy, and what makes them tick. The closer you can get, the better.
When you’ve narrowed down the type of audience you want to work with and created an audience persona or avatar, you can move on to analyze whether you’re the right person for this group or not.
Know That You’re the Right Person for This Niche
Part of choosing a niche is to know that you’re the right person for the niche you’re looking at. Once you’ve picked your audience you need to go through and make a list of reasons why you are the right person, or your business is the right business to service that group of people.
The factors that can make you right for the audience are:
- Your education
- Personal experience
- Specialized knowledge
It’s important to know what you have to offer so that you can answer the question “why you” when it comes up. You’ll need this information when you create about pages, websites, sales pages and more to help develop trust from your audience in you and in your solutions.
What makes you the right person? Is it a combination of the passion you have for the audience, your education and knowledge? Write down the reasons you’re right for this. For example, if you want to start a yoga blog, do you know anything about yoga?
Even if you don’t currently, if you know that you will stick to it and learn along with your audience, you can still start a yoga blog. You will just start with a beginner’s perspective. Your blog can be about exactly that. However, there is a chance that you’ll lose interest. In contrast, if you have education and certification in teaching yoga and maybe natural nutrition, you already know you’re passionate about it. Plus, your knowledge is deep enough that you can create an interesting blog that could develop into a private community.
If you already have work experience with yoga and health, it’s unlikely that you’re going to grow bored with it. It is likely a good niche for you to consider. You’ll need to determine which levels your audience will study yoga at with you. If you’re an expert, you can have different levels on your blog and offer different levels of membership.
You’ve already seen a few ideas for making money with the idea of a yoga blog. You can make member only videos, offer menu plans for people who want to lose weight, and even offer a community of other yoga practitioners. With your idea, write down all the ways in which you can make money, even if it’s outside of your knowledge currently. Knowing it’s possible right now is what is important.
Check out the competition to ensure that your idea is different enough to make you stand out from the crowd. Before doing that, you may want to do a few other exercises to ensure that you have the right niche.
Develop a List of Keywords
One way that you’ll research the niche is through the use of keywords. Keywords are the words and phrases that consumers use to find a product or service. They use it during their buying cycle to learn about their problem, to find solutions, and to get opinions from others. A search engine’s job is to return accurate searches.
There are a lot of ways to trick search engines, but those are disappearing quickly. And while you do want to research keywords to help you with your niche search, you don’t want to overload your new business website with too many keywords and not enough quality content. So, for now, just use the keywords you find as a way to research your niche, find the competition, and find out where your clients hang out.
Try to come up with about 100 keywords and keyword phrases. You can use Google AdWords to help you find keywords, as well as the auto generation process that Google uses to help a consumer fill in their keywords as they start to type. There are also other tools developed just for researching keywords, such as SpyFu and Keyword Tool.
Keep the keywords you find in a spreadsheet. These will help you later if the niche proves to be a good one. Later you’ll want to use the keywords to help you come up with content ideas, product ideas, and more.
Determine Whether the Audience Is Large Enough
If you know how much money you want to make, and what values drive your audience, you will be able to determine if the audience is large enough to support your dreams. Can you make enough money with this audience and what will it take to do so? For example, if the audience is price averse but is very small, this may not be the right audience.
Can The Idea Support You? How Will It Make Money?
There are plenty of ways you can make money besides your own products or services. But, you’ll want to see if anything exists already. Check on Amazon, ClickBank.com, JVZoo.com, eBay, in trade magazines, the competition’s websites, and other places for products that you can promote. What are they selling for? How many will you have to sell in order to earn the kind of money you want to earn? Are there enough members of this audience to support that?
Ideally, the audience needs be large enough that you can service them in several ways with many niches. Then you can choose an under-served area that this audience needs solutions for and earn enough money to support your business.
Your audience will determine price, marketing methods, services, products and more, so it’s important to be sure that there are enough. For example, the show Shark Tank had a business called The Ledge Pillow on the show. The Ledge Pillow is a great idea for women with large breasts who wish to sleep on their stomach, especially for women with breast augmentation or women who are nursing.
While the owner had made sales, and the idea was good for a very small segment of society, it just wasn’t a big enough audience to support a business large enough for a shark. A shark needs multi-millions in returns, not hundreds or thousands. But, that doesn’t mean it’s a horrible idea. It just means that audience is too small to support a super-large business. But, that might be just the right size for your needs, especially if you plan to keep your business small.
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Do the Math
Yes, it can be hard to do the math, but it’s important. How much do you want to earn a year? Let’s set a number at $100K. That amount is roughly twice the median wage in the USA, so it’s a fair amount to start with. So if you want to earn $100K a year (we’ll pretend taxes and expenses don’t exist in this example), you’ll need to generate approximately $8334 a month, $1923 per week, or $274 per day including the weekend. This is a little more than $48 per hour if you worked a normal 40-hour work week. How much this translates by product will depend on what you plan to sell to them.
But, let’s say that surveys show there are 25,000 members of the audience you’ve chosen. How many and how often and at what price will your product or service have to be to support the lifestyle you want to live? Is this audience large enough to accomplish it? It helps to do this math to ensure that the audience is big enough.
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Study the Audience to Find Out What Their Problems Are
Once you’ve chosen an audience to work with, you can get down to determining what their problems are so that you can figure out which solutions you’ll provide to them. For example, let’s say you’ve chosen the audience of working parents who want to cook home cooked meals for their family each night quickly, healthily, and inexpensively.
The problems this audience has are that they think they don’t have the time to prepare healthy meals at home. So, they eat out a lot. Maybe due to this they’re suffering from health issues like obesity. Mostly, they just don’t know where to start. Believe it or not, a lot of people who grew up in the 80s did not learn how to cook. They had two working parents and ate a lot of instant food and TV dinners, or their parents were just so busy they failed to teach them.
If this is the case with your audience in the sample given, how can you help them?
There may be several ways to serve this audience.
- A Food Blog – Your blog provides recipes, tips, tricks and instructions to working parents to help them create successful family dinners without stress. You make money from affiliate marketing, menu planning, specialized digital cookbooks and advertising. Perhaps you even have private label cooking utensils and packaged food products to sell on your sight and through Amazon FBA.
- Menu Planning Service – Maybe you don’t want to blog, but you want to create a product that other bloggers can sell on their websites. In this case you have two audiences: the audience you’re creating the product for, and the audience that will sell it. You’ll need to make a sales page, create an affiliate program, and attract the bloggers to your product, making them feel as if it’s right for their audience.
- Cookbook Author – You can skip the websites altogether and service this audience by writing cookbooks directed toward this audience. They can be print, digital or both. You will market through targeted PPC campaigns, as well as by getting reviews from appropriate food bloggers.
Whatever audience you choose, figure out what their problem is and develop several ways in which you can help them find solutions to that problem.
Determine What Solutions You Can Provide to Them
Once you’ve defined your audience, you can start brainstorming what their problems are. Make a list of problems that they have without any concern to whether or not you are capable of solving the problem. Write down as much as you can during your brainstorm session.
If you know their demographics, and their attitudes, values and fears, you can often come up with a list of problems associated with that for a particular group. Go to message boards and find out what questions they’re asking. Participate in the groups they’re in so that you can get to know them better.
The more you know the audience, the easier it will be to develop solutions. Those solutions, along with the audience you provide them for, will be your niche. For example, perhaps your audience consists of book authors. What do book authors need?
You can probably think of more that they need and find a product or service that not only the audience will want, but that you’re perfect to do.
You will know when you come up with the right idea because you’ll suddenly realize that the item fits with your skills, knowledge, education and experience. Your heart will beat with excitement and you’ll have a “eureka” moment.
One thing you must determine is how you’ll earn money – how you’ll charge the clients, and how they’re going to pay you. Will you make money through advertising, affiliate marketing, services where they pay you directly through PayPal, or buy products you make yourself that you send them through the mail or offer digitally? Making a list of how you’ll get paid and who will be paying you.
Get to Know the Competition
Now that you know what product or service you want to provide to the audience you’ve chosen, you’ll need to check out the competition. It’s important to realize that just because there is competition, doesn’t mean you shouldn’t move ahead with the idea.
You will bring something unique and special to the niche that no one else has. But, by keeping tabs on the competition you’ll soon learn what they’re going to do and how to get a leg up on them. Having said that, ideally you want to find an area where the audience is under-served so that you can get most of the business in that area.
The ways in which you can study your competition are:
- Google Search – Starting with Google is a good way to search your competition. You’ll need to develop a good list of keywords and keyword phrases that the audience uses to find this type of product or service, but once you do, you’ll find the competitors. Make a spreadsheet of the competitors that stand out.
- Google Trends – You can use this tool to stay abreast of top trends in your industry. Just go there and type in a search term. It will tell you about how interest has changed over time, related searches, and even break it down by country for you.
- Google Alerts – You can use a search term or phrase and let Google send you alerts in your email. This will help you stay up to date on blog posts, news stories and more about your industry and even a certain person or company.
- Social Networks – Today, any successful business is using social media; they might even have Facebook groups. They are certainly using LinkedIn, Twitter and Instagram. Taking time to monitor the chatter surrounding your competitors will be helpful in many ways, such as making sure you do just a little better than them with customer service.
- Customers – If you know your audience’s demographics, you can just ask them yourself. You can do so by forming your own social media groups, or by incorporating surveys targeted to certain groups consisting of your audience.
- Events – There are events online and off that are just for your industry and even for your particular small niche. Don’t hide behind your computer screen. Go to live events, go to online events, and participate in the community you will serve. It’s the best way to really know what they need.
Knowing what your competition is up to is an important part of staying ahead of the game when it comes to dealing with your niche today. You’ll be able to get an inside view and stay informed of what they’re doing. With that information you can take action in your own business in a way that makes you stand out enough to grab some of the sales.
Making Money with Your Niche
Once you’ve identified a particular audience and niche, you’ll be able to uncover many ways to earn money from that audience. After all, profitability is the most important component of studying everything up front. No matter how much you like the idea of the niche, if it’s not profitable then it’s not the right niche.
It’s important to know that while you should uncover all the ways to add value to your niche and all the ways you can earn a living from the niche, you shouldn’t jump into every one at once. Try to avoid having too much “shiny object syndrome.” Know for a fact you can monetize the niche before getting started. Then know that you can also improve your offerings over time.
Start with the Familiar
When you first start a business in a niche, it’s usually better to start with what you know. Staring with something the audience knows means you don’t have to educate them as much on the need for the product or service. Yes, there is competition, but that’s going to be true no matter what you do.
Just think for a moment about how many brands of laundry detergent there are. It’s more than likely most things that can be invented are invented; the only thing that is going to change is the method of delivery or from whom it’s delivered.
Even though you’re starting with the familiar, it’s important to figure out ways to add value to the offering. Can you add something to the tried and true to make it just a little bit better? Can you add something that the competition isn’t doing?
For example, if you’ve started a business in the pet niche, perhaps you can offer an extra product or service that your competition doesn’t. Let’s say with every order you include a little treat for the doggie or kitty that was not ordered.
Maybe you want to make a bundle of products or services together as one purchase instead of individual. For example, as a social media marketing manager you might want to offer a group of services as a complete package, instead of having them pick from a list.
When business owners see two choices of prices, they tend to pick the fixed price even if it initially seems larger. That’s because by offering them a set number of services, you’re taking the questions from them and making it easier. Plus, with a fixed price you avoid sticker shock.
Make It Personal
Can you make your offering more personal than the competition does? Perhaps you have a recipe website. There are many of them, but how can you make yours special? Is there a way you can personalize email messages for your audience? Perhaps you can personalize what they see on your website too.
A good example of doing something extra special and making it personal is what Justapinch.com did. They sent customized apron as a gift for signing up as a paying member. The apron had a logo for the website on it, and the receiver felt special getting something in the mail from a largely digital company.
Make It Easier
You don’t want your audience to have to work hard to take advantage of your offerings. For example, instead of asking for a name and email, just ask for an email address to get your eCourse, or make your website compatible with all devices. Remember their information; make it easy for them to click to buy.
Go look at Amazon and see how simple it is to make a purchase there. No fuss, no muss. People who sign up for an Amazon account give all their personal information to them. Amazon even keep an address book for people you give gifts to. Since they save your credit card information when consumers buy, you don’t even feel like you’re spending money.
Make It Bigger
Sometimes bigger is better, but sometimes just the perception that it’s bigger is better. Customers will pay for more if they perceive it as more. A good example is a VA offering a package of services instead of charging hourly. The VA wins if she’s created the package well because the faster she moves, the more she makes. The client wins because they’re not worried about a huge bill and they know how much they’re paying upfront.
Another example is to throw in an extra bonus that they don’t expect or that they choose at checkout. For example, you sell information products about diabetes management. A consumer buys your digital book about cooking to manage diabetes. You throw in a free recipe booklet along with their order.
Make It Special
People love feeling included, and they love feeling like VIPs even better. It’s a strange mix of inclusion and concern for potential exclusion that you can elicit by creating an inner circle, mastermind group, loyalty program or membership that is limited to only a certain number of individuals. Consumers will pay more to feel special and be treated like VIPs.
Even if all you are offering that’s private is a message board and the ability for the audience to ask questions of you easier through the membership, they’ll feel as if they’re included in a little secret. Throw in monthly teleseminars and they’ll stick around longer.
Whatever you can do to offer more, is an important factor in developing monetization plans for your niche. If you can identify the ways to earn money within your niche for your audience, you can create a number of income streams that makes your niche that much more profitable for you.
Craft a Long-Term Plan
A lot of doing business is about planning. Of course, without implementation the plan won’t mature. But creating the plan is part of the process of choosing a profitable niche. The plan will ensure that you know what you’re going to do before you jump in with both feet. If you can’t make a plan, it may not be a good niche. You should be able to generate numerous ideas.
What you need for your plan will include:
- Your Audience’s Buying Cycle – Most buying cycles look something like this: Consumer identifies a need, they educate themselves, they ask other people, they follow up on recommendations, and then finally they make a purchase.
- Your Product / Service Funnel – What types of products or services will you sell to the audience first? You’ll need to create an entry level product, the main product, and perhaps a continuity product that increases the lifetime value of each customer.
- A System to Check Metrics – Testing each new idea before you release it in full is a good way to test the market. Give away a free report that educates the audience about the problems and potential solutions. How many people sign up to get the information?
- A Marketing Plan – How will you get the word out about your services or products to your audience? Perhaps you’ll advertise on Facebook, blog, do interviews, and send out press releases and more. Write it all down in the plan.
If you’ve made it this far, then you have likely identified a niche that can withstand the test of time. Now you need to get started.
Now, Go Get Started!
Choosing a profitable niche takes a little advanced planning as well as insight to yourself and your audience. But, you can get started brainstorming today, and have a niche website up and a business started in just a few days of research. Here’s a summary of the steps to follow.
- Write down the audience you want to work with
- Write down one problem you can solve
- Come up with keywords
- Research the niche competition
- Grab Our FREE Blog Starter Kit & Start Your Blog!
- Fill blog with relevant content
- Collect email addresses with a freebie
- Develop the product or service
- Find affiliate products
- Market your product or service
Everything you need to do, boils down to 11 steps. Each step has a multitude of other actions that must be taken to be successful, but if you do the work in advance to determine the profitability of your niche, you’ll be more likely to succeed.
But, you won’t success unless you actually start!
So, what are you waiting for?
What are some other ways you’ve narrowed down your niche to ensure you were serving the right audience?
Please share in the comments below!