How To Choose A Niche
I have come up with 7 basic questions that you should ask yourself when deciding upon what niche you want to build your business upon. 7 questions that will "dig deep" and establish a rock solid platform upon which your business can weather any storm.
Question #1: "What do I have a natural interest in?"
No doubt you have already identified things in your life you like to do. I want you to make a list of these things. In fact, only put on the list things that you really like or are passionate about.
I can understand if you hesitate in constructing your list. It may have been some time since you thought about a list like this. Most of us "get practical" with the work we do.
We select the best paying job we can from what is available. The Gallup organization did a poll not long ago that surveyed what percentage of people hate the work they do everyday. They found that 80% of people work at a job they dislike.
I think most people separate their lives into work and fun. We tacitly accept that work is not supposed to be fun. Somehow it is not work if we enjoy it. Our enjoyment in life comes from our hobbies or leisure time.
On this list I am asking you to construct, you want to put things that you enjoy doing. Things that you might consider a hobby. We are going to select your niche from the list of things you love to do. I don't want you to "be practical" when making this list.
You may be asking, "Do you mean my business is going to be a hobby?" Oh no, you are going to be working much harder in your business than you would ever work in a hobby...it just won't feel like work:)
Question #2: "What do reliable people tell me I have a special gift in?"
As you look at the list I have asked you to make, consider your childhood. In fact, think back to before you hit puberty (that's when many human beings get quite neurotic) and what people who loved you told you were "gifted in."
It may have been your parents, or an aunt, or an uncle, or even a teacher. Make sure it was someone reliable and loved you.Don't consider what the "knuckleheads" may have said about you...they are not reliable.
My mother was one of the "reliable" people in my life. Long before I was accepted to medical school she would tell me I had a gift with people. Her encouragement often came to mind when I became an adult and helped shape my self image. I believed her before being a Doctor became a reality.
Now look at your list that you compiled from question number one and shave off a few niche ideas based on what reliable people have told you your gift is.
Question #3: "What do people come to me about for advice or use me as a resource?"
Nearly everyone is a resource for somebody. There is a kind of univeral interdependence that is built into the universe. Why do people come to you for help?
You are competent in something. It is probably the same things that people seek your advice about. Did it ever occur to you that what you are competent in you have a special interest in?
We become competent in things that we have a natural proclivity towards. What is your proclivity...it is where you are competent and other people are seeking out your talent.
Once again, take a look at your list and shave off a few more items based on your response to question #3.
Question #4: "What are the needs of others that I have identified?"
The best businesses often meet a person or peoples needs. This provides a ready market for your business, is incredibly fulfilling, and is sustainable as long as the need exists.
A need that is renewable and urgent is also a good choice for a niche. Renewable needs mean repeat business and urgency increase conversions (or sales).
Take a look at your list...can you pair it down a little more?
Question #5: "Who is already meeting the need I have identified?"
UPS existed over 100 years before Federal Express was launched. The founder of FedEx looked at UPS and restructured the way small packages were distributed. As a result we have 2 very successful companies (there are actually several more) that serve the world.
The way we "restructure" our niche (that is already occupied by others) is through keyword analysis. Once you have a niche selected, perform a keyword search of it. I use Jaaxy as my favorite keyword search tool.
Jaaxy will allow you to search multiple variations of your niche very quickly. It gives you Google traffic, your expected traffic, competitors, and available domains. I have found that Jaaxy saves me at least 1 hour of work for each niche I research.
By simply restructuring the wording of your niche you are able to direct streams of web traffic to your website. You see, there is quite a bit of variablity as to the words that people use when searching for something with a search engine.
No single niche can include all the possible ways a certain service or goods are searched. By using Jaaxy you can narrow and restructure your niche to increase traffic to your site.
Keyword analysis is the major way that you obtain insight about your competition and the interest that people have for your niche.
Question #6: "Can I meet the needs in the niche I have selected more effectively than my competitors?"
The answer to that question is nearly always yes. By studying a competitor you will always discover ways to improve their service (which would now be your business model).
I never recommend abandoning a niche that is crowded.
Question #7: "Can meeting the need in my niche be monetized?"
The answer to this question is nearly always yes also. However, certain goods and services monetize better. Choose a niche that has optimal monetization potential.
Notice I put this as the last question. Most businesses fail through lack of the right effort on the part of the business owner. Businesses do not fail because of lack of money...money is the result of consistent, correct effort (or lack of consistency).
Money, like happiness, is the result of correct effort.