I’ve been talking about finding your WHY and passion to help you identify the right niche for you. But that’s just the first step.
Being passionate about your topic is not enough to build a successful online business. In fact, if you go ahead and build it (your website, product or service) you might find that nobody comes.
You also need to know if there are enough people in your chosen niche AND if they are willing to spend money.
Answer yes to these two questions and you are halfway there. But get it wrong and you could find yourself falling down one very deep rabbit hole.
Let me explain.
It takes time, money and effort to set up an online business.
You need a website with a great design. You must optimize it so it shows up in Google. You have to create content for weeks and months before your audience finds you. Not to mention the many hours spent learning about social media, traffic and conversions.
It’s therefore critical that you find a way to monetize your blog as quickly as you can.
But if you can’t get a return on your investment within 12-24 months, you don’t have a business. What you have is a very expensive hobby.
That’s why in this post I’m going to look at the WHO aspect of the 3 Ws I previously covered.
WHO relates to your niche and comes after you’ve worked out the WHY part. If money is an exchange of value, then asking WHO tells you which group of people can benefit from your genius.
First Discover Your WHY
To recap, discovering your WHY is all about you. It involves taking the time to go within and ask yourself the kinds of questions most of us avoid all our lives, such as;
– What makes me tick?
– Why am I here?
– What do I love to do?
– What do I want to be remembered for?
These are deep, penetrating questions and you may not have all the answers – yet. That’s why you should also consider your passion, hobbies, interests, talents, strengths and your professional experience.
They will lead you to your sweet spot or a subject you are drawn to, have an affinity with or natural aptitude for.
Too many people miss out this part and go straight to the WHO or WHAT.
But I believe building a sustainable, successful business that impacts the world has to be driven by your deepest motivations.
So don’t skip this stage – it’s important.
The next part, the WHO, deals with your target market or niche.
What Is A Niche?
A niche (pronounced like “quiche” if you are in the UK or like “rich” if you are from North America) describes a segment within a larger market.
In online terms, it usually refers to a group of people who have gathered around a certain interest, topic or idea.
For example, health is a broad market and there are millions of people around the world who are interested in health-related topics. Maybe you are too. But weight loss is a niche within health. It won’t appeal to everyone, just the people interested in losing weight.
Digging deeper, weight loss for diabetics is a sub-niche within the weight loss market that appeals to fewer people still – those with diabetes who want to lose weight.
Do you see how this works?
While there are many lucrative big markets you can play in, the key to profitability is finding the right niche for you. One that connects the things in your WHY with the WHO.
One of the biggest mistakes I see people making online in trying to be all things to all men (and women). They try and market to “everyone” but end up reaching “no one”. They are afraid if they niche down they will reduce their profits and limit the number of people to sell to.
But as Chris Drucker explains, going for a smaller niche can actually give your business more power. Unless you have a huge marketing budget, it is always better for small businesses to drill down and find a niche market.
The deeper and more targeted the better.
Finding A Profitable Niche
If you want to make money through your online business, rather than running an expensive hobby then it’s critical that you choose a profitable niche market.
There are literally thousands of niches out there, but not all of them are profitable.
So how do you choose the right one for you, especially one that you are passionate about?
The simple answer is to start with these 2 questions:
- Are there enough people with this problem?
- Will they pay for the solution?
In other words, you need to be sure the market is small enough so you can shine but big enough to give you a return on investment.
Too many people get carried away creating a fantastic product without checking if there is sufficient demand for what they have created. They also don’t consider if their specific audience is willing and able to pay for that product or service.
Even if you have a gut feeling that the answer to the 2 questions above is a resounding yes, it’s worth backing up your hunch with some science and hard data.
Here are 3 ways to find out if your niche is profitable or not.
3 Ways To Find A Profitable Niche
You need to see what is going on in the market you are passionate about, check if it’s big enough and there is enough demand. I recommend utilizing these 3 resources.
#1. Research Keywords In Your Niche
The first thing you need to do is find out which keywords your audience is using when they search for information related to your chosen niche market.
These words and phrases along with the number of times the terms get searched each month (monthly search volume) and the level of competition can help you understand the problems your audience is facing and the profit potential of your niche.
Until recently, Google provided an excellent free keyword tool that let you glean much of this data at a glance. Unfortunately it was replaced by the Keyword Planner, which is not as good but still has its uses.
Keyword research is a topic in itself so I will tackle that another day. But I recommend you check out the excellent overview provided by Ian Cleary from Razor Social for tips on how to use Keyword Planner correctly.
#2. Google Your Competition
If you want to find out if your niche is profitable, then you must make Google your best friend. Pop your keyword or topic into Google search and look at who or what comes up.
– Are there any established brands or players in your niche? Who are they?
– Do they have a website? What does it look like (colors, tone, language)
– What are they selling?
– Who are they serving?
– How much are they charging?
– Are there conferences or events around this niche?
– Are there any industry publications or magazines?
Such research will tell you if you have a potentially profitable niche and the competition you are up against. Many people are afraid when they see competition but this can actually be a good sign because it signals;
a) there is already a demand for the kinds of products and services you may be thinking about.
b) if your competitors are successfully marketing to the people you want to reach then your audience has the ability to pay for these products and services.
To get the full picture, it’s important to check both sides of the Google results page.
If you look at the example below for “weight loss diabetic” you can see there are a lot of listings on the right and in the pink box at the very top of the page.
These are sponsored listings, which is where companies have paid Google to advertise about their products or services. Below the pink box you have the organic search results that are ranked by Google in order of relevance for the search term. This content is pulled from across the web from news services, social media, websites and blogs.
You can see there many competing pages, over 19 million in fact. This tells me that on the one hand the weight loss market is buoyant with lots of competitors, making it very lucrative. But the extremely high number of competing pages in the organic search results suggest that it will be very tough to launch a new business and try to rank on page 1 for the term “weight loss diabetic”.
It may not be worth my time pursuing this niche or it could be that I simply need to find different ways to express my question.
By using phrases and longer keywords (long-tail keywords) like “weight loss tips for insulin-dependent diabetics” or “how to lose weight when you have diabetes” I may find that the results are more favorable and drop to below 1 million or even a few hundred thousand. This is the beauty of using Google before you invest too much time and money following the wrong path.
#3. Check Bestsellers on Amazon
Amazon is also a very useful starting point, especially the Bestsellers section in the Books and Kindle section.
Don’t just scan the list, look at the sub-categories and book titles and think about the kinds of problems they are solving. This will give you an insight into the pain points your audience is facing as well as ideas of sub-niches you can target.
If we take the weight loss example again, you can see that many of the books in this category offer recipes, specific diet plans as well as motivational tips to help people lose weight.
Taking the time to determine whether your chosen niche has enough demand and whether people will pay for a solution will save you a lot of heartache later on. Most people don’t do this but I’d urge you not to follow the crowd.
I recommend you keep an eye out for companies that provide products and services in the areas you’ve identified a passion in and take notes about their strategies.
Look at what kind of solutions they offer, who they seem to be targeting (divorced women over 40, empty nesters, young working professionals) and how they position their products.
Doing this kind of “homework” will give you the best chance of launching a business in a profitable niche that is aligned with your passions, interests and expertise.
It will also provide the best return on investment for all your efforts, help you build an audience and monetize faster than if you just dived in.
When it comes to building a profitable business, the sky is the limit. Your job is to identify your passion and connect that to a group of people you are passionate about serving and who are equally eager to pay for the value you offer.
The next step is to understand who is your ideal client and what drives them but I’ll save this for another day.
How About You?
Have you defined your niche market yet? Do you have any tips on how you have successfully researched a profitable niche? Please share and comment below.