Thinking about launching a business but don’t know where to start? Or want to take a crack at a new niche, but aren’t sure which niche to choose?
In this article, I am going to help you choose a profitable niche in 2018 and share some popular business trends.
Many entrepreneurs just don’t notice that the market needs something more modern or just different. Profitable niches are where demand is, and at the same time, the number of good offers is insufficient.
How to do this? Here are five steps that will help you:
Collect Information on Your Competencies
When starting to choose a profitable niche, answer three crucial questions:
What are you competent at? In what field do you have the most acquaintances?
What do you like to do? Most probably, a profitable niche is at the intersection of the answers to these questions.
Even if it’s difficult to imagine how all these things can be connected, don’t be hasty. You better draw a mind map with the answers divided into three categories.
- Competencies. Here you should write everything you are good at.
- Professional acquaintances. It’s necessary to form a list of people you know as real professionals in their fields.
- Interests and hobbies. Write out all things you are ready to spend your free time on.
For example, it can look like this:
This way, you will get a multilayered “tree.” Examine it and form a list of all business ideas that will come to your mind. At this stage, don’t limit yourself. Maybe it’s still difficult to imagine how to monetize a particular project. But it’s not a problem! During a further search, you will understand which of the ideas will be profitable.
Important! Save this list. You may need to use it again.
The list is created. Now you have to choose the most promising ideas. To do this, you need to make a table, fill in your ideas vertically and the main criteria horizontally. It’s better to assess them using 5-point grading scale.
At this stage, ideas are still subjective and reflect your vision rather than the real situation. How close your perception is to an objective evaluation will become clear only during a market review and, actually the testing of your ideas.
Every idea has a certain level of:
- Novelty (Does your idea have analogs? How close are these analogs to what you want to implement?).
- Demand (Is there a demand? Does this business theme solve a particular problem?).
- Potential (What are the chances that the idea will develop and progress in the future?).
- Competitive ability (Can it compete with others? What are its benefits?).
- Profitability (Can this idea bring a profit shortly?)
Important! You should remember to tread the market is carefully if you have entirely new ideas. If your concept is innovative, but the percentage of people ready to use your solution is low, you risk being left without an expected profit. And vice versa: the triter your idea is and the higher the demand, the fiercer competition you will meet and hence, the profitability can be much lower than you expect.
As the result of such analysis, you will get a personal map of hypotheses. At this stage, you will probably define leaders, namely niches that are worth closer research.
Review the Market
Having chosen a few interesting ideas (preferably from different niches), you have to do a small research to get a deeper understanding of the market.
Answer the following questions:
1. Are your potential customers looking for what you want to offer them?
You can check this with two tools: Google Trends and Google Keyword Planner. If nobody searches for your potential product or service, it means that you will have to form a demand, which is quite costly and very risky. You’d better put such ideas on hold.
For example, we can check how popular your trend is today and whether there is a certain tendency:
2. Who exists in this market and for how long?
To clarify this, it’s enough to type a search query, which your potential customers may also use to find a particular product or service:
If the primary market players exist for a long time, it will be difficult to compete with them on the level of authority and recognizability. It’s better to look for something that market leader still haven’t noticed due to their sluggishness. In this case, you will need to develop your business using guerrilla marketing.
3. How many key players are there and what is their competitive advantage?
To answer this question, use Similarweb tools (to review the primary indicators of competitors’ sites) and Serpstat (to understand promotional methods of your competitors and know your competitive advantage).
This is a report on the query "food delivery in New York."
And this is how a report on a particular competitor looks like:
Under “Pages with the highest visibility” of a summary report you can see which pages of your competitor are the most popular. Hence, it’s easy to suppose what products should be promoted.
4. Who is your primary customer?
In this case, the best option is to make a full sociopsychological portrait of your customer (choose criteria that may help you to create a marketing strategy, such as age, sex, place of residence, social status, average check per month, habits, interests).
For example, if your business relates to the delivery of food of a particular cuisine, the portrait of a target audience may be the following:
- Sex: Doesn’t matter (indeed, today both men and women can order home delivery).
- Age: from 25 to 35 years (This doesn’t mean that people over 35 won’t place orders. However, your primary audience includes young working people with a higher percentage of unmarried).
- Social status: middle-level workers (managers, freelancers) that live in New York.
- Average check per month: $40 for online food delivery.
- Habits: They log into Facebook twice a day on the way to work and home; check email every evening).
- Interests: New technologies/fashion, movies, modern music.
- Additional: Viber users.
Such a portrait will allow you to see what you should pay attention to while preparing a marketing plan.
5. How much and how often will your potential customer pay?
Forming a business model, you should remember that the frequency of purchases is one of the most critical indicators. What you consider to be a great solution, product or service may be less enthusiastically met by your audience. It’s better to understand this when you are looking for a niche or at least testing the chosen idea.
After you answer these questions, you should already understand:
- What do you need to start (material resources, staff, level of expertise)?
- How much time will be needed to achieve the desired result?
- What is your substantial advantage?
- And, most importantly, what is the "Achilles' heel" of your future business? As experience shows, absolutely every business model has its weak point. There isn’t always a possibility to eliminate it. Therefore, you should know about your weaknesses and protect them from possible competitors’ attacks.
At this stage, your list should be shortened to several ideas (preferably not more than 5), which we will cover in the next step.
Form Your Idea and Select Metrics
For the remaining ideas, create a business canvas. It’s a relatively simple method that will allow you to briefly and thoroughly present the core of your business. Canvanize is one of the tools that can help you with this.
At this stage, create a short 1-2 sentence resume for each business model.
Before moving to a direct check of the ideas, you can conduct an additional survey among your professional acquaintances. Tell them what problem you want to solve, but don’t reveal the primary mechanisms.
The best ways to get feedback are:
- Questionnaires (at this stage, Google Forms are the most recommendable)
- Social media pages
For example, it can look like this:
You must see that potential users are interested and ready to participate in the testing of a particular idea. At this stage, you can already get the first potential customers.
Prepare a questionnaire and use social networks to ask your friends to fill it or send the corresponding request to emails of people you know.
After that, prepare an initial system of metrics for your site. At first, there must be few indicators you should pay attention to.
The initial system consists of 3 blocks:
1. An information block about the user behavior on your website:
- The growth dynamics of the number of website visitors;
- Shares of different traffic sources (including data for different devices);
- The achievement of the set goals.
Google Analytics is the best tool for this task.
2. An information block for SEO:
- The general comparison of the indicators of your website with the competitors’ ones.
- The research of keywords that can bring you to TOP 10.
- The check of word combinations that competitors use for promotion through contextual advertising.
For this goal, use the following Serpstat features:
- Monitoring of visibility in search systems.
- Gathering data on the positions of keywords in search traffic.
- Gathering data on key phrases in contextual advertising.
3. A block of website usability:
- The most clickable elements of the website;
- The behavior of users on the website.
A Plerdy click map will help you with this:
Plerdy will allow you to see how well your users understand the website and which of its elements attract attention. That is precisely what you need to develop a sales funnel.
What is especially important at this stage?
- To get feedback from potential customers and make sure you can involve a small number of people to test ideas and have first sales.
- To form an initial system of metrics that will help you understand whether something changes. If yes, you will be able to see the pace of these changes.
After this step, we are moving to testing the idea.
Check a Niche and Test Your Idea
Lean Startup concept is the most painless way to test your idea. Its key point is that at each stage, minimum resources are spent (in our case, money and time) to understand if the chosen business model can survive.
A minimum viable product is used as a basis. In our case, it can be:
- An open platform online store
- A WordPress service website
- A landing page that presents the essence of an offer (a product or a service).
At this stage, the form of presentation isn’t as important as testing your niche and ideas.
It will take from 1 to 3 months to collect the first results. During this time, you will be able to understand whether your choice of a niche was a good one and what chances of further development your website has.
If the idea has fallen flat, return to the first step (the list of ideas) and take a glance at it again. Now, do you see new opportunities?
If you are planning to launch your own business in 2018, but have no ideas yet, it’s worth paying attention to niches with demand but still not too fierce competition.
1. Online education
English lessons, online marketing training, programming courses – everything that is in demand on the market can be realized as an online platform. Don’t forget about students preparing for exams, as this is also one of the interesting audiences in this niche.
2. Consulting services
You can find a lot of forums and sites with answers to different questions. But how to find a remote consultant you can address with professional questions related to rapidly developing fields?
Business coaching, Internet marketing, and SEO are challenging to puzzle out without preparation. Online consulting is one of the promising and still not too busy niches on our market.
Usually, this buzzword is used to talk about the transfer of software development to a third party, but the term isn’t limited to an IT field. Today, particular tasks of a marketing department can be outsourced. An assistant manager or even the technical support of a website can also work this way. An outsourcing niche still has a lot of unimplemented ideas.
Today blogging is more than a hobby. It’s a full-fledged information business. In this niche, many unaddressed topics are waiting for their opinion leaders.
5. A niche marketplace
Online stores are an inexhaustible business resource. It’s just important to choose your category of products. Don't copy online stores that currently have millions of turnovers, as competing with them for customers is useless. It’s better to choose a niche of goods or services that is still not taken by many businesses but has a demand.
Instead of an Afterword
Choosing a promising business niche remember that many ideas are worth to be implemented but are still waiting for their time and audience. Something that didn’t work yesterday can be a successful business tomorrow. Anyway, you should search and try. Note these five steps:
- Collect information on your competencies and choose interesting ideas.
- Individually assess these ideas and create a rating to implement them in the future.
- Make your own market review and check the most promising ideas.
- Make the idea more detailed and choose the system of metrics as well as tools to assess if the key indicators are met.
- Launch a test project to test your niche. Gather data and decide whether you should develop the chosen project.
On the way to one goal, you can discover innovative ideas and opportunities to implement those ideas. Have you managed to find your business on the first try? Great! If not, keep your head up! Experience shows that success is not from fate but the result of systematic and consistent work.