How To Find A Niche

It's not hard to start an online business. You don't need to know how to code or design web materials. You can make lots of money online, you just have to know how. There are several steps and each step is giant in itself. This page and blog focuses on the first and most important step: Finding your niche. A niche is a specific product aimed at satisfying specific market needs. Laid out, on this page, are the steps you will need to take to find a niche market suitable for you and your future.

Step 1

Let me just repeat:

Finding a niche is the most important step in the process of starting an online business

Let's use an example to illustrate my point. Let's say you live in Bakertown and all it's residences are bakers and all the shops are bakeries (over 100000 bakeries). You decide you want to open a bakery in this town because you are a baker. So, you go to the bank, get a loan and open a shop. In 2 months, you are forced to close because you haven't sold a single item and your loans ran out.

I'm sure you're saying to yourself, "Why the hell would you open a bakery in a town with so many bakeries?" EXACTLY! Why would you open a bakery in a market that's so saturated? You wouldn't because you would have done your research.

The same goes for online business.

You would not want to enter a market that is so heavily saturated that you will be competing with everyone else because you sell the same exact thing.

The difference between a storefront and an online business is that the internet provides a cheap and easy medium to start that business. The costs to start online is a mere fraction of the costs for renting a store, having inventory, and hiring employees.

This ease of creation lures people in with promises of grandeur. I'm sure you've seen it: "Set up your site and make $1000 a day!" or "Make money blogging!". Those are both true but they leave out the part where you have to work hard and do TONS of research.

Let's continue with the baker example but move this one to an online business strategy. Let's say you are a baker and want to sell baking supplies. You don't have the money to have inventory so you decide to drop ship the products. With this method, you will have very little costs and it is easy to set up. After some marketing, your retail store remains on page 15 of Google and you have 0 sales.

Notice the missing step? This example does not include the research stage - finding a niche. Even though baking may be something you want to pursue, that does not mean it's a viable market. A quick Google search for "baking supplies" returns companies like Amazon, Williams-Sanoma and even Ikea. You do not want to be competing against giant companies like those, not to mention the other people who also wanted to start a baking supply store. This market is saturated and you would not want to enter it.

You need to pick a niche and refine it even more

Let's quickly regurgitate what the internet tells you about finding a niche.It's really quite simple, I can summarize it as:

• Pick a hobby
• Something you like
• An activity or an object (baking is our example)

What they don't mention is the market research that goes into finding one that will make you money. And let's be honest with ourselves here:

We start online businesses for the money. Might as well pick something we like.

I call it a business rather than blog because its purpose is to make you money. Don't waste your time working on something you despise (like a website about spiders), have fun while you work.

Let's continue with our baking example and go through the process of finding a suitable niche. There are many variables and you have to plan all of them to find a niche. We know that we want to do something with baking. The term "baking" is much too broad. A simple search in Google for "baking" returns 118 million results from recipes to cookware. This market is not something you would want to focus your business on. You want to refine your hobby to a small part of it.

A niche is very specific and does not satisfy ALL of the market...just one very specific segment of that market.

A niche market is a sub-market of a greater one. But, to find a good market, you need to find a sub-sub-sub-sub-market.

Baking - That's the category
custom cakes - A sub-category
sugar free custom cake - Almost a niche
sugar free fondant - A niche!
sugar free gluten free cakes - Another niche!
sugar free gluten free vegan cakes - A super micro niche!
vegan fondant - A niche!

Think about your market - it would be bakers or regular people who want to bake cakes but have specific dietary needs. Your online business could be a blog with recipes or a retail store that sells pre-made fondant product. Your niche would be sugar-free, gluten-free, and vegan products for the custom cake baker/decorator.

What you need to do is refine your hobby down to a small niche area like I did above.

Ready to take your business seriously?