What is a niche?
A niche is a business concept that describes a specialized area of a broader market that allows companies to differentiate themselves and their product or service offerings from their competition. Business owners often identify their niche by assessing their strengths and passions. To locate the right niche, they may complete a certain job or offer a specific product that aligns well with a specific segment of the market. They can then continue to sell to that market and improve their offerings. Niches often have a lot of market potential but are fairly unknown. Some examples of a niche might include:
Environmentally friendly clothing shoppers
Budget-conscious pet owners
Athletes seeking life partners
How to find your niche
Here are five steps you can take to identify your niche:
1. Examine your interests and strengths
The first step to identifying the right niche involves determining your interests and abilities. Think about what you enjoy doing when you’re not working or if you’d be willing to earn income from your hobbies. For example, if you already enjoy designing games, you may be able to identify a niche within the gaming industry. In addition, consider your skills and experience. You may have training or educational credentials in a specific area that may make it easier for you to identify potential niches.
Consider the areas where your interests and strengths overlap. For example, if you have an interest in selling personal hygiene products to customers and you have culinary skills, you may consider using some of those skills to create more visually appealing soaps, even if you don’t expect your customers to eat what you create. Keep a list of potential business or career ideas based on your skills and passions
2. Evaluate your options
From your list of interests and strengths, consider the option that’s the most likely career choice for you. It’s important to remember that starting a new career may require making significant changes in your life, so try to choose the option that you’re passionate about and that you know you can do for a long time. While you may have several passions, it’s also important to remember that not all are likely to be sustainable.
For example, you may enjoy making pottery and possess experience creating plates, bowls and teapots, but discover that you can’t afford the expenses associated with maintaining a pottery wheel. You might instead consider cheaper alternatives to making pottery with a wheel, or you might decide on a different career altogether. Knowing what’s feasible for you may help you identify niches more quickly.
3. Analyze the market and competition
In addition to identifying your passions, it’s important to analyze the market carefully to determine if there’s a particular need you could fill related to your skills and interests. Research the market demand for your intended niche by searching online, attending local trade shows and reading online forums. For example, if you have an interest in developing a certain style of a video game, consider reading through gaming websites and forums to determine if gamers have an interest in your potential product.
Consider the supply and demand for similar products or services. Ask yourself if there are already companies or professionals offering the same or similar products or services as your intended market. Consider areas of the market where there are fewer buyers. In addition, think about whether your skill set might be competitive in the marketplace. You may be able to identify specific skills that you can leverage to provide value to an entirely new market.
4. Identify a profitable niche
Spend some time examining your preferred target audience to determine whether there’s a high enough demand for your service or product to sustain you for a long time. You can assess this demand by searching for words or phrases related to your niche and evaluating the level of competition and search volume in greater detail. To determine the most profitable niche for you, consider the following:
Whether your target market is online or in person
What issues your target market regularly experience that you could help alleviate
What specific interests do members of your target market possess that you could support
Whether you prefer to work with businesses, individuals or agencies
5. Test your ideas
After completing your market research, you can begin testing the products to determine if your target market is receptive to them. Think about how each product is unique and brainstorm the best way to communicate your offering to your market. For example, you might decide to create a website or design a business-oriented social media profile. It’s often useful to revise your marketing strategy and product or services to better meet the needs of a changing industry and market.
Even after identifying a niche, it’s important to continue to improve your offerings. This may include attending seminars or working with a mentor to examine new product or service ideas. In addition, consider asking for referrals from customers or creating an industry group that similar individuals and companies can join. Periodically assess your niche to ensure that you’re providing products or services that offer value. When developing new products or services or improving your existing offerings, consider engaging in the following:
Attending local markets to sell products and assess interest
Surveying your audience using online surveys or questionnaires
Developing a landing or lead page and advertising sign-ups to potential customers
Asking friends and family to test new products and services and provide you with feedback
Mailing review samples to influencers or discount coupons to new customers.
Ensure that your customers are accessible
In considering your niche, ensure that its potential customers are easily accessible, meaning you have the ability to sell them products or services without significant budgetary concerns. While it’s important to choose a niche that’s not too competitive, it’s also beneficial to avoid niches that are too small to be sustainable. For example, you might develop a useful product for monks living in a remote area, but your market is likely to be small and difficult to access compared to someone who sells products to multiple types of monasteries.
Research the niche
Once you identify a potential niche, research it to determine what marketing or branding strategies similar companies within that niche are using. Consider how you might further differentiate your offerings in the market and how you might employ your creativity. In addition, spend some time analyzing the social media profiles of potential customers within your niche to help you develop more relatable content.