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Before you get started running your own business, you need to consider two things:
- Can you offer something that people are willing to pay for?
- Is there room for you in the market?
In other words, you need to find your niche. You can find it by following these steps:
- Think about your values and skills.
- Do market research.
- Research the competition.
- Test your idea.
What is a niche?
In marketing, a niche is a specialised part of a particular market. Most businesses try to appeal to a specific niche to narrow their focus, appealing to a smaller number of customers with a specialised product or service.
Most markets can be broken down into different niches. For example, if you look at the car industry, you can break it down into smaller niches that tend to be dominated by a few companies.
- Luxury cars: like Roles Royce, Bentley, Cadillac.
- High-performance cars: Porsche, Ferrari, Lamborghini.
- Executive cars: BMW, Mercedes, Jaguar.
- Sport Utility Vehicles (SUV): Jeep, Land Rover.
- Eco-friendly cars: Toyota, Tesla.
- Family hatchbacks: Ford, VW, and Citreon.
Of course, some of the companies listed above cross over into other niches. For example, Audi makes both high-performance cars and family hatchbacks.
Also, some companies create their own niches by combining different parts of the market. For example, Tesla was the first car company to mass-produce a high-performance, eco-friendly car.
Think about your values and skills
Finding your niche starts with looking at your values and skills as a business owner. It would help if you focused on an area that you’re both good at and interested in. After all, starting a business isn’t easy, so centring around your values and skills will give you the extra motivation to go the extra mile when things get more difficult.
To help you figure out the right direction, use your own experience. As yourself things like:
- What are you good at and what do you enjoy doing the most?
- What special skills have you developed through your work?
- What’s your training or education in?
- What would you do even if you weren’t getting paid for it?
- Are there common issues you’ve encountered that nobody is addressing?
There are some exceptions to this rule. For example, you might not be passionate about a particular industry, but you could still be passionate about improving a certain aspect of that industry.
Do market research
Skill and passion aren’t enough of their own. There needs to be enough demand and space in the market for you to build a business around a particular niche.
Market research will tell you whether or not there’s enough interest in your idea that you could find enough customers to support a business long term.
Start by searching keywords with tools like The Google Keyword Planner and SemRush.
See what related words are suggested in relation to your niche that will show you what people are looking for.
Next, refine the search by looking up specific terms that describe your particular niche, then you’ll see results for competition and search volume.
Search volume tells you how often the term is searched over a period of time. It’s normally best to track search volume on a monthly basis. A decent search volume will let you know there’s a demand in the market. Somewhere between 1,000 to 10,000 searches per month is a healthy medium.
The keyword tools also show you how competitive a keyword is. Again, you might struggle to find a place in a market with too much competition. The ideal situation is to find a highly searched keyword that’s not too competitive. If there’s no competition for a keyword, that might imply there’s no market for that niche.
Alongside keyword research, you can use social media sites like Facebook, Twitter, or Reddit. Find pages and threads with people discussing your niche. Note what issues and questions keep coming up in relation to the industry. If there are many people with similar unsolved problems, it’s the perfect place to fill a gap in the market.
Research the competition
Following your market research, you should research the competition for the niche you’re considering. Start by Googling the keywords you’re considering to see what appears on page one. When you search, you’ll find one of three things:
- Lots of popular sites ranking for the keywords, meaning the niche might be oversaturated. It could be difficult to compete.
- Very few sites ranking for the keywords. It could mean there’s an opportunity, but the fact that there are so few could mean there’s just no market for it.
- Some smaller sites ranking for the keywords with little paid advertising. This is your best bet. It suggests there is demand, but there’s not too much competition.
If you’ve found a niche market with high demand and little competition, start researching your competitors. Find out if there’s anything they’re not offering of you could do better yourself; these will help you produce your unique selling point.
Test your idea
Research is essential, but you won’t know if you’ve found the right niche until you test your idea.
Start by reaching out to friends, family, and other acquaintances to see if they’re interested. You could get some good feedback and, hopefully, some sales.
Crowdfunding is another way to get some validation. Set up a page on sites like Kickstarter to request startup and development funding. Funding from the public shows there is definite interest in your niche, and some extra money never hurts.
Finally, you could set up a business website and gauge the amount of traffic you receive. Alternatively, if you don’t want to go all-in on a website, you could just set up a landing page on host websites like Leadpages.
Take care of your finances with a simple app
Finding your niche is an important part of running a successful business. But once you’re up and running, financial management is equally important. That’s why thousands of business owners use the Countingup app to make their financial admin easier.
Countingup is the business current account with built-in accounting software that allows you to manage all your financial data in one place. With features like automatic expense categorisation, invoicing on the go, receipt capture tools, tax estimates, and cash flow insights, you can confidently keep on top of your business finances wherever you are.
You can also share your bookkeeping with your accountant instantly without worrying about duplication errors, data lags or inaccuracies. Seamless, simple, and straightforward!
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