Starting Out: How To Identify A Profitable Niche For Your Business
Taking the plunge to start your own business is not without risks.
You can set yourself up for the best possible chance of success however by doing your research and identifying a profitable gap in the market.
Here are four ways to identify a niche for your new business.
1. Play to your strengths and know your potential audience
A logical place to start would be to look at your interests, hobbies or passions.
What do you have knowledge about that will give you the edge already?
Turning a hobby into a profitable venture is a great stepping stone to success as you are already invested in that area personally.
Research your potential audience and identify if there is enough demand to turn your passion project into a viable earner.
2. Check out the competition
There’s really no point in reinventing the wheel.
If the idea is already out there and being done successfully by others, you’ll need to determine if you can win some of that market share for your own new venture.
What are your competitors doing right?
And equally, what are they doing wrong?
These are important factors to consider and could help you identify your own unique value proposition that sets your similar product or service apart.
3. Look at trends and keywords
If your chosen sector is one with a lot of competition then you need to be ahead of the game.
Ranking highly on search engines is crucial so you’ll need to brush up on your SEO and marketing knowledge.
Do some research – use Google Trends to tap into search data.
This will tell you what people are typing into Google to find related products and services.
It will also show you emerging trends – those search phrases that are just starting to become more popular.
Do these relate to your idea?
Or give you any inspiration?
Set up Google Alerts for your particular niche so you can keep tabs on the market and track social media trending topics to see what your potential customers are talking about and what matters to them.
You can also contact organisations like the Office of National Statistics to conduct your own research without having to spend a lot of money.
4. Test your idea
Fail to plan and you’ll likely plan to fail.
Up to half of UK start-ups fold within the first five years despite all the effort, hard work and money that has been invested.
Testing your idea on a smaller scale will give you an insight as to whether you are on the right path with your aspirations.
Family and friends are the ideal guinea pigs as long as they’re willing to be honest with you.