When performing the research on whether or not your latest idea for a niche market would be a viable business to enter into, we have to consider a few factors. You don’t want to jump right in and spend a lot of your time and energy without doing any research, because not all niches are created equal. Some just don’t make good business sense.
First of all, is there enough demand for this niche? Becoming the expert on a distant solar system, 27 light-years away, is probably awesome. It might be one of the most interesting things you could ever know, but if there only 16 other people on planet earth interested in the subject, it’s probably not the best niche to use to start a business.
Next, is there competition? Contrary to what common-sense tells you, competition is a good thing. The logic is that if the niche is sustaining several businesses already then there is enough demand for that niche. If there is no competition, either you’ve just uncovered a potential gold mine (that no one has discovered yet) or there is a reason that there isn’t too much competition.
More often than not, there isn’t enough demand for that particular niche (I was going to use underwater basket weaving as an example but it has 286,000 results in Google.) If there is no demand it will be exponentially more difficult to make a successful business, because instead of just giving people the information they want, you first have to convince them that they want that information.
So here are the five places I go to first when researching a niche topic to see if it’s a viable topic for a new business.
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Amazon
Amazon is a great first place to look to actually see there is any interest in the niche subject. You can start by doing a broad search in the books department and see what comes back.If you search for something like the internet and notice that there are hundreds if not thousands of results. That’s a good sign. As you start to go further and further into your little niche and still see pages and pages of results, that’s promising. Search for blogging and there are still massive results. Now search for a specialized topic like WordPress and there are still hundreds of books, now you’re on to something.
The other promising thing I hope to see when searching Amazon in my niche (the most specific niche topic, it was WordPress in the example above) is Dummy Books. Dummy Books have already determined that there is a market for that topic, paid an author (an expert) to write the book and is now marketing it. It’s an encouraging sign to see them.
Another thing Amazon has that could be useful is Bestseller Ranking. I don’t put too much weight into this because the top ranked books are mainly new fiction books that you wouldn’t really consider relevant to your niche research. Stick to the number of total books, number of niche books and if there is Dummy Books.
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Google
Google is the king of research, whether researching a topic or how much competition a particular niche has (and remember competition is good) Google is the best place to gather a ton of information quickly.You can immediately see how many sites contain your niche phrase. (I recommend typing in quote so you match the exact phrase, like 2005 Honda Accord had like 14,500,000 results but “2005 Honda Accord” had only, 8,300,000 (wait, only???)
With Google you can take a look at your top competitors, see what they’re doing on their sites, and gauge participation from their site visitors.
You also have to know where to draw the line. If you are targeting the niche “Business” you must think about who you’re competing against, Bloomberg, Google Finance, MSN, The Wall St. Journal, to name a few. It doesn’t mean can’t bust in and succeed but the odds are stacks against you when competing against basically bottom-less pockets.
This is why it’s so important to carve out your little niche. You’ll have a much easier time ranking for “personal investing advice for people over 55 but less than 62” then you would for “Finance”
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Bookstores
Another great place to see what kind of information people (potential customers) are spending money on is at the local bookstore. I just scan the magazine racks to see what the hot topics are.Chances are if someone made a magazine about a topic (or niche) they, hopefully, did adequate research to see that there is a market for that topic. If they are selling advertising (which is the where the majority of a magazine’s revenue comes from) there’s a good chance that there is ample demand for the topic.
There no hard data supporting this method, but if you scan the magazine racks and find Dummy Books on the subject then chances are there is a market for that niche.
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Infomercials
Believe it or not, infomercials that have been on for any length of time are making some money. If you have seen the same infomercial for months or even years chances are they is a hungry market for the product or service being sold.If you notice one of your niche business ideas has one (or multiple) infomercials selling that product or service you’re probably in a niche that can do well. Of course you must consider how strong the competition is in the space you are competing (like the internet or T.V.) to determine if you’re business can carve out a place.
The other thing I want to mention is that infomercials are like a living sales letter, they are (usually) brilliant in the way they market to people. They know their audience and then sell to them. So use infomercials as a model for how to sell your product.
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Your own passion and expertise
Lastly, I want to mention that your business after doing all the research, finding a niche that you feel should thrive, spying on your competition, studying infomercials to help formulate marketing strategies…After all that you still have to work at your business every single day. So find something you’re completely passionate about, something that you don’t mind jumping out of bed early, or staying up late to work on. This (almost above everything else) will shine through in your business, your content will have passion and your customer service will be awesome,
Why, because it’s something you love to do. If you pick a niche that you think has great money potential but you absolutely hate the subject matter you’ll have a much harder time sustaining the business because you’ll begin to loathe having to work on it every day. You’ll see it as a job and will quickly lose the feeling of freedom that being self employed brings.
One other thing I wanted to mention is your expertise and experience. If you are writing about something you know inside and out and you’re passionate about that subject, then you have a homerun.
Content will come really easy and you’ll love doing the work. Hopefully you’ll be able to support your lifestyle with your business so you don’t have to work at a “day job”.
That’s when you’ll get your first taste of freedom.
Enjoy!
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