How to find a niche for business?
Any business begins with the choice of a niche. This stage is necessary in order to further determine the target audience and, accordingly, the marketing policy. The problem is that many entrepreneurs do not know how to find a niche for business, and they take up the very first idea they like. But to succeed, you need a more balanced approach.
What is a niche?
A niche is an area of the market that is potentially profitable and the development of which makes it possible to build a business. A niche can be either wide or narrow. A wide niche includes a large number of goods or services and has a large potential market. Narrow niche includes a small amount of goods, or even one, has a clear specialization.
Expensive imported cars.
Expensive imported cars of a certain brand.
Each item can be a niche. In this example, the first niche is the widest, and the last is the narrowest. Virtually any niche can be narrowed down on the same principle. A niche may include goods or services for both end users (B2C) and for business (B2B).
How to start choosing a niche?
First you need to determine the scope of the search. Make a list of interesting ideas, and then use the exception method to select the best ones. Well, if you manage to make a list of 50-100 potentially interesting niches. Let them be enough to freely choose, but not too much, otherwise the procedure will be delayed for a long time.
For consideration fit:
Areas in which you are well versed have experience;
Your hobbies and passions;
Products you would buy yourself;
Everything that you or your loved ones would like to buy in the near future;
Products that are in high demand (the level of demand can be found through special search engine services);
All other products or product groups that come to mind.
What niches deserve attention?
What niches deserve attention?
When you have a ready list of ideas in front of you, you need to select those niches from it that satisfy the following conditions:
Niche is profitable. If there is an opportunity to earn from 1000 rubles on a single transaction, then the product is quite interesting. To find out how profitable this or that product is, compare its retail price with the purchase price. If the potential profit from one product does not exceed 300-400 rubles, but there is an opportunity to sell several products at once, then a niche is also considered as interesting. Additional benefits to increase profits are: · the possibility of repeated sales to the same customers; · The availability of additional goods with which you can increase the check; · The possibility of selling wholesale lots.
This product is in high demand. You can find out if there is a demand in several ways: analyze the data of search engines, pay attention to the sales hits of various stores and actively advertised products. An additional advantage is the stability of demand. It is possible to work with seasonal goods, but then you should have several niches, which have sales peaks at different times of the year. For example, in winter you can sell coats and sleds, and in summer – beach goods.
This product is quite expensive. Selling expensive goods for $ 1000 and its cheap counterpart requires the same time and effort. In this case, in the first case, the profit will be much higher. The easiest way to work with goods that cost from 100 to 1000 dollars. More expensive products are in low demand and require a special approach to implementation. Cheap goods are bought spontaneously, the demand for them is hard to control.
In the niche there is moderate competition. A small number of competitors should not scare you. On the contrary, their absence should be alerted: probably there is no one in the niche, because it is unpromising. Greater competition is also undesirable because it will create serious obstacles.
You know where to get the goods. If you have in mind a manufacturer of goods or a wholesaler who agrees to work with you on favorable terms, this is a big plus. Many entrepreneurs find it difficult to develop a business precisely because they have to buy goods at high prices and be content with a small profit. If you yourself are engaged in the production of any goods, then such a niche should be considered first.
When your list of ideas has been subjected to strict filtering, and there are 5-10 ideas left in it, you need to try them out in practice. Post a couple of dozens of ads on the Internet or make a few cold calls to find out if people are ready to buy a particular product from you at a specific price.