At a certain point, many of us have the idea to work not for the “master” but for ourselves. And let the majority of us drive away this thought as an intrusive wasp, some of the most courageous and purposeful dare to change their lives. The easiest way to achieve financial stability, staying true to their ideas, is to start your own business and offer consumers quality services or goods directly, bypassing unnecessary intermediaries.
There is only one question left to answer: what exactly should we offer this world? And only the right answer can transfer you from the status of a worker to the status of a business person. So, let’s talk about finding a niche for business on the example of Nicholas – the collective image of people who wrongly approached the choice of goods. However, the problems they faced are quite real and are the reasons for closing most projects in the first half of the year.
4 universal tips for niche selection
Offer what you know
Nicholas looked with a little envy at his neighbor, who came back with his family from Egypt and chose a foreign car for his son at his eighteenth birthday. Nikolai asked himself a question: “It seems that we studied together, and those from the same social environment, but why can’t I make a major overhaul for the fifth year already, and he earns more in a month than I do in a year? Having carefully asked about the sources of income, I found out that bees bring profit to my neighbor.
Nikolay finds any information about this business in the Internet, in order to understand whether a person can convert pollen into new cars and travel abroad. It turns out, maybe, with proper turnover. And it is even profitable to open an online store specializing in the sale of honey. The next day, Nikolai takes a loan from the bank, buys hives, builds a small apiary at the dacha and settles it. The matter is done. Now you can come in a month, collect honey and enjoy life.
The first visit to the bee farm, or rather its ruins, disappoints Nikolai. Who knew that bees are afraid of cold weather, wind, rain, bacteria, mice, birds. But the neighbor knew that bees were afraid of cold weather, wind, rain, bacteria, mice, and birds. He helped his grandfather at the apiary from childhood and for many years accumulated facts about the life of bees, at the same time soaking up love for these shaggy insects. That is why his business, though it started as a hobby, gradually became his main profitable activity. And Kolya before that, the bees were seen only in the picture.
Conclusion: the chosen niche should be:
- is clear to you. When searching for a niche, focus on your own experience and knowledge. Doing business is quite a multifaceted process, which will take you all fifteen hours a day. You will not have time to thoroughly understand the nuances of the products sold.
- It is interesting for you; Business is not done in a week. During the long and painstaking months of work, it is important that your chosen niche is not tired, because any enthusiasm has its calendar limit.
Take care of the demand
Having survived the disappointment caused by the collapse of medical procedures and having paid all the debts to the bank, Nikolai understands that the lesson was costly, but it is foolish to quit halfway through. The decision was made to base the business on what is interesting and what has certain skills.
Nikolay was well versed in fishing rods and gears. So he began to promote this very product. Going out to China, ordering the first batch. Filling the site.
Failure again. Locals who see the river once every few years (because it is 100 kilometers from the settlement) somehow refused to buy hooks, despite the fact that they were quality and cheap.
Conclusion: The chosen niche should be in demand among the target audience and have financial potential.
To determine the demand, you can use Google Adwords. This service shows how many people have requested a specific keyword in a search engine for a certain amount of time. If in your region there were only 50 requests to “buy fishing gear” for a month – this niche is definitely not suitable.
At the beginning of a business career it is most appropriate to choose the goods and services that are in demand for a long time. These include:
- foodstuffs. Basic and inexpensive products are sold well. Forming a niche for an elite target audience requires serious financial investments and advertising, which is often not affordable for a beginner entrepreneur;
- clothes. It is also worth mentioning inexpensive and quality things, such as those that buy a lot and often. It is necessary to notice that the average sum which people are not afraid to spend on clothes in Internet store, seldom exceeds 2000 grivnas. When selling at an offline point of sale, this figure increases;
- building materials. A universal and promising niche, which has a good prospects for development;
- legal, medical, cosmetic and educational services. A good niche for people with relatively small start-up capital. Requires appropriate specialization and practical skills;
- medicines for people and animals. Unfortunately, everyone is sick, but it can make a good profit.
When choosing a product, also pay attention to geographical coverage. For example, in small towns and villages, veterinary products and services are often in demand, while in the larger ones it is easier to start a restaurant, tourist or manufacturing business.
It is not recommended to bring to the market a completely new product. Such experiments are allowed if you have an established production and a constant financial income. Then failure will not have a devastating impact on your budget.
An important indicator of the survival of the product is its seasonality, which determines the total amount of profit. Will your product bring annual revenue in just a few months (Christmas tree toys, fireworks, water skiing), or give a smaller income, but throughout the year. Beginners are advised to choose a more stable, second option.
When choosing a niche, keep an eye on competition
Having learned the previous mistakes, Kolya decided to deal with automotive parts and components. He knew about it, and every second citizen had a car that breaks down stably once a week. Kolya for the third time reshaped the online store, ordered a batch of goods and prepared for a boom in sales.
The boom did not happen. No matter how Nikolai tried, his web resource did not rise above 10 pages of the search engine. It turns out that he was not the only one so smart noticed that the settlement is full of problems with transport. A cursory Google search showed that there are more than 20 such regional auto websites open. Nikolai spent a year fighting with competitors, but eventually lost, because the revenue did not cover even the advertising costs.
Conclusion: When choosing a niche, it is important to assess the initial capital. This will be helped by a properly implemented business plan, which takes into account the costs not only for the purchase of goods and legal issues, but also for site promotion. It is also necessary to analyze the competition, to correlate the number of firms already working in this area with the total capacity of the market. Beginners are more rational to start their business with a small geographical coverage. It is easier to analyze and calculate the product, which will bring potential profit with minimal risk.
Paying attention to competition, it is worth dividing the sales markets by:
- consumer, where the customers are ordinary people;
- corporate, where your services are used by the same entrepreneurs as you.
Usually, the competition is denser in the consumer segment. In spite of this, it is recommended to start your business from this segment. Although the second type of market is characterized by high turnover (often), but the peculiarity of corporate (B2B) business is to establish longer relationships, where reputation plays an important role.
Will the chosen niche be able to form a unique offer?
Nikolai already understands the basic principles of choosing a niche, but not unreasonably suggests that his knowledge is not enough for practical application. By contacting an Internet marketing firm, he discovers the missing link to a full product launch – the so-called “impressions” sphere. It is not enough to find a promising, understandable and interesting product in a moderate competitive environment. It is also important to be able to present it correctly. The requirements of modern consumers are growing day by day. A quality product alone is not enough to get around competition.
Thus, the chosen niche should not only meet the needs of the potential buyer, but also have a tendency to improve and customize.
So, if you choose the right product, before launching it, decide whether you can significantly differ from your competitors. You should not rely on such positions as:
- reasonable price;
- qualification of employees;
- fast delivery.
These criteria are so mandatory that they are considered by any of your competitors, you need to come up with something original. For example, to meet the needs of a narrower CA. Instead of selling food online, you should only sell organic food. A good way to distinguish yourself is to combine services or goods. For example, buying a TV+free installation, or buying a computer+free operating system. There are many options, the main thing is that they distinguish your products from those offered by your competitors.
In the end, luck smiled at Nikolai. Using all his experience, he still managed to open a profitable business – a veterinary drugstore. This niche was familiar to him, had the financial potential, moderate competition and the opportunity to implement a unique proposal.