Finding The Right Niche

nich market graphic

The first step in starting your online business is finding a niche, one that is big enough and has sufficient demand for products within that niche, yet small enough to offer the lowest possible competition. This must come BEFORE choosing a product to sell or starting your website.

It’s definitely a balancing act. Yet it’s an extremely important step. I contend that the one of the top 2 reasons why most online business entrepreneurs fail is choosing the wrong niche. This involves research and, possibly, a lot it.

Do not expect to research a market in 1/2 hour and jump right in to start a website. No business would do that, not brick and mortar ones or online ones either.

Here’s what you should do:

Step 1: Brainstorming

The first thing you should do is make a list of the things that interest you. What are you passionate about? In what field do you currently have knowledge? If you had a choice, in what field would you like to work? Don’t hold back. The list could consist of 5 ideas or 50 ideas. Keep working until you come up with many ideas. If it takes a few hours, that’s fine. Extra time now will pay-off later.

Once you’ve made your list, it’s time to narrow it down to the top 3 choices. These choices should be based on your knowledge (know a lot about the subject) and passion (you are passionate about the subject or at least enjoy it enough to want to make it a career).

Step 2: Research

Next comes the research phase, the step that should tell you the best niche for your business. You’ll take your top 3 niche choices and research them, compare the results, and choose the best one. If none of the top 3 prove to be a good choice, move down the list to your next choice, continuing until you find one that works.

What you’ll want to do is answer…

  1. How many searches are done online per month?
  2. What is the competition?

There are many tools available to allow you to research this information – some free, others are paid search tools. Some worth it, others not. My top 2 choices are Google’s Free Keyword Planner Tool, and Market Samurai.
Market Samurais is by far the best option. Here’s a synopsis of both:

  1. Google Keyword Planner:
    This is a free tool available at Google as part of their Adwords advertising system (more on this later). In the past, this was a free tool available to anyone. However, Google recently made some changes. Although it is still free, you’ll now have to sign up for Adwords, including creating an account, entering a credit card, etc. FYI, you never need to actually place ads or spend money, and going through the process is definitely recommended – as the information available is EXTREMELY useful.

    The tool will give you…

    1. Suggestions of keywords related to your niche
    2. The number of times those keywords are searched per month
    3. Competition for those keywords; that is,the number of advertisers bidding on those phrases
    4. The average amount of money advertisers are bidding for each keyword

    Your goal is to come up with a niche that has at the most searches per month with the smallest number of competing websites that appear for those searches.

    This step really does involve your judgement although there are numerical guidelines you can follow. Please note, the number of websites that are returned on Google after a search is NOT a good indicator of competition. When Google returns millions of web pages, many will be irrelevant, thousands will be part of one domain, and much, much more.

    Basically, you’ll have to dig much deeper to find out the true competition. This subject could be it’s own book and indeed, books have been written on the subject.

    The more competitive the niche, the harder it will be to make a profit. It is possible though, so if your passionate about the niche, then go for it. Just know you’ll be putting in more hours and more work to win at a competitive niche than you would for a non-competitive one.

  2. Market Samurai
    Market Samurai is an excellent piece of software that compiles information from Google and other SEO services into meaningful reports. It will give you 100’s of related keywords to your niche and let you know how competitive they are by analyzing the top 10 search results in Google for each keyword.

    This analysis is EXTREMELY valuable, and worth the purchase price alone. I use this software all the time, and HIGHLY recommend it.

    The software comes with a lot of tutorials to get your familiar with the stats and you’ll learn an incredible amount of SEO information just from their videos, whether you use the software or not.

    For more information on Market Samurai, CLICK HERE!

    Step 3: Analyze The Competition

    Here are the statistics you should gather for a good niche:

    1. A few keywords with at least 1000 EXACT match searches per month. this indicates enough people are searching to make it a good market.
    2. Many other keyword with between 100-1000 EXACT match searches per month.
    3. Less than 30,000 sites with the keyword in the title of the site and in the domain name. This indicates how many sites are actually trying to rank for this keyword.
    4. The fewer large authority sites for that niche the better. If there are over 10, you will probably not get to page 1 of Google.
    5. The fewer sites in the top search engine results with over 1000 backlinks the better.
    6. High competition from people paying for Adwords advertising for those keywords

    Basically, for a good niche, you want enough people searching to make it a viable market, yet fewer sites competing for those customers.

    NOTE: This is only a brief overview. Much more goes into analyzing the competition. You can and should learn more if you’re trying to start your own online business.

    Learn more about choosing a niche, how to go about researching, analyzing the numbers and picking the one with the most chance of success bychecking out this internet marketing guide.You can’t go wrong!

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