As a new business owner one of the toughest questions you'll need to answer for yourself is, have I found a good niche - a niche you are passionate about, know something about, and have a sustaining interest in? But that's not enough. A good niche must also be able to make you good money. Know the answers to these 4 things and you'll be off on the right foot toward determining if you've found a good niche.
Determining a good niche for your new business isn't as simple as you think it may be.
Defining what makes a niche good is the easy part.
A good niche is:
* one you are passionate about,
* know something about,
* have a sustaining interest in,
* can make a meaningful contribution to, and
* will make you good money.
Making sure you've found one is the hard part.
Why? Because it takes time to thoroughly research your niche to make sure it's a good niche for you.
As a business coach for women starting businesses, I know how important it is for my clients to find a good niche. Yet, so many women skip over this vitally important part in their hurry to make money. Effectively shooting their new business start-up in the foot.
I know women want to get their business up and going as soon as possible. I know they're often under pressure to do so from their husbands or partners. If you're a new business start up, I know that you're starting your business up on a shoestring, meaning every month spent in start up is a month without income.
To avoid shooting your new business start-up in the foot, know the answers to these four things and you'll be off on the right foot toward determining if you've found a good niche:
* Are you called to serve your niche?
First things first, do you feel a calling to do what you want to do? "I don't feel people get called to do something that doesn't have a purpose," says Samantha Hartley of Enlightened Marketing.
* Is there low competition?
Determining whether there is much competition in your field can be done a number of ways. One way is to go to the Widow website. Type in your keyword phrases and click "search." A non-duplicated list of businesses related to your keyword phrase is what you'll see. Look around. Take notes. Who else is already doing what you want to do? If you find that there are a number of businesses competing, take heart. You can find similar cluster searches that are more niche specific by checking out the left-hand column. Clusters for niche markets with less competition can be found by drilling down.
Next, head over to GTrends at the Wordtracker website. Type your revised niche keyword list and click "hit me." This tool will generate a list of key phrases that people search for and give you an estimate of the daily search volume from all of the search engines. Clicking on the bar graph icon on the right to see the trends for your niche phrases is most important.
* Will your business have strategic alliance strength?
Talk with people in peripheral businesses that would be most likely to refer business to you to determine strategic alliance strength. Samantha Hartley recommends going directly to them and asking, "I'm considering starting this business - what do you think? Would this be something that would add a substantive value to the customers or clients you currently service?" Listen closely to what they have to say.
* Will it pay the bills?
What do you want your business to be earning in one, two, and five years from now. What will your operating costs be? What hardware and software do you need to buy? What will be taken out in taxes?
How much product or service will you need to produce to pay your bills.
How much will it cost to produce your product? How many hours will you need to work? How much will you be able to charge in your market?
Running the numbers now can assure your business has the income you want, in the long run. If you do the numbers and see that you'll come out the first year making only $25,000, that might be okay if, when you project out to three years, you see that you will make $250,000.
One of the toughest things for a new business owner to do is take the time to determine if you've found a good niche. A niche you are passionate about, know something about, and have a sustaining interest in. But that's not enough. Remember, a good niche is key to making you good money. That's why it's so important that you don't skip the niche research step. Do these four things and you'll be off to a good start toward determining if you've found a good niche.
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