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Choosing a niche for business - how to do it and not make a mistake? How to choose a niche for business: step by step instructions Competitors of a profitable niche.

Text by Irina Nikitina

Photo by Pixabay.com

Choosing a niche for a business is one of the most difficult challenges in the life of an aspiring entrepreneur. The topic is shrouded in doubts and anxieties. We will analyze five difficulties, and you will see that they should not be afraid.

You can do better, but you don't know what

You want to start a business. For a year or even several years. You have come a long way in studying case studies, success stories, examples of business models and ideas. You read educational articles, watch business seminars and follow the success stories of people who have decided on their own business and successfully develop it.

And then you realized that you can do the same, and maybe even better. And, most importantly, you want it. You even have mentally prepared some strategies that begin with the words "And I would do this ...". This is cool.

There is only one problem: the niche has not been chosen yet.

Choosing a niche for business: what stops

1. I need a million dollar idea

Innovation is a definite advantage. For real creative ideas are valued on the market, but appear very rarely. It is not clear how then everyone else builds a business.

Watch out for successful companies: many of them did not invent anything ingenious, but only invested in a simple idea new meanings.

Don't worry about the lack of creativity. Sometimes the key to success is not originality at all, but an offer made to the client on time or meeting his needs right now.

And do not think that all the models are already taken, and the ideas have already been sorted out before you. This is wrong.

Competition is not something to watch out for

2. I need a competitive niche

You monitor potential competitors, and from "We've been in the market for 10 years" headlines and stories successful projects darkens in the eyes. Yes, they are hard to compete with. Probably, it is worth stepping back, closing the tab and starting to look for a model in which there will be no competitors. But the problem is that there is no such model.

The good news is that competition is not something to watch out for. You can learn from opponents, notice the good and bad sides, analyze the target audience. Often, high competition in the market is the key to the profitability of a niche.

3. I want to do what I love, but my hobby will not bring income.

If you think that no one is interested in your hobby but you, perhaps this is true. But what if the world just doesn't know how much your product needs? You won't know until you check.

There are many beautiful profitable projects based on hobbies. Business must necessarily include a competent approach, great determination and a thirst for results. And you can combine all this only in a business that ignites you. If you really believe in what you are doing, then good packaging and positioning will help you.

Business is a lot of opportunities that you can't get anywhere else.

4. I want to develop in different directions, but the choice of one niche fetters me

As a child, you went to a dance ensemble, drew, learned English and wanted to sign up for wrestling, but your mother did not allow it. It has always been important for you to cover as many areas as possible. Now you have grown up, but you still want to know and be able to do as much as possible, while devoting time to your family, having hobbies and developing spiritually. It doesn’t fit in my head how this can be ensured if you choose one niche.

Think about how impossible it is to become an expert in all areas, and by spreading yourself across a bunch of different areas, you will not become a professional in anything. At the same time, the choice of a niche is not a limitation. Business is a lot of different opportunities that you can't get anywhere else. Try to start, and you will see how many-sided experience you will gain.

For good result have to do a lot of unfamiliar things

5. Before choosing a niche, you need to calculate the market

If you're serious, you'll certainly need to do audience research, trend assessments, customer needs research, and more. This is very important points and they scare a lot of people.

Yes, for a good result, you will have to do a lot of unfamiliar things. But these things should not scare you and serve as an excuse for procrastination. Don't bother with complicated things, just get started. In 2018, you can become a businessman simply by launching a website or blog.

How to start a business

SuperStart online course is a two-week program from Womenbz.Education to start a business from scratch.

You will find a business idea based on your competencies, choose a niche, analyze the market and competitors, evaluate your audience and create a business model.

At the planning stage entrepreneurial activity it is important to choose the right path.

The concept of a business niche - the basics of successful management

Literally, a niche is a recess in the wall. Globally - a zone of convenience. In the economy - a free place where the entrepreneur will be able to realize the plan.

The task of a novice businessman is to choose one in order to find clients.

Niche Requirements

Arouse interest among those who cannot find a service in the proper volume on the market.
Demand
Being free is targeting a specific target audience that has an unmet need for your product.

These criteria guarantee the profitability of the business.

When a person wants to do business, he looks for ideas for implementation, focusing on what surrounds him. The first plans are associated with current activities:

trade in products, things;
restaurants, cafes;
shoe repair, tailoring;
pharmacy.

It's easy to navigate - follow the standard selection algorithm: narrow the search to a minimum. Example:

Segment (confectionery).
Category (cakes).
Nisha (wedding).

The narrowing should be maximum, then things will go more efficiently. Impress the young with sweet figurines of the bride and groom for decoration.

What is the best area to open a business?

Not all branches of private entrepreneurship are profitable and in demand.

Those who have achieved success remember how they started from scratch, looked for options and ideas, rejoiced at the first money they earned. In many ways, their professional growth was successful due to the correct understanding of business processes: someone was based on intuition, the other - on experience.

Find five directions for yourself possible activities according to the algorithm for choosing a particular niche. Check the idea for viability. At this stage, you will have to work hard.

Market research

Demand for products is driven by constant need it has a large population. The buyer must want to spend money on the product, and the more he is willing to give money for it (with a minimum investment), the higher the profit will be.

Look at the chosen direction from the side of the buyer - are you ready to spend money on this idea. Talk to friends, relatives - make a list of priority needs for them. Get an opinion on the importance of the chosen way of earning.

Demand and competition analysis

Enter the name of the service in the search bar of the browser - you will understand the approximate number of enterprises that are engaged in a similar business, and evaluate the circle of potential buyers. It is useful to get acquainted with analytical data on a certain type of business, which is published by many authoritative economic publications.

Practice

Check the work of the conceived idea on the test group. It can include relatives and friends. If you want an unbiased assessment, offer a product to a dozen random passers-by or inquire about possible cooperation with companies that, in your opinion, can become customers.

Do not be discouraged if, after carefully developing a business idea, you have to look for other unoccupied market segments. An in-depth analysis of your own creative potential will help with this.

How to determine which business niches are not occupied

According to statistics, promising vectors of entrepreneurship for Russians are:

Services: accounting, legal, repair.

Very often, many of us come up with the idea of opening our own business. And really, what could be better own implementation? However, the problem for most is that they don't know how to choose a business niche. After all, it is very important that the business you will be doing is not only interesting, but also profitable. What is a niche and how to choose one?

We are looking for a niche competently!

A niche is a place in the market that has not yet been occupied by anyone or a small number of companies have occupied it. Free niches for business are an opportunity to realize yourself and show your advantages over other competitors. At the same time, the scope of your interests needs to be narrowed down so that you can really create a product or service that can compete with others and at the same time be popular with the target audience. Most novice businessmen do not take into account the peculiarities of the market, do not explore it, and therefore they are faced with the fact that they are investing in places where everything is already occupied and it is very difficult to compete.

Business is an investment

On the other hand, it is worth remembering that you will have to invest in any business niches, and considerable ones. If you don't have start-up capital it is almost impossible to start your own business. Minimum amount, which you must have, should be 3000-5000 dollars. But money is not the main thing if you do not know how to manage it and invest it wisely. Remember that your level of income will depend on how well you invested in your business. Choosing a niche for a business should be based on several rules:

First, the business you plan to do should bring you pleasure;

Secondly, the niche must be in demand and useful for society;

Thirdly, your activity should generate income, so you should choose something that is not yet in demand, but at the same time it may be useful and interesting for a potential consumer.

How to choose a niche for business?

Before you should carefully study the market. This will allow you to timely calculate whether your undertaking will be unprofitable. There are a few things you need to do to find the right job for you:

Create a wish list, that is, outline the range of your interests, the clients they are focused on.
Analyze the state of the market from the point of view of the consumer. In this case, it is important to study the various business projects in detail before choosing the right direction for your activity.
Before choosing a niche for a business, you should correctly assess it and test it, and for this, high costs are not at all necessary.
After choosing, you can already begin to implement the idea that you like the most.

Potentially profitable places: where to go?

When choosing the area of your future activity, start from the fact that fresh idea is an opportunity to create a successful business. Of course, there is a list of business niches that are popular with aspiring businessmen. They can be grouped as follows:

Online stores through which you can sell various categories of goods.
Online charitable stores or commission outlets.
Proposal of the services of nurses, nurses, governesses. Today this niche is quite in demand. You can, for example, open your own agency that will help people find the right staff for them.
Bureau of consulting services.
Handyman services.
Tutoring.
Services of a fitness trainer.
Various services in the field of hand made: jewelry self made or knitwear. Is this not a way to please yourself and at the same time earn an extra penny?

Of course, these are not all business niches that you should pay attention to. promising ideas it is always full, the main thing is to catch one of them and start implementing it.

Deep analysis is the key to success

However, no matter how promising your idea may seem, you should clearly understand that it is far from a fact that it will be in demand. That is why experts advise you to start building your own business by studying what niches of the business are not occupied. For example, the Internet sphere is just beginning to develop, representing huge opportunities for earning. But there is one important “but”: you need to be able to earn and invest not only money, but also time and effort. This is the only way to get results.

Another interesting and actively developing area is logistics and cargo transportation. True, it is unlikely that women will want to engage in such activities. But they can always find a job for themselves. For example, those who know how to do something with their own hands: sew, knit, embroider - can simply create unique things and sell them. Of course, this requires perseverance and time, but you can create good conditions for stable earnings.

Get educated and work from home

Many are wondering how to find a niche for a business. To do this, you need, firstly, to proceed from your preferences and interests, and secondly, to know the needs of the market. Of course, not every one of us can boast of a sociological education and the ability to correctly assess the situation on the country's market. But an analysis of the preferences of many people suggests that the areas in the field of health are most in demand today (these are cosmetology clinics and offices, and fitness centers), relationships between parents and children (for example, you can open a private kindergarten or studio visual arts), business and money (from creating websites and promoting them to issuing microloans on favorable terms).

Many women, going on maternity leave, are looking for a way to earn money and start baking cakes, for example. Probably, in many cities there are such craftsmen who are ready to indulge in delicious products for any festival. Why not a niche for business development?

And if your hands grow from where they need to, and you know how to handle various materials and tools, try yourself in the field of creating designer toys or original jewelry. Today, when there is a tendency to return to the past and interest in handmade things is high, these niches can become quite competitive. And if you also have your form style, you can be sure: your business will go uphill!

Many professionals dream of moving from wage labor to own business- Start your own bissnes. Good thing that modern technologies allow almost everyone to provide services or sell goods both offline and on the Internet. The question arises of choosing a niche for business.

What is the first thing most people do? - Searching the Internet for business ideas.

This is a failed strategy. If you consider starting your own business as a means of escaping reality (for example, the country is in a difficult economic situation, or your specialty is not in demand on the labor market), your idea may fail.

When opening a business, it is important to develop in yourself 3 key qualities entrepreneur:

I. Be prepared to take risks.

An entrepreneur is, first and foremost, a person who operates under conditions of risk. All categories of the self-employed population, which can be called entrepreneurs: merchants, farmers, artisans, one way or another take risks. They buy at a known price and sell at an unknown price.

This is one of the first concepts of the concept of "entrepreneur" by the English economist Richard Cantillon.

Yes, it's a profession!

Like the profession of a doctor, an artist or an engineer should be taken seriously.

II. Be persistent. Perseverance keeps you moving forward despite setbacks. We wrote about 5 ways to be persistent.

III. Be techy.

So, let's move on to the technology of choosing a niche.

Niche selection technology

Don't start with someone else's business idea.

And do not start with your own business idea, even if it seems brilliant and terribly promising to you.

Look at the business through the eyes of the market.

After all, an entrepreneur is a profession aimed at satisfying the needs of customers and at the same time making a profit for themselves.

That is why key to success in building a business right choice niches.

A niche for business is a foundation, the reliability of which will support the entire further existence and development of a business.

What is a niche in business?

A niche is the difficulties, problems (“pains”) of potential customers that you, as an entrepreneur, need to solve.

When you open new business, first of all, it is important to carefully evaluate the market, its capacity, competitive environment and composition (conjuncture) - who, what, how and for how much sells.

Often the arrogance of many entrepreneurs is expressed in the fact that they choose a niche based only on their own opinion and understanding of the market. Without any research.

But. If you do not conduct primary market analytics, then you are completely not protected from risks.

As a result, after some time you will realize that the niche is not in demand.

Ask yourself and your companions 5 basic questions:

1. What do I like and what do I want to do?

You need to love your job, because over time: problems, difficulties or banal instability can get boring, and without love for business, the business will collapse.

2. Will I be interested in this business in 2-3 years?

Business needs to be built in the long term, if it is not originally conceived as a one-time project. Understanding the long-term nature of your undertakings will give strength to development.

3. Is my customer motivated by pain, urgency, or strong emotion to buy my product or service?

If in this niche you see a real, urgent need for customers who are only “sleeping and thinking” how to solve this issue, then this is your niche.

4. Are clients looking for solutions?

Do potential customers have a desire to find a solution to their problem?

5. How many solutions does the market offer them? What are your competitors offering? How well do their proposals meet the requirements of the client?

All novice businessmen usually face the same problems and mistakes.

Top 6 mistakes when choosing a niche:

1. Selected too "wide" niche - a large number of more professional competitors, competitors with a strengthened brand, demand is almost equal to supply.

2. Selected too narrow niche - too few people are looking for solutions to this problem.

3. The project is launched without testing- when the decision is made for the client, without testing the product for demand.

4. An item is selected that nobody needs- look “soberly” at what you want to sell.

6. Positioning not from the "pain" of customers, but starting from the product, but - this approach is found all the time.

Now let's check how your idea of your niche is confirmed by the consumer mass.

Consumer Opinion Monitoring

Go to forums, polls, conduct live interviews in in social networks or among friends.

You must understand:

1. Is your offer interesting for the segment you are targeting;

2. What will be the main reason for contacting you (why customers will choose you);

3. What flaws in your idea people point out.

It is also recommended to analyze the key queries on http://wordstat.yandex.ru and calculate how many people actually turn to search engines with a query that is relevant to your offer. In the same place, in the block "Requests similar to ...", you can find a useful hint for yourself.

For example, in the screenshot, the output for the query “training courses”:

From the above example, we can conclude that people are actively interested in the subject of education, and we can assume that they are willing to pay for it. On this moment this market on average in Ukraine is estimated at $500 million per year.

Once you've decided on a niche, consider how you can communicate your unique selling proposition to consumers.

Mark your position

Your message should be clear, unambiguous and short. The simpler it is, the more likely it is to be understood correctly by consumers.

You just made a small but very an important investment for your future business, - the time you spent reading this article will help you find the most interesting and sought-after direction for business. And its development will bring you not only great pleasure, but also a decent profit.

Save this mindmap for yourself so you can refer back to it whenever you need to!

Sooner or later, a person faces the question: continue to work "for an uncle" or try his hand at own business. Independent business is personal and Financial independence, realization of ambitions, status. But at the same time, these are increased risks and full responsibility for final result. The success of future entrepreneurship is largely determined by the correct choice of a business niche, which we will discuss in this article.

1. Decide on a business direction

Choosing a direction for future activity is the most important step for a novice businessman. No need to rush headlong into the first (albeit popular) idea that comes across. It is necessary to soberly assess not only the prospects of the direction, but also own possibilities on entry into the chosen sphere and development in it. It is desirable that the niche meets at least one (and ideally all) criteria:

The chosen direction should be pleasant. A business that you do with pleasure is more pleasant and easier to develop. Many businessmen called themselves happy just because they turned a hobby into a business. As a result, you receive both moral and material rewards.
You need to have competence in the chosen direction. Even if the niche in your profile is quite competitive, good professional knowledge and skills should help to take their share of the market.
The offered services and goods must be in demand. The well-known formula from classical economics “demand creates supply” is relevant at all times. Of course, there are high-risk areas in which venture companies bring fundamentally new products to the market: in fact, the reverse formula works - the manufacturer creates demand with the help of a completely new product or service. But this option is more suitable as an additional option in the presence of a valid efficient business. At the initial stage, the risks must be justified.

2. We evaluate the prospects

It's good when you have a clear idea of what you want to do and how to go about it. But most often, when choosing a niche for a business, throwing between various options. Therefore, it is better to make a short list of ideas that, in your opinion, will “shoot” in your execution. With this list in place, you can begin to evaluate each idea more carefully in terms of opportunities and threats.

First of all, you need to understand two things:

Who is your consumer in each potential niche.
What are the prospects for each direction.

You need to clearly understand what customer needs your business will cover. Potential consumers are money, and they need to be evaluated using various mechanisms: surveys of acquaintances, thematic forums, groups on social networks, expert opinions. It is necessary to draw up portraits of consumers for each chosen niche.

The chosen area should have development prospects. It makes no sense to invest in a direction that, although it is in demand now, has a tendency to "collapse" in the near future.

3. Weigh our options

The entry threshold is different everywhere, and this is influenced by various objective and subjective factors. When evaluating each promising niche, these factors should be taken into account, even those that at first glance may seem insignificant:

Competition. You need to understand who your competitors are and what advantages you will give to potential customers. If the offer in the niche is excessive, and you are not ready to offer competitive advantages, then even knowledge and desire will not help to win any significant positions in the market.
your potential. It's about about internal and external potential. Evaluate not only your personal capabilities, but also the capabilities of your environment. A childhood friend can become the first supplier of components, a wife’s girlfriend can become a target audience and at the same time word of mouth advertising, an influential acquaintance can become a lobbyist of interests in the chosen market.
Start-up capital. It is important to understand the source of funding for starting a business. And if for the service sector this will not be the most significant amount, then for the manufacturing sector it is quite decent. Good if enough own funds, but will you be willing to sacrifice other people's or borrowed money?

Careful study of all factors for each chosen niche will help to gradate and compile your personal rating of business ideas. And then it remains only not to be afraid to take the first step.

4. We count correctly

Drafting preliminary business plan for each idea is a rather laborious, but necessary stage. It is important to understand that "the game is worth the candle", because final goal Any business is about making a profit. Doing business for the sake of the process itself is wrong and will eventually lead to financial ruin.

It is the insufficient depth of immersion and excessive optimism in the calculations at the initial stage that is the main reason for the unprofitability and bankruptcy of most novice businessmen. When calculating, you need to focus on a pessimistic forecast. Even a seemingly promising direction with many unmet customer needs is far from a guarantee of a flow of consumers in the early stages of business development. The path from a potential client to a real one is quite long, and you need to be ready to go through it “in the red”.

When drawing up a preliminary business plan, you need to calculate:

One-time expenses at the very beginning. It could be a purchase. necessary equipment and tools, the cost of registering an individual entrepreneur or legal entity, buying a franchise, licensing, etc. These costs are one-time and make up the bulk of the start-up costs.
Current or monthly expenses. This includes the rent of premises, salaries employees, utility bills, bank maintenance, tax deductions, purchase of components and other costs. You need to see what you can save on in the beginning, and certain types works (accounting, website maintenance) can be outsourced. At the same time, you need to have a “margin of safety” for at least three months, and preferably for six months, i.e. be prepared to finance current costs out of your own pocket.
Income plan or revenue. This is exactly the calculation for which optimism is the main enemy. Estimate revenue prospects based on the lower bound to be ready for reality.
Supply plan. Is not actual problem for the service sector, but important for production. Manufacturing process must be provided with materials and components evenly and constantly.

A preliminary business plan is different from a full-fledged one, but it is quite enough to assess the possibility of entering the chosen business niche.

5. Making the final choice

After going through the previous 4 steps, you will see a more or less clear picture for each business idea. You have preliminary calculations, an assessment of each direction and an understanding of what needs to be done. After weighing the prospects of each idea according to the proposed methodology, at the end you will get a very real niche for your own business.

Be prepared for difficulties in the early stages and be patient: the return on investment is not a matter of one month. But the prospects that open up are worth it to start your own business.