NICHE MARKET = PEOPLE WITH A COMMON INTEREST OR PROBLEM + PEOPLE YOU CAN EASILY LOCATE + PEOPLE WHO HAVE MONEY TO SPEND

So you have identified the people you want to serve, and you have figured out where to find them. The next challenge is to figure out if they have money to spend, and if they do, will they spend it on you and your product.

There are a number of clues in the research stage about whether this niche will buy. Microsoft has a nifty little tool designed to identify commercial value of a particular keyword. Adwords bids tell you what other advertisers are willing to pay which can be an indication of whether the niche is profitable.

These tools are just indicators providing clues, but none of them are entirely reliable.

This is where testing comes in. You have to float a trial balloon to see if people will buy. Some marketers do this with organic search and some do it very quickly with pay per click advertising. One costs time. The other costs money. Both work so take your pick.

The fastest way to test is to throw up a well optimized Wordpress blog (please don’t freak…I can help you with this and it’s really not that hard any way) with someone else’s product (ie an affiliate product) and see if people buy.

So you run a test to see. If they buy you know it will be worth spending your time, energy and money to create a product of your own. You already have your marketing engine in place so it’s just a matter of creating the product (much easier when you know there’s a market yes?).

If on the other hand, you can’t sell a product, you have saved yourself a ton of resources that you can now spend on creating something else.

Next – the role of competition in finding your niche…

NICHE MARKET = PEOPLE WITH A COMMON INTEREST OR PROBLEM + PEOPLE YOU CAN EASILY LOCATE + PEOPLE WHO HAVE MONEY TO SPEND

Okay, so you’re beginning to get a sense of the people you want as clients or customers, and you’ve got a glimmer of an idea about the problems they share, but how do you ever find them?

This can be a huge problem.

In a traditional offline environment, you’d be looking for people who congregate in one place. You’d find them in organized groups like associations, organizations, schools, and churches. In the online world you might also find them in Yahoo Groups and Google Groups which can often point you toward some profitable niches.

The problem I always found as a rather nontraditional therapist and coach was that my clients were independent thinkers who often weren’t joiners. Oops. That makes it a little tougher, doesn’t it? It might even mean it’s not a good niche…but wait…

Online we’re not dependent on finding groups of people who formally congregate though that’s still a good way of finding a niche. Online we’ve got a mountain of information available to help us identify our potential customers.

The primary piece of information is, you guessed it…KEYWORDS. All of those independent, individualistic, non-joiners, do search for stuff online. Yes, we all gather in Google whether we know it or not. And Google keeps track of what we are collectively searching for.

If you’re not screaming opportunity yet, you haven’t been paying attention. Keywords are the vehicle through which you can find your niche particularly when you’re targeting those people who don’t tend to congregate in large numbers in identifiable and accessible locations.

Next up…how can you find out if they have money to spend?

If I’m repeating myself, please forgive me, but this is so important…and most reluctant entrepreneurs skip right over it. Or they get bogged down in trying to figure it out only to end up getting well and truly stuck.

I know it took me forever to really understand what a niche or niche market is. Maybe you’re quicker than I was (I certainly hope so), but I just didn’t get it for the longest time. I knew it must be important (everyone said it was), but it just sounded like so much business gobble-de-goop.

In business terms, a niche refers to ‘a specialized market‘ or ‘a distinct segment of a market‘.

Still sounding foreign?

Let’s try this…in non-marketing terms niches refer to either a recessed space (as in a wall that often houses a statue) or to the idea of finding one’s place. The underlying sense in both definitions is having found a place that feels like home, a place where you belong…or a sweet spot.

So what makes home feel like home?

Yes it’s the house and the yard and the plants and the books, but most of all it’s the people you share it with. It’s having friends and family nearby. It’s being surrounded by people who share your values and find meaning in similar kinds of activities.

Now think about how that relates to your business. In looking for your niche market, aren’t you looking for the people you enjoy being around, people who share your interests, and people who share your values? Aren’t you looking for people who have some of the same struggles you’ve had? People who have many of the same questions?

So when looking for a business niche, you’re looking for people with common interests, common values, and common problems.

That’s part 1 of a 3 part equation….

NICHE MARKET = PEOPLE WITH A COMMON INTEREST OR PROBLEM + PEOPLE YOU CAN EASILY LOCATE + PEOPLE WHO HAVE MONEY TO SPEND

So maybe you’d like to do some brainstorming around the characteristics and qualities of you ideal client, and especially think about the common problems your ideal clients may be facing.

Not all markets are created equal so make a long list of possibilities, and try not to get too attached to any of them. You’ll have plenty of time to hone this list as you go along.

Next up – How to find these folks?