HOW TO FIND A PROFITABLE BUSINESS NICHE
You have an idea for a business. But, you’re not sure if it’s a good idea. You, of course, want to ensure it will be profitable. Many new entrepreneurs search for a profitable business niche that nobody else has found yet. Honestly, this is a waste of time. You can find a profitable niche without having to reinvent the wheel. Here are the 5 things to look for in order to find a profitable business niche that will bring you long-term success:
1. FIND AN EVERGREEN NICHE.
The best business niches are “evergreen” meaning that their products or services will be in demand for many years.
The best business niches are “evergreen.” This means that they are not something that is just a popular fad now, but something that will be in demand for many years. It’s hard work to start a business. It takes a lot of time and resources. If you pick a trendy niche, as soon as that fad is over so is your business. Unless your business is diversified and that trend or niche is just one small portion of your business, your customers will be gone and your business will be over as soon as that fad has passed. Therefore, it’s better to spend your time and resources on an evergreen niche. Ask yourself, “will customers need this product or service 20 years from now?” If the answer is “yes” then explore that business niche further.
When I started my business, Scrapper’s Edge, in 2004 my mom asked me “isn’t scrapbooking something people won’t be doing for long because people are going digital?” First, I’m happy to report that 14 years later people are still scrapbooking. They’re also using the same tools and supplies that are used for scrapbooking for other activities such as card making, art journaling, and home decor projects. Further, my business is also a print shop and the demand for printed materials has increased greatly since 2004. While my mom’s question irritated me in 2004, it was an excellent question. It’s important to understand fads and trends and ensure your business’ core products or services are evergreen.
2. FIND A PRODUCT OR SERVICE THAT IS IN DEMAND.
A good indication of high demand is if people online, as well as offline, are actively talking about it and searching for solutions.
Choose a business niche that has demand. This means that there’s a great deal of engagement. A good indication of high demand is if people online, as well as offline, are actively talking about it and searching for solutions. If you’re a member of an online group, a business networking group, community service group, or other organization and people are talking about this topic or business niche, this is an indication that you have a good niche. You can also use these groups to learn about your market and to promote your product or service.
I was an avid paper crafter when I started my business and I had a lot of friends that were too. It was hard to find a decent selection of paper craft products in our area which I knew first hand as a papercraft customer. I further understood this to be true because when I gathered for classes and other gatherings with friends everyone talked about the need for a good paper craft store in our area. This helped me establish that there was a need.
3. PROVIDE SOLUTIONS.
When you find problems you can solve, especially in an evergreen niche, you can establish a business that will be successful for many years.
Similar to having a demand, the best products and services for businesses are those that solve problems. Search for business niches where people are discussing their problems and looking for solutions. Most of the time, people seek ways to save time, money, or stress in their daily lives or businesses. When you find problems you can solve, especially in an evergreen niche, you can establish a business that will be successful for many years. So, as you’re being social in online groups, business networking groups, community service groups and even social settings, keep your ears open for problems that you can provide solutions for in your new business.
My business, along with being a paper craft store, is also a print shop. While there are other print shops in the area, none really specialize in getting things done quickly. In fact, the most common complaint I heard about the other businesses was that it took too long to get print jobs completed. Therefore, my business specializes in completing print jobs fast.
4. UTILIZE PRIOR KNOWLEDGE.
If you’re familiar with the business niche already, it will not only save you time but it will help with your credibility.
It is extremely helpful if you know something about the niche already. It will save you time and will make you feel more confident as you start your business. However, having prior knowledge isn’t absolutely necessary. As you immerse yourself in the industry, you’ll learn about it and become an expert. You’ll need to be very resourceful and spend more time researching various aspects of the business, however. If you’re familiar with the business niche already, it will not only save you time but it will help with your credibility as you start your new business. For example, if you seek investors they’ll be more inclined to invest if you have experience and expertise in the business niche already. It may also help you earn the trust of new customers.
Before starting my business, I was a huge paper crafter. In addition, I had worked at a very large printing/publishing company for eight years so I was familiar with the printing business. My experience helped establish credibility and my industry connections helped me be resourceful.
5. EVALUATE YOUR COMPETITION.
If there are other companies selling products or providing services that you want to in your new business, it means people are paying for those products or services. The key to success is to offer something unique in the business niche that distinguishes you from the competition.
Competition is actually a good thing when you’re looking for a profitable business niche. It shows that there is money to be made. If there are other companies selling products or providing services that you want to in your new business, it means people are paying for those products or services. The key to success is to offer something unique in the business niche that distinguishes you from the competition. Don’t simply try to compete on price; it’s hard for a new business to win a potential price war. Instead, find something unique that you can offer that your competition doesn’t. Maybe you’ll have a more knowledgeable team, provide superior customer service, offer longer business hours, have a more convenient location, or offer a larger variety of products or services. Before starting your business, establish what will distinguish you from your competition because it’s going to be important to communicate the benefits of doing business with you not only when you talk to people but also in your marketing efforts.
Before starting my business, I visited every nearby competitor. For the paper craft stores, one thing I did is noted the brands they carried. I made an effort to stock other brands that were not available in our market. For the printing side of the business, I ensured we stocked more paper, envelopes and other raw materials so we could complete jobs quicker than the competition. These things combined with a convenient, very-visible location and superior customer service have resulted in business growth each and every year.
Although you want to choose a business niche that you are passionate about, you need to make sure it is profitable. In other words, find something you love that also will be profitable long-term. Often people will have hobbies that they’re passionate about so they decide to start a business. However, they don’t treat it like a business. They often don’t understand what it actually takes to run a business. Spend time preparing for your business and learning how to operate a business prior to even starting. Your research and preparation will help increase your chances of success in your business niche. No matter how passionate or how inspired you are, keep in mind this article and the 5 things to look for in order to find a profitable business niche.
Best of luck to you in your business endeavors. If you have ideas for future article topics, please let me know by leaving a comment below.
I hope you found this article helpful. You may also want to check out:
- 10 Traits that lead to Small Business Success
- 5 Business Start-up Mistakes to Avoid
- 6 Characteristics of an Entrepreneurial Mindset
And, it’s never too early to plan ways to promote your business so take advantage of this FREE list of 40 WAYS TO PROMOTE YOUR BUSINESS:
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[…] HOW TO FIND A PROFITABLE BUSINESS NICHE […]
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