The Only Guide You Need to Choosing Your Business Niche
There has never been a better time to be an entrepreneur. The wide reach of the internet and social media is a huge advantage for business owners. But with that wide reach and opportunity comes a lot of competition.
For every business imaginable, there might be hundreds (or thousands) of competitors who have already launched and gained a following of devoted customers.
New online businesses can easily drown in the sea of entrepreneurs all trying to gain traffic and sales.
So, how can you stand out in the clutter, get recognized and find your audience?
There are many steps, but one critical decision you have to make is defining your niche.
Even though it’s an important decision, there’s no need to panic.
Choosing your niche doesn’t require following a complicated formula or combing through tons of data. It can be accomplished with something I like to call strategic authenticity.
Before we go any further though, let’s clear up a common misconception about niches.
The Importance of Niche and Target Audience
A niche is a speciality or focus within an industry that is aimed at a target audience.
Let’s look at an example to clarify this:
Rachel is a dating coach that helps single women develop a mindset to attract their soulmate.
- Industry - Coaching, Life Coaching, Personal Coaching
- Niche - Relationship Coach with a focus on attraction mindset
- Target Audience - Single women looking for love
Each of these 3 factors are connected because they rely on each other so much.
- Industry is pretty straightforward, but if you're in the position of “I know I want to be a business owner, but I don’t know what business to own.” Thinking about niche and target audience can help you arrive at a decision.
- With a niche, it’s difficult to imagine your speciality without thinking about who it’s for, and it’s nearly impossible to think about who you’re trying to reach if you don’t know what you’re trying to reach them with.
Because of this, when we talk about niche, we aren’t just talking about what products and services you offer or what speciality you have.
A niche encompasses everything - it’s the speciality within the industry you work in and it helps you understand your audience, and your audience helps you understand your niche.
It’s too difficult to really separate industry, niche and audience, so instead of trying to figure them out separately, I suggest an organic process that looks at what you have to offer, what needs it solves, and how you can stand out from the competition.
This process defines your industry, niche and target audience without having to spend months researching keywords and trends or doing in depth competition research.
The process is natural and happens as a result of discovering more about yourself and then using strategic thinking to figure out how you fit in the market.
Discover Your Authenticity
To determine your niche (and your industry and audience), you’ll need to take a look at yourself and discover what you’re an expert of.
- What major problems have you overcome in your personal life or career? How did you do it?
- What have you spent years doing? Have you worked in a particular field for a long time? What qualifications do you have? Is there an interest or hobby you’ve put a lot of time and effort into learning?
The answers to these questions are the first step in specializing your business. They help you determine what value you have to offer, but there’s an important second step that helps you strategically focus that offering.
Before we move on though, let’s revisit the example with Rachel, the relationship coach we mentioned earlier.
When she asked herself these questions, she came up with a few different answers.
- Rachel married and divorced at a very young age. Her inexperience in the dating world paired with her insecurity about being a young divorcee left her feeling really insecure. After years of short, unsatisfying relationships, she realized her perspective on love needed to shift. She studied relationships deeply, changed her mindset and as a result she attracted her soulmate. She has now been happily married for 6 years.
- Rachel is an expert love and relationships as she has real life experience and studied the topic greatly
- Rachel has worked as a legal assistant for most of her life. She’s not particularly passionate about the job, but she certainly knows a lot about the business.
- Rachel is an expert legal assistant.
- Rachel has been baking and decorating cupcakes in her free time for nearly 10 years. She loves getting adventurous with her recipes, and her friends constantly tell her she should open up a cupcake bakery.
- Rachel is a cupcake baking expert.
Now Rachel has a good idea of what she’s an expert of and there are a few different business opportunities that can come from her expertise.
But which direction should she take?
To determine that, she’ll need to use some strategy.
To be successful, you’re going to need to attract the right customers and then persuade them to make a purchase from you.
The second part of that equation sometimes makes entrepreneurs a little uneasy. Sales makes people uncomfortable because they don’t want to feel manipulative or pushy.
But making a sale doesn’t have to be stressful. Instead of thinking of sales as you persuading someone to buy from you, think of it instead as the natural result of the journey you create for them.
In other words, the way you design and structure your business can organically encourage customers to make a purchase because they will trust you, know that you have the answers they’re looking for, and they’ll want to make a purchase.
This structure involves creating valuable content, which you give away for free, positioning yourself as a trustworthy authority in your field.
Don’t worry if that sounds complicated or too involved. Making this decisions is much easier when you’ve already thought strategically about who you are, what you have to offer, and who you have to offer it to.
Rachel's Strategic Thoughts
Let’s take a look at Rachel’s 3 areas of expertise and think strategically about which business would give her the most opportunity for success.
- Legal Assistant - Rachel does have a lot of experience in this field, but when she thinks about it strategically she’s able to see that it’s not a great foundation for a business. She arrives at this by asking herself two important questions.
- Who could benefit from my expertise and is there a market for it? There’s really only 2 people who could benefit from her expertise - hiring managers looking to hire legal assistants and people looking to become legal assistants. Since there are already schools across the globe that effectively train paralegals, and hiring managers don’t really struggle to find them, there isn't much of a market for this type of expertise.
- Would I enjoy offering my expertise? Rachel doesn’t like her job. She’s done it for so long because she invested money and time in it, and she started to feel trapped by that experience. Offering advice to others about being a legal assistant doesn’t appeal to her at all, even though she’s very qualified.By answering those two questions, Rachel was able to see that there’s not really a market for her expertise and she wouldn’t enjoy it if there were. That eliminates that choice.
- Cupcake Bakery - Rachel has been baking cupcakes for a long time, she loves doing it, and she’s only ever heard raving compliments, so opening a cupcake bakery might be the way to go. She asks herself some strategic questions to figure out if it's the best choice.
- What will it take for me to open this business? The investment for opening this business will be pretty large. She’ll have to pay for the perfect, competitive location and all of the equipment and permits that go along with opening a bakery. Of course, to compete with all the cupcake bakeries in her town, she’ll have to pay for a clever marketing campaign.
- Is there a way for me to stand out amongst the competition? Cupcake bakeries have become pretty popular. There are several in her town, and they each serve a different communities' needs. She’d have to think a little more about how she could offer something unique in order to be a success.The cupcake bakery might be a good idea, but it looks like it’s going to take a lot of time and money before she can really get started, and she still needs to do more research to figure out if it can even be successful in her city.
- Relationship Coach - Rachel had never considered the idea that the things she’s overcome in her personal life could lead to a career. She often gives dating advice to her friends, and it works because she focuses that advice on changing attitudes, perspectives and mindsets. To make sure it’s a good choice, she thinks more strategically about it.
- Is there space in the market for me? There are a lot of dating coaches out there, but since Rachel has such a unique personal experience, no one can offer advice in the exact way she can. She has experience in so many aspects of love - getting married to the wrong person, getting divorced, being single, finding the wrong guy over and over again, finding love, keeping a relationship strong and alive for many years. That’s a lot of great experience to leverage.
- Is she ready right now to open her business? Not really. She could open her business and start coaching clients, but she knows that she really needs to develop her skills first. Her business skills and coaching skills could use some work, and she knows that she’ll be far more successful if she gets the appropriate training.Based on these answers, she can see opening a relationship coaching business would be the best decision. There’s a definite market for it, she feels confident she could find success, and she only needs to invest a little time and money in some training before she’s ready to open.
As you can see, thinking strategically doesn’t mean combing through data or asking a lot of complicated questions, you simply need to think about:
- Who can benefit from my expertise, and are they willing to pay for it?
- Will I enjoy offering my expertise in this field?
- How much time and money will it take to open this business and how likely am I to see a return on that investment?
- Do I have something that can help me stand out from the competition without narrowing my focus too much?
Once you find the answers to these questions, you’ll know what your industry and niche are and who your target audience is.
Then, you can start to think about how to position yourself uniquely amongst the competition.
Strategies to Find Your Unique Position
You know your expertise, and you have a good idea of some needs it could fulfill, now you’ve got to take that knowledge and sharpen it, avoiding making your focus too broad or narrow in the process.
The trick with sharpening your focus is not necessarily about specializing even further, because that will often make your focus too narrow.
Instead, there are a few different strategies you can use to make yourself stand out in your industry, while still appealing to your ideal audience.
Some of these strategies may not apply to you, and there’s no need to use them all. Rather, this list is an arsenal of tools that you can use to take the expertise you have and the problems you can solve and turn them into a successful business.
- Fill a burning need: Some needs are fairly broad, but they are so intense that their wide appeal makes it easy to attract customers. For example, the weight loss industry has a broad appeal because there are millions of people around the world that want to lose weight. Weight loss is a burning need, so in general, a business focused around it can easily find success.With broad appeal industries, it’s easier to focus on audience instead of niche. Think about who you can serve more than what you can serve them with.
- Represent an underserved market: You can also look at the opposite of a burning need. Underserved markets are groups of clients waiting for someone to meet the exact needs they have. The trick with this is making sure that you’re looking at an underserved, not a nonexistent market.Your best gauge of this is competition. If you don’t find competition, there’s likely no customer base.
- Be personal to get noticed: Some niches are fairly oversaturated and in order to stand out, you’ll have to get personal. Rachel’s niche is a perfect example. There are tons of relationship coaches out there, so to stand out, Rachel can leverage her personal story as part of her branding. Since no one else has her story, she’ll automatically be differentiated from everyone else.
- Position a unique worldview: There are industries and niches that can benefit from not just personal stories but unique worldviews as well. In other words, you can stand out in a niche by appealing to an audience with a specific perspective that you share. For example, a business coach could focus on advocacy business models for those who share a philanthropic worldview.
- Consider their losses and rewards: Sometimes, you can find a niche by thinking about what your audience will lose or gain if they don’t purchase your products or services. For example, a confidence coach could consider the missed job opportunities and potential career advancements that someone could make by gaining more confidence. This confidence coach could then to decide to focus their aim helping clients gain confidence specifically for their careers.
- Grow with your audience: A niche doesn’t always have to focus in on a specific goal or time period, it can span across time as a person grows. Think about a feminine energy coach for example. She could focus on one stage of a woman’s life, like retirement, or she could offer services and products for women at multiple stages. Her niche could be aimed at helping women through all stages of motherhood from birth to empty nesting. Both have an appeal, but growing with your audience gives you customers for life.
Attract Your Audience and Keep Them Coming Back
With all of these strategies, you should have a good grasp on your industry, niche and target audience. Your focus will be aimed in a specific direction, but it won’t be so broad that you get lost in the crowd, or so narrow that you don’t find success.
I mentioned in the section on Thinking Strategically that once you’ve chosen your niche and understood your audience, you have to find a way to draw them in and persuade them to make a purchase without being pushy.
To do this, I recommend using a technique called the Evergreen Model. This technique helps you establish yourself as an authority and gain your followers’ trust and devotion by giving them valuable information for free and gently guiding them to a sale.
In my Business Mastery Certification program, I teach you everything you need to know to establish a successful business, including how to use evergreen funnels.
Now that you’ve got the tools to help position yourself with strategic authenticity, it’s time to take action and start your business!
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