There are two factors that every good niche needs to have: profit potential and low competition. If you have both, then you have a good chance of carving out a part of that market for yourself.
In this article, we’ll look at how to come up with a list of potential niche markets, as well as whether or not you’ll be able to break into the market.
=> Start by Coming Up with a Broad List
The first step is to come up with as many topics as you possibly can. You’ll later narrow this down to just the one or two that have the most potential.
Start by writing down all your personal interests and passions. Come up with at least ten things that you’re either passionate about or have knowledge in.
Then take a stroll through a bookstore. Look at the magazine racks and jot down any ideas you have for niches and sub-markets.
Carry your notepad with you wherever you go for a week or two. Once you have a few high potential markets to look at, then it’s time to evaluate each niche’s potential.
=> Researching the Number of Established Brands
The first thing to do is spend some time exploring the market. Though you can do the statistical parts of niche research in a day, to really get to know a market may take a little longer.
Get a sense for what the biggest brands in your space are. Do this by doing Google searches for a wide range of terms and seeing what sites come up.
In addition, read as many blog posts and forum posts as you can on prominent industry forums. What are names of companies and people that are often mentioned? Who’s viewed as the “gurus” or the best resources in the space?
Ideally, you’re looking for a market that has a few competitors, but nobody that has an extremely strong foothold. If there are multiple strongly rooted personalities in the market already, you’ll probably have a hard time breaking in.
This part of the research is more qualitative (meaning “feeling-based”) than quantitative. It’s basically getting a sense of how deeply entrenched your competition is.
=> Toughness of Competition for Search Terms
The other part of the research is more statistical. You want to figure out which keywords you plan on targeting, then figure out exactly how much traffic those terms have and how much competition you’re facing.
Look at the PageRank, the incoming links, the domain age and the estimated traffic of the websites that come up first for your target search terms.
Are these sites established sites that are deeply rooted in the industry? Or are they relatively new sites with few incoming backlinks?
In other words, do you believe you’ll be able to beat those sites to a number one, two or three position within about six months?
For your first time, it’s best to aim for search terms that you can easily rank for. As you get more experience, aim for tougher and higher reward keywords.
The whole process looks something like this: First, brainstorm as many ideas as you can. Then cross off the ideas that clearly won’t work out. For the remaining ideas, research the quantitative/numerical traffic and competition data, as well as the more intangible sense of how loyal people are to the top brands. Then pick a market you believe you can break into and jump in with both feet.