Finding Your Home Business Niche

Focusing Your Niche Marketing for Success

Finding your home business niche is an important step in starting a home business. Focusing your niche marketing on too broad or too narrow a home business niche can spell disaster.

The ultimate success or failure of your online home business will depend on how well you choose your home business niche. It's not always an easy task. There are so many factors that must be considered...

• How well do you understand the needs of your chosen niche?
• Does this target market spend money on this niche?
• How broad should you go?
• How narrow should your focus be?
• Do you speak the "niche language"?

Those are just a few of the things you'll want to examine when you are finding your home business niche.

What Is a "Niche"?

Do you understand what the word, niche, means? A niche is sometimes called a target market and it is a group of people who share the same wants, needs, desires and interests. For instance:

• People who love Boston Terriers
• People who want to lose weight
• People who are interested in applying the Law of Attraction to their lives
• People who enjoy riding motor scooters
• People who want to learn about algebra
• People who love to cook Italian
• People who are interested in traveling to Acadia National Park

Are you starting to get the picture? Now, within the examples listed above, there might be even narrower niches, such as women who want to lose weight, or adult learners needing to know algebra to go back to college for a career change after being downsized, or people interested in making Italian pastries.

How Broad or Narrow Do You Go When Finding Your Home Business Niche?

There's no one right answer to that question when it comes to finding your home business niche. If you look at this page (click it to open a new tab), you'll see hundreds of niche websites. Some, like the ones on all things photography and guides and tutorials, are really broad, while others, like the ones on cornhole games and electric cars for girls, are incredibly narrow. But all are successful, ranking in the top 1% of websites on the Internet.

The advantages of a narrower niche are that it may be easier to get noticed and to succeed in becoming a major player in the niche, simply because you have fewer competitors. On the other hand, if you go too narrow, there may not be enough potential to make a profitable business around.

A broader niche may seem easier to create content and/or products around. And you'll have more potential customers too, right? The only problem might be that lots of other websites are focusing on that niche too, so getting noticed in the crowd could become problematic at best or even impossible.

As I said above, there's no easy answer to finding your home business niche. Like any decision, you research to the best of your ability and then you take a risk by deciding. Once you decide, give it your all for a reasonable period of time and be willing to quit the niche or modify your approach if it doesn't work.

How to Evaluate a Home Business Niche

There are some fairly easy ways to evaluate various niches before you make a decision on which direction to go with your home business niche marketing. But before we get into that, let me just emphasize an important consideration in finding your home business niche:

Don't even consider a niche you aren't at all interested in. Take it from me, building an online home business around a niche takes a lot of work. You won't stick with it if the subject bores you. For instance, I would never pick a niche having to do with engines or insurance. I know I couldn't stick with it and wouldn't want to learn about those subjects. So look within yourself to help figure out which direction to go.

Here are some quick steps to start finding your home business niche:

1. Google a niche concept phrase to see how many websites come up. This is just to give you a preliminary idea of how strong this concept is on the existing Web. If you see thousands of websites on this topic, chances are it's a viable niche.
   
   You can use this search box to get started:
   

2. Find out how many daily searches there are for various keyword phrases associated with the niche. Your next step is to find out more exact numbers on how many people are really searching for niche-related information each month. The free Google Adwords Keyword tool can be used for this step and the next one. Click here to go to this keyword tool (new tab or window opens). Type in your niche concept, such as "online home business", fill in the verification code and then click the "Get keyword ideas" button. In a few seconds, a chart will populated that shows search volume for related keywords. A viable niche will have lots of keywords with search volume at least in the hundreds. Next, look at the Advertiser Competition bar. If the keyword has tons of competition, it might be hard to make an impact there. On the other hand, don't get too excited about really low or no competition. Could be there's no money in that keyword.

3. Find out what advertisers are paying for those keywords. Stay on the Google Adwords Keyword page, but click the drop down list arrow under "Choose columns to display" and select "Show estimated Avg. CPC". That will insert another column that shows you what advertisers are paying through the Adwords program to run ads related to that keyword. (Adwords is the Google ads program that generates all the ads you see in the right column of Google search results and on many content websites, including this one.) That'll give you an idea whether the niche you're considering might be lucrative. For instance, if all the CPD numbers are 5 cents or thereabouts, don't expect to get rich in that niche, at least not from running Google ads. But if you're seeing numbers above $1 per click, woo hoo! There's probably gold in them thar hills!

4. Check to see if there are forums or directories around the niche. If there are, then probably this home business niche is one that could attract some targeted traffic. To find this out, either use the tool below these steps or just scroll up again to the Google search box and put in your niche concept + forums. Then repeat with the words directories and groups. If lots of sites comes up, it's looking good for this niche, in terms of demand.

5. Go to your local bookstore or look on Amazon.com or Barnes&Noble to see how many magazines and books there are on this topic. Again, if publishers are spending money to produce books and magazines on a topic, chances are it's a hot one and it's a market you can potentially build a business around.

6. Check Google Trends and Yahoo Hot Topics for interest. Google Trends is a Google feature that shows you the most popular search topics each day. It may help you think of a niche idea, as well as show you how hot your niche concept might be. The Yahoo Buzz Index shows similar info for the Yahoo search engine.

You might also want to look at the SearchIt tool. There are tons of niche finding searches you can do on there, such as simple brainstorming, competition, forums/discussions/groups, and more. You could literally spend hours playing around with this tool and gathering information.

Those are just some preliminary ideas in finding your home business niche. When you've narrowed your home business niche possibilities to 2 or 3 best choices, you can delve into the niches in a bit more detail to see if you can identify unmet needs or problems that you can provide a unique solution for or a different approach.

Do Focused Keyword Research into Possible Home Business Niches

Your next step is to do more detailed keyword research into your possible niches. Try to limit this to your so-far 2 or 3 best niche concepts, based on your initial research. You don't want finding your home business niche to get too overwhelming by looking at dozens of ideas in detail. To do this detailed research, you'll benefit if you have access to a great keyword research tool. Here are 3 I can recommend:

• Search It. This free tool, already mentioned above, is a powerful search tool that gives you access to all kinds of keyword research. You can get an idea about keyword search demand, competition and potential profitability. It's a great tool, that you can find here.

• Wordtracker. This is probably the "king" of search tools. Unfortunately, it's not free to use in all its capabilities. However, they do have a 1-day free trial, in which you can do quite a bit of research. It's limited, but it's a start. Or, you could pay for a 1-month membership for $59. Access the free trial here

• BrainstormIt! By far, this is my favorite keyword research tool. It is just so powerful... but it is only available as part of the Site Build It business building package I use to power all of my online businesses. BI! uses Wordtracker to populate much of its search results, but then takes it several steps beyond anything Wordtracker can tell you. Read more about BrainstormIt! here (scroll down to "The Missing Piece" subhead and click the Brainstorm It v3.0 link)

There are many other keyword research tools on the Web too, but those are my 3 favorites. What you want to try to determine as you do your research are 3 different factors...

What Kind of Demand Is There for This Niche?

When finding your home business niche, a healthy demand is key. Demand is interpreted from the number of monthly searches done around keywords or keyword phrases related to the niche you're researching. So, for example, if your proposed niche is "vegetarian recipes", then you'd enter that term into your research tool and see how many monthly searches there are.

If there are at least a thousand or more searches a month around that term and related terms, that's great! In the 10s of thousands is even better... it shows that tons of people are interested in this niche, in other words there is a demand.

But How Much Competition Is There?

The next step in finding your home business niche is to get an idea what kind of competition you'll be up against. Will you be able to gain a foothold in the niche? This is where establishing the right scope for your niche concept (i.e., broad vs. narrow) becomes crucial. Competition is determined by looking at what we call the "supply" in that niche. Some competition is desirable, because it means there is a market in that niche. But too much might limit your earning potential, unless you are able to get on top.

To determine the impact of the competition, you really need to compare supply to demand. A rough measure is to keep the ratio of demand to supply at 1:3 or less. And that leads us into the next factor in finding your home business niche.

Is There a Potential for Profitability?

Finally, when finding your home business niche, you want to get an idea of your potential to compete for profit in the niche you're researching. As mentioned, knowing the demand to supply ratio is an indication of profit potential. But calculating that manually can get pretty tedious. So most keyword research tools, including Wordtracker and Brainstorm It, provide a measure you can use. Wordtracker calls it KEI (keyword effectiveness index). Brainstorm It just calls it "Profit". In Brainstorm It, you look for a number greater than 400 ideally, or at least greater than 100.

Remember, though, that it's a predictability of potential... it's NOT a guarantee. Much will depend on your approach, the quality of what you have to offer, industry trends and sometimes luck. Still, potential tells you whether it is at least worth trying.

Is There a Market of Hungry Buyers?

It's great if you find a home business niche that appears to offer great profitability, but there's another factor... and that's whether there are actually people in the niche who are willing to spend money on something niche-related. Here's what you're looking for:

• Market buys regularly
• A product that is easy to fulfil
• Product has a good profit margin
• Customers who want to buy the same or related products over and over

If you don't have that, then don't expect to make a lot of money in your business, even if you are able to score tons of traffic! For instance, if you pick a niche that caters to teens, it might not be very lucrative, no matter how popular. Recipes is another niche where it's hard to make a lot of money, because people looking for recipes are usually looking to get them for free. So, as you can see, finding your home business niche is also about finding a market of hungry buyers.

So What Can You Do?

Well, definitely use the Google Adwords Keyword tool mentioned earlier in this page. That'll give you some idea of what people are spending to advertise in the niche. If there's no money to be made, people aren't going to waste advertising dollars. Another tool is MSN's "Commercial Intention" tool, which you can find here. You just type in a few keywords there and you can get a feel for whether the major keywords in the market are buying type keywords or non-buying keywords. I found the tool to be kind of slow, but it's definitely valuable info to have.

Software for Finding Your Home Business Niche

Once you have narrowed your niche marketing focus to 2 or 3 really strong niches, you'll be ready to make that flying leap and decide which one to pursue (first?). But sometimes making the decision in which direction to head can be difficult. So, I'm going to direct you to some free decision-making software that is truly powerful. It's called Niche Choose It and it's my free gift to you:

In Summary...

Finding your home business niche that will both be successful AND make you happy isn't a decision that should be taken lightly. You're going to have to live with this decision for a long time, so make it carefully. You don't want to invest time, money, and effort into a home business niche that you won't want to stick with over the long run. But if you follow the process outlined here, you're much more likely to make finding your home business niche a successful endeavor.