Finding a profitable market niche and product

There is a single most important element that has the most significant influence on the success or failure of any business. It is the initial business idea. It consists of your product, your target market niche, and your unique selling proposition (USP). If you have a good business idea, and apply the proper techniques to develop your business, then your success is almost guaranteed. Here are few good tips that will help you to find good business ideas.

What makes a good business idea?

Let’s look closer at the three parts of what we call a business idea. The “product” term is self-explanatory, “target market niche” is also widely used, “USP” is somewhat less known, but we want to make some comments on each of those terms, regardless of their popularity.

Your product is, pretty obviously, what you are trying to sell. It can be a tangible item, like a book or a brick of soap. It can be an electronic item, like an e-book, or downloadable software. At last, it can be an online community membership, your professional service, or anything else you are going to charge your customers for. We call all those things “a product”. The most important attribute of a product is its value. Your product must be valuable for your customers, solve their problems, fulfill their wishes, and generally make them happy.

Your target market niche is your audience, your potential customers. Your target niche should have a reasonable size – large enough to make a good profit, small enough to fit the resources of a small business and avoid competing the large corporations. And your target audience should be easy to reach online through the specialized web sites, online forums, mailing lists, etc.

Your unique selling proposition (USP) is what connects your product with the target audience. It is the heart of your business idea. It can be defined as your marketing strategy, or your business mission. It is the concept that makes your product something more than one of the items on the shelf for sale. It must make your product stand out of the crowd and persuade your prospects that your product is the only perfect solution to their problems.

If all three parts of your business idea meet the above criteria, your chances to succeed are quite good. But how can you find such an idea? Read on, and you’ll learn several ways to do it.

Find a niche that matches your knowledge and skills

The best policy when determining your product and target market is to do what you enjoy doing. You’ll achieve the best results if you love your work. So, first of all, think about the things you like to do most of all. It may be your current job, one of your previous ones, your hobby, your favorite kind of sports, or anything else you like.

Write down all those possible areas of interest, and then think about each one of them separately. Try to answer the following questions:

  • Would you be glad to choose it as a daily job?
  • Do you have some unique skills or knowledge in that field?
  • Who would be interested in your proposition?
  • Would you like to work with those people?

After that, you should have a list of areas of interest that have the best chances to bring you the success.
Now, you can pick one of those areas and start structuring your knowledge. Write down the list of all the basic things one needs to learn to reach your level of success in that area. Then put them in a logical order, so that your customer could learn them in sequence. Then, do the same for each item in your list – break it into smaller parts, and then arrange those small parts in a logical order.

When you finish such two-level lists for several areas of interest, you’ll have some ideas about what you can offer to other people. Look through your lists, and think over each item.

Do you know anything special about it?
Do you have any related skills?
Can you try and create some product to help people solve that problem?
Can you offer something outstanding, not present anywhere else in the market?
Write down your ideas and try to imagine and describe a business built on every of those ideas. Some of them might look weird, but some may be quite viable.
Show your lists and ideas to your friends, listen to their opinion. They’ll surely tell you what ideas they like most, and maybe they’ll even give you some more ideas. They can also point out some logical mistakes you might have made. Ask your friends what products they might need, or what they would be willing to learn. Think how you can help them. Many other people could have the same problems as your friends. Again, write down all new ideas and imagine developing a business.

Do some research in the Internet. Find the web sites related to your areas of interest and your specific ideas. Learn what other people say about those things. Find some related online forums, or newsgroups. Listen to what people say, especially to what they need. If you notice any problems that many people tend to experience, think how you can help them. See if there is some serious competition in your field. As always, write down and think over your new ideas.

And, besides of conducting your research intentionally, always write down the “incidental” ideas that come to you during a walk in the park, or during your lunch. The best ideas often appear at the moments like that, so make sure you don’t forget them. Just make a small note, and then think it over when you have more time.

If you do all of the above, you’ll soon have a ton of ideas. Of course, they will be of different quality. Pick those that you like most, and research them more thoroughly. Try to invent your own products, or find someone else’s products that could make those ideas work. Why consider someone else’s products? Because you can form a joint venture with the product’s owner, and take a commission for selling that product in your specific market niche.

Estimate your chances before the big work

No matter how much you like your idea, don’t be in a hurry. Don’t invest your time and money into a new business until you make sure you’ll be able to profit from it. It would be very disappointing to spend half a year and thousands of dollars into a new product, and then to be unable to sell it to anyone.

First of all, think, would you buy such a product yourself? If you feel doubted, then you should probably work on another idea first. Ask your friends if they would find your product valuable. Maybe they would, but with some changes – write them down.

Try to estimate your market niche size. Internet can be useful here. Look at the search engine statistics, try to find information about the size of mailing lists devoted to your problem, find your potential competitors and think what will make you different. Make sure your target niche will be not too large and not too small.

Make sure your target audience is easily reachable online. Find and collect the addresses of web sites, online forums, and other Internet resources related to your product. Those are the places where you’ll want to advertise and seek for joint ventures.

When you have the addresses of the related online resources, conduct some research in target audience. Place some announces on the Internet and see how people react. If someone follows the links in your ads, or writes you email showing some interest, then your product will definitely be worth something to someone. You can even estimate the price by simply asking people how much they would pay for the solution to their problems, and how much they usually pay for similar products.

Automating the research to save your valuable time

As you have probably noticed, the process of finding business ideas and estimating their potential is rather time-consuming. You probably don’t want to spend several months just searching for ideas and evaluating them. You may be late by the time your research is over, because someone else can take up your target niche with his or her product at that time. Try to use tools like Google Trends Explorer to find out what’s trending or Keyword tool to see what people are searching for the most.

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