How to find a niche for your business in 3 steps

The secret to success in most businesses today is finding the right niche for your company. In an increasingly competitive market, focusing on a smaller target clientele can be crucial to achieving your goals. Here, we’ll look at what exactly a niche is, how best to find the one that suits you the most, and we’ll end with a series of tips and tricks that should help you in this quest.

What is a niche?

It’s high time I tackled this subject in a dedicated article, as I frequently talk about it in articles in the “Make Money Ideas” category. But before getting to the heart of the matter, I think it’s worth recalling what exactly a niche is.

In the world of marketing and business, the term niche refers to a specific segment of the market, often characterized by unique needs and specific preferences. A niche can be thought of as a particular category of products or services, designed to meet the needs of a specific group of customers. Unlike a mass market, a niche therefore targets a smaller portion of the population but with more specific and precise expectations.

To illustrate what a niche is, let’s imagine that the global market is a vast ocean. In this vast expanse of water, large companies operate like huge trawlers, catching a wide variety of fish. Conversely, a niche would be comparable to a pond, where a specialized fisherman knows exactly what types of fish he’s looking for and how to attract them.

The fisherman in this metaphor is like an entrepreneur with a good niche: he knows intimately the needs and preferences of his target audience, enabling him to offer a highly adapted and often superior product or service, which in turn attracts many customers.

By focusing on a narrower segment of the market, your company can create tailor-made solutions that respond precisely to your customers’ desires. This specialization not only enables you to differentiate yourself in a sometimes highly competitive market, but also to establish a more precise connection with your customers.

Infographic: The 5 pillars of a perfect niche The 5 pillars that define a perfect niche

How to find a niche in 3 steps

Finding the perfect niche for your business may be a difficult quest, and this difficulty can vary depending on the sector in which you operate. But overall, it happens in 3 steps, and each one brings you closer to your goal of identifying a market segment in which your company can not only get a piece of the pie, but also grow. Here’s how you can do it:

1Identify and understand your market segment

This first step simply involves surveying yourself, asking a few questions. What are your interests? What passions could form the basis of your business? This introspection is crucial, as it determines the authenticity and durability of your commitment. This doesn’t mean you have to choose a niche that matches your own interests or skills, but if you do, it will be much simpler and more beneficial to your project.

Next, ask yourself this key question: what problems can you solve for your customers? The more clearly and precisely you can answer this question, the greater your chances of success. Because if your solution meets a real need and adds significant value to your customers’ lives, get ready to pop the champagne!

Finally, don’t forget to focus on people. Who are they? What are their habits, their desires, their fears? The answers to these questions are also crucial to your company’s success. It’s by deeply understanding the people for whom you’re creating products or services that you can truly address their specific needs, desires or challenges.

Create a persona to better understand your target audience

To really understand your target audience, it’s essential to create a “persona” or “customer avatar”. This creative process used in marketing helps you visualize and conceptualize your ideal customer, making them almost tangible. A persona is a detailed representation of your typical customer, including demographic, psychographic and behavioral aspects. Here’s how to create one:

  • Data collection: Start by gathering data on your current or potential customers. This can include demographic information such as age, gender, location, as well as more specific details such as consumption habits, preferences, and personal challenges. Use surveys, interviews, or even social network data analysis to gather this information.
  • Trend identification: Analyze data to identify common trends or patterns. Look for trouble spots, aspirations, motivations and behaviors that are repeated across individuals
  • Persona creation: Using this information, create a fictional character who represents your ideal customer. Give them a name, a story, goals, challenges and even a photo. The more detailed your persona, the better you’ll be able to put yourself in your customer’s shoes.
  • Practical application: Use this persona to guide all your company’s decisions. Whether in product development, marketing, or customer service, always ask yourself, “How would this could appeal to [name of your persona]?”

By having a well-defined persona, you refine your understanding of your audience. This enables you to create products, services and marketing messages that truly resonate with the hearts and minds of your customers, increasing the effectiveness of your strategies and the loyalty of your customers.

And if you find this task difficult to accomplish on your own, you can find persona generation tools, some of them AI-assisted, on Hubspot, UXpressia or Userpersona. Alternatively, you can visit freelance platforms such as UpWork, Fiverr or UpWork, to find marketers who will take care of it for you.

A sample template for creating a pesona You can find free templates at Canva or Freepik, to create your persona.

2Experiment and evaluate

This second stage involves putting your concept to the test in the real world. This phase is just as crucial, because it allows you to measure the relevance of your idea and adjust it according to the concrete feedback you receive. It’s a period of active experimentation and continuous learning.

To begin with, develop an MVP (Minimum Viable Product), an initial version of your product or service with just enough functionality to attract the first users. And before we go any further, let’s take a look at what an MVP is and what it can be used for.

Understanding the MVP (Minimum Viable Product) concept

The MVP concept, or Minimum Viable Product, is a decisive strategy in product development, especially in the initial phases of a company. The idea is to create a version of your product with just enough functionality to satisfy the first users, and to take their opinions into account for future developments. Rather than investing time and resources to launch a perfectly engineered product, you start with the bare essentials to understand whether your idea meets a real need in the marketplace.

Creating an MVP allows you to quickly test your hypotheses in the marketplace, obtain valuable feedback from your initial customers, and iterate your product based on this feedback. This minimizes risks and costs by avoiding heavy investment in features or elements that might not please your target audience. By focusing on the essentials, you refine your offering and deliver a final product that truly meets your customers’ expectations, ensuring your company’s success.

You’ll understand the importance and benefits of starting with an MVP. And even if this version isn’t completely finished, the aim is to gather feedback quickly. Encourage your first customers to sincerely share their impressions, their likes and dislikes, their frustrations, and the challenges they face with your offering.

This exercise is much more than just gathering information: it’s a real dialogue between your company and its first customers. Each opinion is a valuable piece of the puzzle that will guide you in refining and improving your product or service.

In parallel with the launch of your MVP, be sure to take a close look at your competitive environment. What are your competitors’ strengths and weaknesses? Is there a market segment they’re neglecting? How do their customers react to their products or services? This comparative analysis will give you invaluable information for positioning your offering uniquely in the marketplace.

Finally, forget about the idea of making money immediately at this stage. Your priority is to learn and adapt. This phase of experimentation is an investment in your company’s future, which is why it’s so important to stay focused. And by remaining flexible, actively listening to the market and being ready to change strategy if necessary, you’ll lay the solid foundations for a business that not only responds to market needs but also anticipates them.

Identify your niche and dominate it. And when I say dominate, I just mean work harder than anyone else could possibly work at it.

– Nate Parker, actor and founder of SUMO

3Define and refine your Unique Selling Proposition (USP)

Having explored your market and gathered valuable feedback, it’s time to define and refine your USP. This third step is just as important, but before we go any further, let’s take a look at what it’s all about.

What is a “Unique Selling Proposition”?

The Unique Selling Proposition (USP) is the cornerstone that distinguishes your product or service from those of your competitors. It’s a clear, concise statement that sums up what you offer that’s better or different, whether it’s superior quality, unique pricing, innovative design or exceptional customer service.

Your USP directly answers the customer’s crucial question: “Why should I choose this offer over another?” So it’s your main argument for attracting and retaining customers, by underlining the unique value that only your company brings to the market.

Your USP is therefore the heart of your brand, the message that communicates why your offer is different and better from the competition. And here again, you’ll need to answer questions like: What makes your product or service special? Is it an innovative feature, an exceptional commitment to quality, or perhaps an unrivalled customer experience? Take the time to think about what makes your offering unique, and how it meets a need or solves a problem more effectively than anyone else on the market.

Once you’ve identified your USP, you’ll need to test and validate this proposition with your target audience. Use customer feedback, market research or even A/B testing to assess the impact of your USP. Is it understandable and convincing to your audience? Is the feedback positive? The answers to these questions will help you fine-tune your Unique Selling Proposition so that it really resonates with those you want to reach.

But your work doesn’t stop there. The market and consumer preferences are constantly evolving, and your business needs to adapt accordingly. Reassess your niche and USP regularly. Are they still relevant? Do they still correspond to the needs and desires of your target audience? Can the latest technological developments (AI or otherwise) help you improve your product or service? This ongoing re-evaluation ensures that your business remains relevant, competitive and in tune with your customers’ expectations.

The Ikigai method

The Ikigai method is a Japanese philosophy, or rather method, centred on the search for meaning in life and personal satisfaction. It is based on the idea that by identifying the convergence of four key elements – what you love, what you are good at, what the world needs and what you can be paid for – you can discover your Ikigai, or your raison d’être or vocation. This holistic approach encourages individuals to think deeply about their identity, aspirations and values, and to align them with their day-to-day activities.

In the context of finding a niche, the Ikigai method can be particularly useful as it allows you to target an area of activity that matches both your personal interests and professional skills, while meeting a specific market need. By finding your Ikigai, you can identify a professional or entrepreneurial path that brings you both personal satisfaction and financial success.

By focusing on what you’re passionate about and what you’re good at, you can create businesses or projects that are authentic, meaningful and aligned with your core values.

Infographic: The Ikigai method for finding the perfect niche The Ikigai method can help you find the perfect niche for you.

10 examples of market niches and their sub-niches

Here are 10 examples of commercial niches that are already well exploited, each accompanied by three sub-niches and three micro-niches, representing market segments with promising potential. But you’re free to find other sub-niches and micro-niches.

1Health & Wellness

  • Sub-niche: Nutrition for athletes, yoga programs for beginners, mental wellness for professionals.
  • Micro-niche: Targeted nutrition for long-distance runners, online yoga classes for mothers with busy schedules, stress management programs for executives.

2Technology and Gadgets

  • Sub-niche: Accessories for video games, smart home gadgets (domotics), wearables for health monitoring.
  • Micro-niche: Specialized controllers for professional gamers, smart home security systems, connected watches with advanced medical functions.

3Beauty and Personal Care

  • Sub-niche: Organic and natural skin care, beauty products for men, hair care for specific hair types (curly, fine, etc.).
  • Micro-niche: Organic cosmetics for sensitive skin, beard grooming kits for men, specialized treatments for curly hair.

4Food and Gastronomy

  • Sub-niche: Organic and local foods, specialized cooking courses (vegetarian, gluten-free, etc.), weekly box of fresh fruit and vegetables.
  • Micro-niche: Baskets of permaculture-grown seasonal produce, online vegetarian and allergen-free cooking workshops, regional gourmet meal delivery services.

5Fashion and Accessories

  • Sub-niche: Ethical and sustainable fashion, luxury accessories for pets, clothing for specific activities (climbing, diving, etc.).
  • Micro-niche: Eco-friendly children’s clothing stores, ethical and handmade cat accessories, exclusive lines of yoga outfits.

6Travel and Leisure

  • Sub-niche: Wellness or spiritual retreats, local gastronomic tours, eco-responsible adventures.
  • Micro-niche: Meditation seminars in the mountains, local wine-tasting tours, eco-lodges in the jungle.

7Education and learning

  • Sub-niche: E-learning platforms for specific skills (coding, design, etc.), personal development courses, educational materials for home schooling.
  • Micro-niche: Online courses for mobile application development, webinars for self-confidence, interactive educational kits for children.

8Gardening and landscaping

  • Sub-niche: Hydroponic solutions for indoor cultivation, landscaping workshops for urban balconies, intergenerational shared gardening programs.
  • Micro-niche: Vertical gardening kits for apartments, design services for small outdoor spaces, community gardening clubs for seniors.

9Pets

  • Sub-niche: PHealth and wellness products for pets, specialized daycare and training services, travel accessories for pets.
  • Micro-niche: Natural food supplements for senior dogs, online training programs for puppies, premium carrier bags for cats.

10Sustainable development and ecology

  • Sub-niche: Zero waste products for the home, renewable energies for small businesses, recycled clothing and accessories.
  • Micro-niche: Collections of compostable tableware and utensils for picnics, plug-and-play solar systems for sailboats, barter platforms for second-hand clothes.

Each niche and sub-niche offers a world of opportunities, meeting specific and often under-served needs.

If everybody is doing it one way, there’s a good chance you can find your niche by going exactly in the opposite direction.

– Sam Walton, founder of Walmart

Online tools and services for finding the perfect niche

The search for the perfect niche can be greatly facilitated by the use of specialized online tools and services. These resources offer valuable data, insights into market trends, and information on the competition, helping you to make informed decisions in your quest for a profitable niche:

  • Google Trends: I’ve mentioned this before. This free tool allows you to understand search trends over time, compare the popularity of search terms and uncover specific regional data, which is invaluable for assessing niche interest and seasonality.
  • SEMrush: SEMrush offers a complete suite for keyword analysis, competitor research and SEO auditing of your site. It’s an excellent tool for gaining an overview of niche opportunities and competitor strategies.
  • Ahrefs: Similar to SEMrush, Ahrefs provides detailed data on keywords, backlinks and competitor content. Its “Content Explorer” is particularly useful for discovering popular topics in your potential niche.
  • BuzzSumo: BuzzSumo helps you discover the most shared content on social networks in any field, giving you an idea of what might appeal to your target audience.
  • Ubersuggest: A simple, intuitive tool for keyword research, competitor analysis and content suggestions. It also offers insight into search volume and keyword trends.
  • AnswerThePublic: This tool provides valuable insights into the questions people ask online. It’s great for understanding the concerns and pain points of your target audience.
  • Social Media Platforms: Instagram, Pinterest, Facebook, etc., aren’t just for sharing content, they’re also rich mines of information on current trends, consumer preferences and emerging niches.

Artificial Intelligence Tools for Market Analysis

Note that there are also AI-based tools such as MarketMuse or Clearscope, which use advanced algorithms to analyze content, identify gaps in the market and suggest optimized content strategies. These tools can help identify less saturated but high-potential niches by analyzing large amounts of data and providing recommendations based on SEO best practices and market trends.

Using AI offers a more sophisticated approach, enabling you to discover unique opportunities and strategically position your business in a niche well suited to your profile and the market.

11 tips for finding the best niche for your business

Finding the perfect niche for your business won’t be easy. In addition to the main themes I’ve covered, I’m now offering a series of practical and strategic tips to guide you in this exploration, and increase your chances of finding a niche that not only complements your passions and skills, but is also viable and profitable in today’s market.

  • Listen to your passion: Start with what drives you. I emphasize this point because a business based on a passion or personal interest is more likely to thrive, as it’s fueled by genuine motivation and deep commitment.
  • Follow trends, but with caution: Keep an eye on emerging trends, but don’t blindly commit to them. Analyze whether a trend has the potential to become perennial or whether it’s just a passing fad. Your niche should have longevity, not disappear with the next wave.
  • Adopt an ecological approach: Consumers are increasingly aware of environmental issues. A niche that offers ecological or sustainable solutions can not only set you apart, but also align you with the values of today’s consumers.
  • Evaluate barriers before you launch: Some niches may be attractive but difficult to access due to strict regulations, high start-up costs, or a high concentration of competitors. Weigh these factors carefully before committing yourself.
  • Identify unmet needs: Look for areas where customers’ needs are not fully satisfied by current offerings. An unmet need is an open door to a potentially lucrative niche.
  • Analyze the competition: Study your competitors. Strong competition may indicate a saturated market, but the absence of competition could mean there’s no demand. Find a balance by looking for markets with reasonable competition, but opportunities to differentiate.
  • Do market research: Use tools such as Google Trends, online forums, or Facebook and LinkedIn groups to understand current discussions and trends. This can give you ideas for in-demand niches or sub-niches.
  • Test your idea: Before making a full commitment, test your idea on a small scale. This may involve creating a product prototype, launching a minimum viable version or surveying your target audience.
  • Evaluate profitability: Make sure your niche is not only interesting, but also profitable. Analyze revenue potential, start-up and operating costs, and long-term viability.
  • Be flexible and ready to pivot: The market is constantly evolving, and what works today may not work tomorrow. Be ready to adjust your offering, pivot or even change your niche altogether if necessary.
  • Cultivate patience and perseverance: Finding the right niche and turning it into a successful business takes time. Be patient and persistent, and don’t be discouraged by obstacles or slowdowns.

Conclusion

Finding the perfect niche for your business requires thought, insight and a good dose of creativity. Your mission, should you decide to accept it, is to strike a balance between competitiveness and popularity, the ideal being of course to have a very low level of competition and a very high level of popularity (the holy grail!).

But does this mean that you have to avoid highly competitive niches? Not necessarily, no. Not if you come up with an idea that offers distinct and innovative value to the market. In my case, for example, I took the risk of choosing a highly competitive niche (“how to make money”), because I had an innovative concept to contribute (the filtering system for proposed ideas). I’ll talk more about it in this article, if you’re interested.

But if you don’t have a revolutionary concept to “play in the big league”, it’s best to look for a less exploited niche. And to find the one that suits you best, you’ll need to proceed in 3 steps, as I have explained above. These 3 steps will enable you to lay the foundations of a business that doesn’t just coexist in a vast market, but shines with its own brilliance. Each step is a brick that builds not only your market presence, but also your relationship with your customers.

As a final tip, never forget that perseverance and flexibility are your best allies. Markets evolve, trends change and consumers constantly renew their expectations. Stay agile, ready to learn and evolve. Engage in a process of continuous learning and improvement, for it is in this dynamic that your company will find not only a profitable niche, but also a path to sustainable growth.

This article could be completed or improved with your help. Feel free to leave a comment below if you have any question, a relevant remark, a feedback, additional information or spotted any error.Go to comments

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4 comments

  1. Finding the perfect niche for you should start with a list of 5-10 things you naturally like to do. Do you like woodworking? Then dig deeper in that big niche and find a sub-niche that fits your interests. And yes, you should be using the tools you’ve mentioned like Google Trends, BuzzSumo, Ubersuggest, ATP, etc.

    Reply
    • Thank you Kaitlyn for this additional information. I agree with you. Finding the right niche is a key element in ensuring the success of many of the ideas I’ve talked about on this site.

      Reply
  2. For me, it’s testing the ideas that is really important. I’ve had a lot of ideas that could and should have made money but they didn’t. Nowadays I don’t start something without testing it first. I prefer to invest time into this research and testing phase than start something that I’m not sure will do well.

    Reply
    • That’s excellent advice, Eric. 👍 I totally agree with you and have said so many times in my articles. In fact, I’m thinking of writing an article entirely dedicated to this subject in the near future.

      Reply

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