When you’re itching to start a business and just don’t know where to start, it’s time to harness your inner Max and Caroline (a la Two Broke Girls).
What we are saying is, find your niche.
TL;DR: To find your niche, think of an idea that will make you money, and whittle it down to the bare bones. Then, start layering the value adds and your unique selling points. Tada! Think of a product or service you’re already buying and how you can apply your skills to get paid for a similar product or service. Learn to focus on your moneymakers and stop stressing about those niggly smaller details that don’t mean a thing to your bottom line. By following a few simple steps, you’ll have an income-generating niche in no time.
How to find your niche: the basics
We all know that one person who seems to come up with new business ventures every couple of years. Whatever they put their hands on just seems to blow up into the next best thing. Every single dang time. How the hell do they do it?
They’ve cracked the code of unlocking goods and services that people will pay for. It’s as simple as that, but let’s unpack that a little further. Ramit gives us a few simple steps to identify a niche:
Step 1: Finding the “what”
It’s a lot easier to come up with a money-making idea than you think. In fact, you probably have a few ideas mulling about in your head right now. The problem for many, however, is turning their thoughts into a small business.
So how do you do it?
You start with 3 to 5 items or services you already pay for. If you’re paying for it, it’s likely that someone else will too.
Step 2: Combine Step 1 with your current skillset
Use your skills. If you’re getting paid to do something, it might just work as a business idea. It might also be something you’re doing in your free time or received training for before.
Ask yourself this: What skills do I have and how can they make me more money? Whether you have mad carpentry skills or you’re known for your aesthetically pleasing knack for paint selection, there’s an opportunity to monetize.
Step 3: Harness your hidden talents
This is the part where you gather all your friends around the fire pit for some marshmallows and ‘Kumbaya.’ They need to tell you about things they think you’re good at. Ramit says look for things like “You give really good relationship advice.”
It might also be a little more subtle than that. If you’re the person in the family that teaches everyone how to do their taxes or organize their garage, you might want to look up a few courses and monetize your skills.
Step 4: Test for profitability
The only way you’re going to guarantee yourself a payday by marketing your skill set is by testing the odds that someone will pay you for your service.
Ramit calls this test the Pay Certainty Technique.
- Who is your ideal customer?
- Would they have the ability to pay?
- Would they have the willingness to pay?
You’ll need to harness your people skills and ask your target market those questions.
For instance, a high-powered executive will have the willingness and ability to pay for a mobile tailor. A recent graduate, on the other hand, might have the willingness but not the ability. Making sure your idea is profitable is the key to find your niche.
Step 5: Understand your niche’s Demand Matrix
It’s not always possible to know where your particular product or service will land before you’ve actually entered the market, but a little research will go a long way.
Sometimes, you might even have to put it out there before you know whether your chosen target audience has the ability and willingness to pay for it.
Ramit puts it this way. Your business will fall into one of four quadrants on the Demand Matrix.
- High-End: High price and few customers. Think luxury brands.
- Golden Goose: High prices and lots of potential customers in this category. Think expensive gadgets that are must-haves to millions of customers across the globe.
- Mass Market: Low prices and lots of customers. Millions of products and services fall within this category such as everyday items and even groceries.
- Labor of Love: Low prices and few customers. No! No! No! Get the heck outta Dodge! You will not make money with this. If you’ve already started, stop.
Step 6: Separate yourself from the competition
You already have an idea, but the idea is not what’s going to get you customers. It’s your unique selling point. This means value adds that will convince your future customer base why they should use your product or service, and better yet, why they should pay good money for it. Think intuitive apps, personalized gifting ideas, heck, anything that will make your product or service pop. Here’s a hint: think of value adds that will get you giddy with excitement.
Get super specific about who your market is and what you offer that no one else does. Perhaps you love pet sitting. There are many other pet sitters out there, so how do you set yourself apart? Tell your target market that you provide pet sitting with daily updates and pictures, details on noted behaviors, and that you’re certified in animal CPR. Your target market will get smaller, but the price you can charge is higher.
Finding your niche really is easier than you think
As long as you don’t get caught up in the small details like printing out business cards and setting up the right font for your branding, you’re off to a good start. Don’t get us wrong, those things will matter at a later stage. For now, focus on the moneymakers such as getting your first three clients.
If you’re ready to find your niche and start living your rich life, why not sign up for our Earnable course? Whether you’re conceptualizing business ideas or looking to scale existing ones, the course has over 42,000 paying customers as a testament to its reach.