Looking for a New Business Idea? Here’s How to Identify What People Really Need.
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As a would-be entrepreneur, it can sometimes be tempting to think that all the good business ideas have already been taken. When practically every industry seems to be overwhelmed with businesses (particularly in the e-commerce age), it can seem hard to find a way to stand out from the competition.
In reality, however, there are still plenty of opportunities out there for entrepreneurs who are willing to dig a bit deeper. By looking for niche, underserved needs in their industry of choice, entrepreneurs can develop new and very successful brands of their own.
As it turns out, you don’t have to try to serve everyone to create a successful business.
1. Consider your own interests and underserved needs
While pursuing your passions is a cliche starting point for any entrepreneur, it is particularly important when you are trying to identify more niche needs. By focusing on your own interests, it can be easier to identify areas where your own needs currently aren’t being met.
Brainstorming a list of your skills, hobbies, interests and problems that you’d like to see solved in your own life can serve as an invaluable starting point for finding niche opportunities.
Sometimes, entrepreneurs can even identify niche business opportunities by combining aspects from different interests. On a smaller scale, this can easily be seen on sites such as Etsy, where, as one example, you’ll find products that combine an individual’s talent for laser-cut wood art with their interest in video games.
Related: 6 Steps to Turn Your Passion Into a Career
2. Evaluate what others in your industry don’t offer
If you already have a particular industry in mind, it can be helpful to conduct competitor research. Don’t just look at what others in your industry offer — look across multiple companies’ websites so you can get a better idea of specific products or services that aren’t generally available.
This stood out during a recent conversation with Ashley Sarnowski, co-founder of Sunnie Hunnies. As she explained, “We found our niche focus of super soft swimwear for newborns and toddlers in part because it was an issue that had come up within our own families. However, what really helped give us the drive to launch our own product was doing research and seeing that the type of products we were looking for didn’t really exist in the current market. Our research gave us the confidence that we could offer something unique in a crowded market.”
You can go outside your own experiences and get ideas for niche needs by surveying others in your potential target audience. You could start with family, friends or business associates, or you could go to internet communities and take part in their conversations.
Pay attention to the problems people are experiencing, the products or services they wish they had or the questions they are asking. Consider how these pain points and desires relate to your niche, and how you could use your skills and knowledge to provide a meaningful solution.
Aside from evaluating audience problems and needs, dig deeper so you can understand their buying behaviors and motivations. By more fully understanding the persona of your target audience, you won’t just be better able to develop an on-point niche product or service. You’ll also know how to market it effectively.
Related: 5 Steps to Creating Effective Customer Surveys
While your own personal experiences or anecdotes from friends and family can help you identify underserved needs, not all niche ideas are created equal. Before going all-in on a niche business idea, you should conduct keyword research to validate its potential.
According to NerdWallet, “If a keyword has under 500 searches per month, you are facing an uphill battle in terms of demand. ‘Ideally, you want between 1,000 to 2,000 searches per month. With a number like that, you can test your product without burning through cash.’”
On the other hand, if a keyword has a higher than expected volume of keyword searches, it may not be as niche or underserved as you originally anticipated. Tools like Google Trends can also help you see how interest in a keyword rises and falls over time, or whether a particular product or service experiences seasonal fluctuations in demand.
Just because other competitors already exist within your desired sub-niche doesn’t mean you can’t enter this space. Use your initial keyword research as a launchpad to identify what you can offer that is different or better so you can make a big impact in these smaller markets.
Niching down to find success
Finding the right products or services for the right niche can ultimately allow your business to become far more cost-effective and successful than if you tried to target a broad audience.
While focusing on a smaller niche means the total potential audience is smaller, brands that focus on a more specialized audience often become much more profitable. With less competition and the ability to engage in more highly targeted marketing, entrepreneurs can engender significant brand loyalty and word-of-mouth growth. By being one of the first to establish a foothold in your niche, you can also dominate SEO.
By putting in the effort to work with niche, underserved markets, you create a true win-win scenario for yourself and your customers.