5 Criteria For Choosing a Profitable Niche

What is a niche?

In the online space you only have a few seconds to capture someone's attention. If you sound too generic, people will have doubts as to whether your service/product is perfect for them. And they'll be gone and onto the next website.

That's why it's important to find your niche. A niche is a specific and well-defined subset of your target market. Having a well-defined niche means that when someone comes across what you have to offer, they'll think: Wow! You're talking to me!

For example, if you're a health coach and you're looking to work with someone to help you with creating Facebook ads, which person would you choose?

Social media manager
Social media manager for online businesses
Facebook ad specialist for online businesses
Facebook ad specialist for health coaches

It's going to be the last one, right? Because you look at that and you think, hey that's me and that's what I need.

So what are the criteria for a great niche?

#1 - Do you love it? Can you spend hours talking about it?

There's a big difference between someone talking about something vs someone who is genuinely passionate about a specific topic. When you love your niche, you'll be able to speak passionately from your heart and people can feel that.

Running a business, especially if you're starting a side hustle, take a lot of hard work and dedication. Getting up early and staying up late. Trying to work on your business while your children need your attention. Fitting things in whatever spare time you have. Thinking of different ways to talk about your topic. Looking for ways to be different and stand out. You've really got to love it to be able to get through the grind.

If you're still working on your niche, try this exercise:

Write down 5 things you're passionate about.
Write down 5 things you're good at.
See if there's any overlap.

If you've found your niche already, share it in the comments with us below. Why are you passionate about it?

#2 - Are other people selling successfully in that space?

You may think that a good niche should have no competition so you can dominate the market. The truth is, 99% of the time, the reason why there's no competition in a niche is simply because there's no money to be made. Of course, if you're already ultra successful and have a lot of time and money to test a niche where there's no competition, then go for it. Otherwise, a niche where there's a healthy dose of competition is a good thing. It means that other people are successfully making money in it.

Ultimately, a great niche for you is one where your passion and expertise overlap, and one in which enough people are willing to spend money on. Let's face it, unless you're doing something purely as a passion project, your business needs to make money for it to be viable and sustainable.

A healthy competition also forces you to be the best you can be in that niche, and provides opportunities for collaborations with others in the same field.

So how do you find out if others are already selling successfully in your niche? Here are some ways you can do your research:

Are there other businesses out there already selling similar services/products in your niche?
Are there established websites / blogs that focus on that niche?
Are there books (including ebooks and audio books) and products that are selling well in that niche? (Amazon is a great place to do research on this.)
Can you find magazines and other publications on that niche?
Are there Facebook groups / pages that focus on that niche and have a decent amount of engagement?
Are there online forums that focus on that niche where plenty of people gather to discuss things and ask questions?
Are there offline meetings and support groups in that niche?
Run a Google search on the words and phrases in your niche and see what comes up.
Do the same search on YouTube.
Do a search on Udemy to see if others are successfully selling online course in your niche.

#3 - Is your target audience easy to find?

To have a successful business, you must be able to market to your target audience and put your offerings in front of them. So it's important that you are able to find your target audience easily, either on- or off-line.

Are there blogs, website, forums and social media channels where your target audience already hang out online?
Are there off-line events and get-togethers where you can meet them in person?
What activities do they take part in where you may meet them?
Look at your personal network - people you already know. This includes clients, former clients, prospects, vendors, friends and family. Do they include people in your target market? And do they know others who belong to your target market?
Do you regularly see people talking about services/products you can provide?

#4 - Is it a sub niche in a larger market?

Right, what's a sub niche? A sub niche is simply a smaller segment of a much larger market.

The larger markets already have a lot of people marketing in them (Examples: Health, Dating, Money, Parenting, etc.) That's not a bad thing in itself. It shows that it's a healthy profitable market. But it does mean that it's much more difficult to compete in them. You'll have more more chance of success if you narrow down into a sub niche of a popular wider market, where there's still a lot of demand but much less competition.

For example, pets is a huge general market. Calling yourself a Pet Specialist is not very helpful.

Dogs is smaller, but still very broad.

Dog breeding is smaller still.

Breeding German Shepherds is a sub niche.

More examples:

Health >> Healthy eating >> Healthy meals >> Quick Healthy meals for busy mums

Health >> Weight loss >> Weight loss for men >> Weight loss for men over 50

Making money >> Making money online >> Ecommerce >> Building ecommerce sites for craft makers

Gardening >> Urban gardening >> Growing your own food >> Growing vegetables in the city

Dating >> Dating for women >> Dating for women after divorce

Take a look at your niche, is it small enough so that you can differentiate yourself sufficiently from the masses and become and authority in your field?

#5 - Can you think of at least 3 things you can sell in that niche?

If you want your business to succeed, you need to be able to make money from it. So, can you think of at least 3 services or products you can sell in your niche?

If it sounds daunting, remember that you can start by selling small info products such as ebooks, PDFs, mini courses, etc. Or you can sell your expertise as a coach or consultant.

Using one of the examples from above:

Ebook: Understanding weight loss challenges for men over 50

Self-study course: How to lose weight and feel great for men over 50

Coaching: A 6-month coaching program where you work with men over 50 on a 1:1 basis and help them lose weight

As your business grows you will find many more ideas about what to sell, but having 3 things to sell is a good starting point.

I hope that gets you thinking about finding a profitable niche. What is your niche and why are you passionate about it? Leave a comment below. I'd love to know.