Some of the most successful entrepreneurs rose to prominence with daring, revolutionary ideas. They debuted innovative business models, capitalized on untapped markets, or offered products or services no one had ever seen before. This created the widespread notion that entrepreneurship can only mean stepping way, way outside of the box.
But contrary to popular belief, today’s entrepreneurs don’t have to reinvent the wheel to achieve success. Many new businesses come from the same industries we all know and love. So, if you’re wondering what kind of business to start, there’s still plenty of opportunity in the more conventional routes.
You just have to figure out which industries make the most sense from the perspectives of demand and your personal skill set. From there, you can filter your options even further with factors like work environment, budget, etc. Then, it’s time to put that brain to work and determine how you can surpass the efficiency and execution of your competitors.
To help with these questions, we’ve compiled this list of business ideas that continue to hold substantial relevance in 2020. Regardless of the state of the economy, you won’t have to look far for customers in the industries described below.
In this guide, we’ll answer the following questions:
- What are the Best Home-Based Business Ideas?
- What are the Best Business Ideas for Creative Entrepreneurs?
- Which are the Best Food Service Business Ideas?
- What are the Best Business Ideas for Tech Entrepreneurs?
- What are the Benefits of a Niche Market?
- How Do You Find a Niche Market?
What are the Best Home-Based Business Ideas?
If you’re especially concerned about saving money and work hours, your most logical business idea might be working from home. You can make your hours, avoid crushing expenses, and still earn just as much money as a traditional entrepreneur. As long as you meet your financial requirements, you can take days off as you please.
Here are some of the best home-based (or mostly home-based) business ideas:
An increasing number of companies are outsourcing administrative services to remote workers. Virtual assistants communicate through instant messages while using online tools to keep track of files, schedule calls, and meetings, assign and keep track of tasks, and more. As for expenses, all you need is your laptop. The most essential skills are organization and multi-tasking, as your workload will likely escalate very quickly.
Freelance writing can be an incredibly idyllic career, but building a readership base takes a lot of work. You have to market yourself very aggressively and take any assignment that gets offered to you. For this reason, your specialty will likely turn out to be whatever you write about most, as opposed to your personal interests. Eventually, you’ll reach the most coveted position for freelance writers: Getting the bulk of your work through referrals and only having to accept assignments that fit your specialty.
The incredible demand for rideshare drivers is showing no signs of slowing down. Few other jobs allow you to choose your hours. And you don’t have to learn any new skills, aside from becoming more familiar with particular routes. This job is especially appealing for residents of smaller, up-and-coming areas since you’ll have less competition and more demand.
Accounting and Bookkeeping
The responsibilities of accountants and bookkeepers tend to overlap as they grow closer to their clientele. But all accountants must have CPA licenses, whereas bookkeepers technically don’t need any certifications. Accountants typically help business owners file taxes, create financial statements (income statement, cash flow statement, balance sheet) and offer strategic advice related to cash flow and profitability. It’s the accountant’s job to provide an accurate picture of your financial health and explain what you can do to improve it.
Bookkeepers, on the other hand, typically stick to processing invoices, managing payroll, creating expense reports, and maintaining up-to-date and organized records. These days, bookkeepers must also master the most popular accounting software tools for small businesses.
The perennial need for accountants and bookkeepers makes this profession one of the most lucrative in existence. You’ll have minimal expenses if you work from home, which will come in handy during tax season when accountants and bookkeepers get so busy they have to work into the night.
If you thrive on new challenges, marketing might be the career for you. Every business has its own obstacles preventing them from reaching more customers and standing out from the crowd. Examples include competition, budget, audience, new technology, etc. Marketers must figure out how to conquer each client’s unique obstacles (there’s usually more than one) while creating the content their audience wants to see. Yup, it’s just as hard as it sounds.
That’s why there are so many marketing firms out there. Regardless of their track record, no firm has the winning formula that works for every type of business. What works fabulously for one company could do absolutely nothing for another company in the same industry.
But this also gives independent marketers more opportunities to outperform their larger competitors. You don’t necessarily need a massive budget to develop and correctly execute the right strategy. Smaller businesses cannot afford in-house teams, so they’ll depend on you to determine effective techniques for bringing in more customers. Much of your job will likely consist of gathering data on audience behavior and then taking the most sensible course of action.
Securing your initial clients might not be too difficult since you can offer the key to any successful campaign: time.
Social Media Management
Virtually all businesses need social media, but very few entrepreneurs know how to craft the perfect post on the right channel for their audience. Social media specialists have the leading platforms (Facebook, Twitter, and Instagram) down to a science. After researching the business’s audience and competitors, they can put together posts that adhere to strict guidelines without seeming unoriginal or disingenuous. If the quality of your posts starts to decline, your followers can easily find another account that shows them what they want.
In addition to composing posts, social media specialists spend lots of time responding to followers and studying data. Tremendous thought must go into each caption and image. And after all, many companies look at social media when deciding which products or services to offer next.
The role of technology has increased dramatically for small businesses. Many entrepreneurs, however, don’t know how to use the tools required for their industry. Like marketing, smaller companies don’t have the funds to hire an in-house IT professional. It makes more sense to outsource these services, which include installing the technology, keeping the tools up to date, and troubleshooting when difficulties arise (and they always do).
Instead of specializing in specific industries (real estate, finance, etc.), plenty of IT consultants help small businesses improve their websites, launch Ecommerce services, or build their apps.
Public relations specialists and marketers have similar goals but use different resources. Instead of emails and advertisements, PR specialists form connections with other companies and individuals to increase the client’s exposure. They arrange press coverage, appearances at busy events, or inclusion in anything media-related. For example, if an audience favors certain publications, TV channels, or podcasts, PR agencies can work their magic to get their clients in the spotlight.
In addition to maximizing their networks, PR agencies develop eye-catching stories so their clients that can increase their popularity. Many businesses don’t know how to sell themselves or become more likable. That’s where PR agencies come in.
What are the Best Business Ideas for Creative Entrepreneurs?
All entrepreneurs must have visions of their goals, but creative entrepreneurs take this to another level. They can picture the finished product in their heads and use their artistic mode to put it into action. While their work might not always suit their personal taste, they can still apply the same meticulousness and imagination that goes into all artistic endeavors.
Here are the most in-demand business ideas for creative entrepreneurs:
Freelance photography has very low startup costs, which allows new professionals to charge small fees for all sorts of occasions. Established photography companies are notoriously expensive. But today, someone can just pay a freelancer with a digital camera a fraction of the price for the same quality photos. Your clientele would, therefore, consist of the countless people who don’t want to pay an arm and a leg for pictures of their wedding, engagement, or family. Small businesses also require professional photography when the time comes to re-do their websites.
If you don’t think event planning is an art, then you’ve never seen a professional at work. Consider all of the materials used in big parties: invitations, table settings, music, photo booths, the list goes on. Event planners devote incredible attention to the tiniest details (i.e., font, color scheme, etc.) of these materials to create the perfect day or night for their clients.
Few careers are born out of personal hobbies more often than event planners. Most of them have been doing their jobs their whole lives, but just weren’t getting paid. And since so much work goes into each job, it only takes one successful party to launch a career. With all the referrals from your first client (and the more appreciative guests), you might have to start building your team much sooner than expected.
To an outsider, graphic design seems pretty complicated. Anyone who does it for a living, however, will confirm that this is undoubtedly not the case. Many professional graphic designers only needed a few short courses and inexpensive computer programs to start their businesses. Typical tasks include new websites, company logos, advertisements, and much, much more.
In addition to creative flair, arguably the most essential attribute for this job is patience. Your first clients will likely have trouble expressing exactly what they want. New freelance designers will quickly get used to making corrections over and over again, even if they followed the client’s directions to a tee. Once you establish a track record, you’ll have more control over the projects you accept as well as their turnaround times (due dates).
Freelance designers often enlist their services on reputable websites like Behance and 99designs. These sites can also be used to seek advice from other designers, such as the average turnaround times for different projects, and how to negotiate better compensation.
The demand for video production, especially in advertising, has skyrocketed as of late. Research has shown that video advertisements on social media draw attention much more effectively than traditional ads. Many business websites center their homepages around introductory videos as well. Videos can benefit any business that makes products requiring instructions or wishes to educate their audience about their industry or services. For these industries, you could even say that video marketing has become as essential as social media marketing as a whole.
Much like graphic design, all you need to become a video production specialist are a few online courses, and just one or two tools. And once your videos go live, you won’t have to put much effort into marketing yourself. Your work will do that for you.
Handmade Item Designer
Compared to the other job ideas in this section, handmade item designers have significantly more requirements for success. It’s not enough to create unique designs with high-quality materials for a competitive price. Designers must also know the size of their audience, how they plan on marketing their products, and be able to guarantee exceptional customer service. There’s serious competition in arts and crafts, so you can’t just assume that people will organically find your products and buy them because they look beautiful.
Customers on sites like Etsy, for example, often base decisions on reviews. Your first customers must therefore be pleased enough to leave glowing reviews and advertise your products on social media for free.
Employees of cosmetic stores (Sephora, Lush, etc.) already put makeup on strangers for work. Why not earn some extra cash doing this on their own? People need professional makeup jobs for all sorts of occasions: proms, weddings, or even just an upscale party. While some makeup artists have makeup stations with good lighting at their homes, most offer to visit their customers’ houses.
As for marketing, makeup artists must focus on their busy season (prom and wedding season) and build an online presence. For example, you could start your YouTube channel where you show viewers how to look like their favorite celebrities or simply apply certain styles.
What are the Best Food Service Business Ideas?
Despite the countless uncertainties of entrepreneurship, at least one rule still holds up: people will always love good food. It’s relatively safe to assume that if you like an item, many others will most likely love it too. Yes, there’s tremendous competition and revenue tends to fluctuate dramatically throughout the year. But no matter what happens, your recipes will never stop producing the desired result. As you can see, there’s a sense of order in foodservice businesses that you can’t find in other industries.
Here are the most logical business ideas for food-obsessed entrepreneurs:
People are busier than ever, but they also enjoy discovering new, unique items. The combination of these two preferences has opened up a marvelous opportunity for food trucks. Items sold in food trucks probably wouldn’t sell as well in traditional restaurants, hence the need for extra exposure. And as any restaurant owner knows, there’s already plenty of risks in this business.
Food trucks can gain traction at community fairs, farmer’s markets, or corporate complexes within major cities. Location plays a massive role in restaurant success, so you’d better capitalize on your larger array of options. In order to start serving customers, you’ll have to obtain the necessary licenses and permits, which might include city ordinances specific to mobile restaurants.
Restaurant or Café
The restaurant business is one of the most challenging and expensive businesses in existence. Most restaurateurs started their businesses because they craved the lifestyle that comes with it. You’ll spend more time at your restaurant than with your family or friends, and few types of teams are closer than restaurant staff. Adrenaline junkies will relish in the incomparable rush of a busy night. The level of risk is attractive as well: If you win, you win big.
If you love the restaurant atmosphere but would rather avoid the risk of opening your own, consider opening another franchise location instead. It’s much less expensive, and you’d get to skip one of the most difficult tasks of new restaurants: marketing a completely unknown business.
Ice Cream/Frozen Yogurt Shop
Another cheaper alternative to a full-service restaurant is an ice cream or frozen yogurt shop. These businesses do exceptionally well in small towns, especially those with lots of families and summer activities. Getting through the colder months could be an issue. But plenty of independent ice cream or frozen yogurt shops were able to find solutions. For example, it’s common for these businesses to maintain cash flow through special deals, like Carvel’s buy one get one free deal every Wednesday.
What are the Best Business Ideas for Tech Entrepreneurs?
Tech-savvy people have a myriad of career options, though some are more practical in terms of cost and demand. The following ideas can also begin providing steady income very early into your career.
Website Development and Design
The availability of low-cost web development and design services is a comfort to countless tech-phobic business owners. Far too many small businesses have outdated websites in need of significant improvement. They often work in similar industries resources necessary and know plenty of other companies looking for the same services. So, if you establish a reputation within the right community, opportunities will be coming your way left and right. When you’re starting companies, you might want to use sites like Upwork to score your first jobs and speak to experienced web developers about appropriate price points.
eCommerce is all about marketing and connections. If there is a demand for your products and have an idea of where to market them (social media, events, etc.), it is entirely feasible to launch yet another successful eCommerce business. Most of your predecessors likely took full advantage of the fact that eCommerce stores are open 24/7. Capitalizing on this opportunity would surely maximize your earning capacity.
What are the Best Small Town Business Ideas?
The business idea that you choose will most likely fulfill three qualities: profitability, sizable market, and alignment with your personal passions or goals. Here are a few ideas that are statistically more likely to achieve the first two:
You’d be amazed by how many small towns still don’t have trendy coffee shops. In addition to the quality of the products, people love coffee shops because of their atmosphere and complementary offerings, like pastries or healthier snacks. Your customers must have a reason to choose your business over Starbucks, Dunkin’ Donuts, etc. Many independent coffee shops compete with franchises by creating an environment that is so comforting that people don’t want to leave.
Like restaurants, location plays a major role in the success of coffee shops. They must be situated near other businesses to maximize foot traffic, as well as near or on busy roads so customers can stop on their way to work. The goal of every coffee shop is to have customers coming in from dawn until dusk.
If your grocery store is your town’s main source of alcohol, the local liquor market may be up for grabs. Alcohol broader one of the few “recession-proof” industries because people buy liquor no matter what shape the economy is significant. The challenge of starting such a lucrative business is staying compliant with local regulations and taxes. You’ll need to secure substantial documentation, including the notoriously expensive liquor license. a specific is one business where it pays to follow a guide as you acquire the necessary resources for launching operations.
Handyman or Tradesman
Young adults are often advised to look to the future when choosing career paths. What kind of workers will be in higher demand throughout the coming years? Well, you can’t deny that technology has made much of the world less comfortable fixing things they used to themselves. If there’s one profession that will undoubtedly be in higher demand in the future, it’s handymen and tradesmen.
Anyone who knows a good local handyman will tell you the incredible peace of mind it brings. You don’t have to worry about what you’ll do when pieces of your house start to deteriorate, and you know your friend won’t overcharge you. As you can see, becoming the go-to handyman in your town can make you very popular very quickly. And since you’ll get new business primarily from word of mouth, you don’t have to spend an arm and a leg marketing yourself.
Auto shops are the quintessential small-town business. Unfortunately, this industry has a reputation for overcharging new customers and taking advantage of their unfamiliarity with automotive systems. That’s why so many people stick with the same auto shop for their entire lives. Once you find a local shop you can trust, why risk going anywhere else?
Also, small towns are usually far away from dealerships or big cities, and no one wants to drive too far to get their car serviced.
Lots of small towns have massive populations of pet owners. But before opening your own pet-related business, you must make sure that these pet owners don’t already have a go-to resource for the products or services you plan on offering. Talking to local pet owners will connect you with owners of existing pet-related businesses, who can then tell you which products or services their customers are looking for. Examples include grooming, dog walking, or pet sitting.
Demand for pet sitting has increased dramatically since more pet owners realize how stressful it is to leave their furry friends home alone all day. When you aren’t feeding, walking, training, and cleaning up after pets, you’ll be spending your day just hanging around your customers’ houses. For this reason, many pet sitters use this opportunity to do other work. This is a great way to make money from two jobs at the same time. Combining pet sitting and another source of income will also keep your overall stress level low. Rather than pouring yourself over one source of income, you can devote a similarly moderate amount of energy to both jobs.
Despite tremendous advancements in educational technology, there will always be children who need additional help with their studies. Tutoring can be a fulfilling and practical option for aspiring entrepreneurs who are passionate about literature, science, or math. Very few other entrepreneurial ventures are directly related to these subjects. You’ll finally be able to put all those academic awards you won to good use.
The key to success with tutoring businesses is building relationships with local parents. Gaining the trust of the right parent could grant you access to an entire network of other parents with similar needs. But this can only happen if your first students achieve their goals. Tutors must be careful not to take on enough work to compromise the quality of their services. You should also be sure to choose the right age level (elementary, middle school, or high school) for your teaching style. And since your target customers are parents, it’s incredibly advantageous to have an understanding of both traditional and digital marketing tactics (social media, Google AdWords, etc.).
Lots of people (especially young adults) despise cleaning but don’t know anyone willing to do it for them. Thus, the discovery of an affordable and trustworthy home cleaning service would likely trigger an abundance of word of mouth referrals.
This is a fabulous business idea if your town has a high young adult population and you know how to take advantage of very low overhead. Aside from cleaning supplies and a company vehicle, there are little expenses involved. Once you start taking on larger jobs, however, you will accrue more expenses and need to hire a team.
Brewery or Winery
The same goals as clothing boutiques often inspire local breweries or wineries. They give residents a locally-made product that they can proudly show off to their friends. The products are shaped after the town’s personality, and their originality makes them desirable for all walks of life.
Another reason you’ve probably noticed an increase in local breweries and wineries is the challenge that comes with starting and maintaining them. Compared to other small town business ideas, breweries and wineries require significantly more research, marketing, and equipment. Developing new products can be fun, but the resources required for storing and producing them in mass quantities might not be so easy to come by. And let’s not forget the need for ample space and a lively ambiance. The most successful breweries and wineries tend to have large outdoor areas complete with games like corn hole or Jenga.
Talk about a growing industry! More and more people realize that massage therapy is not a luxury but a necessity for balancing a successful career and active personal life these days. It is now completely understandable to get a massage every week, especially if you wish to stay equally productive throughout the year. Today’s young adults associate happiness with getting things done, and there’s no limit to how much you can accomplish when you are mentally and physically relaxed.
Locals would likely get massages a lot more often if this vital service was just a short drive or quick phone call away. Thus, you must figure out whether it makes more sense to create a physical storefront or to visit your customers’ homes. Either way, you should be prepared to work long hours early on. New massage studios usually attract customers through special offers, like an extra ten minutes on top of their scheduled session. And since your customers probably enjoy other forms of wellness therapy (cupping therapy, crystal therapy, etc.), you might consider obtaining the required certifications for offering additional services.
Best Small Business Ideas: What is a Niche Market?
Now that you have an idea of the industry you’d like to work in, the next step is to narrow down your target market. The ideal target market fulfills three qualities: large, considerably specific, and yet to be effectively targeted. If your target market meets these qualities, you may have found a niche market. Many experienced entrepreneurs would likely argue that a niche market is a mandatory requirement for success.
Businesses with niche markets target subsets of larger markets. In most cases, the subset differs from the broader market through at least two of five market segments. Those segments are: geographic, demographic, firmographic, behavioral, and psychographic.
Geographic segmentation creates a market based on the audience’s geographical boundaries. It assumes that people who live in a certain location have certain purchase preferences. Demographic segmentation creates a market from general demographic information, like the audience’s age, gender, average income, ethnicity, marital status, etc.
The “firm” in firmographic segmentation stems from the decision to serve a specific type of firm or business. Thus, B2B businesses often consider firmographics when choosing the size or annual revenue of the businesses they wish to help. But firmographic segmentation can also mean catering to members of a specific industry.
Psychographic segmentation creates a market by catering to an audience with a certain need, value, or interest. Behavioral segmentation creates a market by catering to proven behavioral tendencies of the audience. This could refer to the way your audience uses something (dressing up a dog, decorating their smartphones) or how frequently they prefer to use certain products.
Best Small Business Ideas: Combining Market Segmentations
All five segmentations present ways to narrow down your target audience from a much larger group. That larger group could be something very broad like dog owners, or something slightly smaller, like professional musicians. Let’s say your business caters to New York City-based professional musicians who are looking for digital marketing services. In this case, your business would create a niche market by combining firmographic (professional musicians), psychographic (in need of digital marketing services), and geographic (based in New York City).
This example also proves that niche markets don’t have to revolve around completely new products or services. They can be fairly broad, like swimwear or party planning. Your business is just creating a version of these products or services that caters to a more specific and mostly untapped audience. Their specific features, price, quality, etc. will differ from the competition.
New businesses are usually encouraged to take a broad audience and narrow it down as much as possible without seriously compromising the size. If you don’t think your business idea is specific enough, apply another segmentation. For example, a new law firm that specializes in worker’s compensation could apply geographic segmentation to focus on a specific area or firmographic segmentation to focus on a specific occupation that is known for worker’s compensation-related issues. As the firm builds success, it will acquire more resources that are necessary for taking on higher levels of competition. At that point, the firm can broaden its audience.
What are the Benefits of a Niche Market?
The benefits of having a niche market are simply too advantageous to dismiss, especially from a marketing and financial perspective. Here are just a few benefits of catering to a smaller group of people in general:
The process of finding a niche market can indeed be viewed as a wise investment. You spend a modest amount of time and money conducting research and experimenting with potential strategies. The payoff is the massive amount of both resources you’ll save once you’ve found your market. Compared to a broader audience, it costs significantly less time and money to develop products and services for niche markets. The same concept applies to marketing for niche markets and delivering quality customer service. But remember, you won’t get any of these rewards unless you invest the proper amount of time and money in ascertaining that your niche market exists and is headed for growth.
Earlier, we mentioned that a critical element of a niche market is that it has gone ignored by the rest of your industry thus far. You have little (if any) competition when it comes to the specific need you’re trying to address. No one else is trying to market similar products or services, or deliver them at a faster rate. With a broader audience, on the other hand, you’d face the daunting task of competing with larger businesses that can offer lower prices, better convenience, and reach many more potential customers with their high-budget marketing tactics.
If your niche market, however, turns out to be just as big as you anticipated, the competition will naturally emerge. If there’s no competition, your market might be smaller or less lucrative than you expected. We’ll explain how to avoid this scenario later on.
Better Customer Service
New businesses gain traction by establishing and maintaining a loyal customer base. Their first batch of customers are essentially treated like gold, which increases the likelihood of the almighty referral. Since niche markets are smaller groups of people, you can devote more attention to your initial customer base. Your customer experience and engagement methods can also be tailored to your audience’s unique preferences, which is another critical element of niche markets.
The importance of digital marketing has made niche markets even more desirable. Search engine optimization, for example, refers to your business’s accessibility through a Google search. If you cater to a more specific audience, that audience is going to use specific keywords when searching for your products or services. You won’t have to worry about too many other businesses competing for those same keywords. This is the primary goal of virtually every search engine marketing strategy: to ensure that your business shows up for the right searches, as opposed to as many searches as possible. You can double down on your most relevant keywords by publishing blog content that caters to your audience.
Everyone Reacts the Same Way to Marketing Strategies
Individual members of a niche market are typically very similar to each other. Thus, it’s unlikely that your marketing strategies will only resonate with a portion of your customer base. Instead, the overwhelming majority of your base will likely react the same way to your strategies, whether they like them or not. In the case of the latter outcome, at least you’ll know it immediately. You won’t have to continue testing the campaign to confirm your initial findings or conduct research to find out why certain members of your audience did not respond well.
This is yet another reason why niche marketing is so much cheaper than a broader audience.
More Opportunities for Referrals
Think about your friends’ purchase preferences or hobbies. Reasonably similar to your own, right? Members of niche markets tend to know other people with related needs. And up until now, no other company has fulfilled this need. In other words, your business’s arrival will become a hot topic of discussion within your audience. Every business strives for this goal. With the right niche market, you can achieve it solely by continuing to serve your customers.
You Can Find Your Expertise Early On
Successful entrepreneurs often preach about the importance of becoming an expert at one thing, instead of becoming pretty good at a few things. A niche market puts you on this path from day one. Let’s say you’re looking for a new BMW. Would you rather go to a BMW dealership or one of those huge dealerships that sells all sorts of cars?
Remember: If several other businesses could already call themselves experts at what you do, this wouldn’t be a niche market in the first place. By definition, serving a niche market gives you the exclusive ability to market yourself as the sole expert.
Early Sales are Nearly Guaranteed
Niche markets are not confirmed through brainstorming sessions. They require extensive research to prove that not only is there a need for your product or service, but that people will actually pay for it as well. This research nearly guarantees that you will make sales shortly after opening up shop. It’s up to you to build momentum from these sales and learn from your initial customers. This will allow you to improve your marketing and customer experience efforts moving forward.
How Do You Find a Niche Market?
As you can see, the benefits of a niche market are both great in number and extremely valuable. This suggests that the process of actually finding a niche market is long and complicated. But like business growth in general, the amount of time it takes to find a niche market varies from business to business. Some entrepreneurs have to devote considerable time and money into solidifying their niche market. Others may be more sure of their ideas from the get-go.
Either way, the process of finding a niche market is basically identical to the process of coming up with a great business idea. Here’s where to start:
What Are You Passionate About?
Entrepreneurs do not necessarily have to be passionate about their business ideas to achieve success. Plenty of successful businesses were launched solely because the entrepreneur identified a massive opportunity that had yet to be capitalized on. With niche markets, however, being passionate about your idea is especially advantageous.
Businesses that cater to niche markets usually provide particular products or services to a particular type of person. As a result, they spend a great deal of time, enveloping themselves within a particular culture. If you cannot relate to this culture, you’ll feel uncomfortably out of place and will not be able to perform to the best of your ability.
Another reason passion is so crucial for niche markets is the adversity you’ll face early on. Regardless of their target audience, virtually all new businesses struggle to gain traction. The early stages of a business that caters to a niche market may be particularly turbulent. Their audience is on the smaller side, and the business is essentially trying to do something that hasn’t been done before. Despite their highly targeted goals, it may take a few tries to hit that target. When adversity strikes, your personal connection to your audience, and your desire to serve them will carry you forward.
Lastly, today’s young adults can tell when a business is being genuine or wearing a disguise. If you pretend to be someone you’re not, your audience will likely sense it. Niche markets revolve around connecting with a specific audience and making it clear that you’re not just in it for the money. This is much easier to do if serving your audience is a personal goal.
Gauge Competition for Search Terms
Next, you must determine if your niche market is large enough to warrant the launch of your business. You can start your research by searching the Internet and social media for keywords related to your products or services. Tools like Google AdWords and Google Trends can help you figure out exactly how much traffic is currently surrounding these keywords.
In addition to search volume, Google AdWords can reveal how competitive your keywords are. This represents the value of these keywords are to other businesses. If your most relevant keywords are highly valued, it’s because they are highly relevant to other businesses that bid on them in Google AdWords. Niche markets cannot be too large. If there is more competition than you expected, your market might not be “niche” at all.
On the other hand, you don’t want your keywords to have too little search volume. This suggests that there isn’t enough demand to support your business. A keyword is usually considered “low volume” when it has under 500 searchers per month.
Ideally, your most relevant keywords should have at least 1,000 searches per month, but not much more than 2,000. Keywords with this search volume have substantial traffic but are not competitive enough that you can’t afford to bid on them. If you’re still unsure about the demand for your product or service, you can test it without spending too much money on keywords.
To solidify demand even further, don’t hesitate to contact people who fit your target audience directly. Sometimes, asking questions can reveal important information you would have never obtained through statistical research.
Determine If You Can Draw a Profit
At this point, you should have confirmed that your target audience is indeed large enough to support your business. The fact that your audience exists, however, doesn’t automatically mean that you can draw a profit from your product or service. You can begin this phase of your research by examining how similar products have performed on popular retail sites like Amazon. Then, check affiliate marketplace product lists like ClickBank to see the market value of these products.
If you’re still unsure about how to price your offerings, you might consider testing your ideas through low-cost digital marketing campaigns. For just a few hundred dollars, you could launch a targeted social media campaign that advertises different prices in each post. You might assume that the lowest price would garner the most engagement. But low prices could also mean lower value. You shouldn’t have to set your prices too low in the first place because of the lack of competition.
Test Your Marketing Materials
Now that you’ve figured out how to price your product or service, you can focus on how to tailor your marketing in general. Since you’re targeting a niche market, this phase shouldn’t take too long. Odds are, the majority of your audience shares the same preferences. For this reason, you probably won’t have to test out too many versions of your advertisements.
New businesses often begin marketing themselves on social media, especially those with niche markets. You have the option to target particular audiences and test out different ad iterations, a.k.a. the frequencies in which your ads appear. This is another difficult balance that niche marketers have to strike. Your ads must appear frequently enough for the user to remember your business, but not to the point where the user chooses to stop seeing your ads altogether. It’s easy to fall into the latter scenario. The average user has to see an ad multiple times before making a purchase. But since your audience thinks alike, the ad iteration that proves successful for your first batch of customers will likely achieve the same results for all other customers that follow.
Business Ideas: The Ultimate Goal
Niche marketers often strive to reach a status of popularity known as brand saturation. This refers to the point in which your entire audience (everyone who needs your product or service) knows about your business. Unless you’re one of the biggest businesses in the world, brand saturation is only a distinct possibility with a niche market.
We’ve repeatedly emphasized that the size of your audience should make it much easier to figure out what every member of that audience has in common. With niche marketing, your success is directly linked to the number of similarities you find.