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Niche for business: how to choose?

Choosing a niche for a business is like building the foundation of your home. If it is flimsy, then the whole structure will come out the same, no matter how ideally the materials are selected and further work is done.

Next, let’s talk exactly about why it is so important to choose the right niche for business, how to do it, even if nothing is clear about this yet.

Why is this so important?

The thesis has already been said above, and now in more detail. The point is, getting the right niche is a potential determinant of how successful your business will be. Otherwise, if you do everything at random, you can waste your money – you will sell a product that no one needs in a certain region.

For example: in a region where even in summer the temperature reaches only +15, there are no rivers and lakes, you decided to open a store selling swimwear and swimming equipment. There will be no payback here, at least in the next few decades.

How to choose a niche: deciding on a strategy

Those who have already worked in a certain direction, but as a hired specialist, can take the path of least resistance: start their own business in the same niche as their former employer. There are, of course, several advantages here:

  • already have an idea of ​​the market;
  • experience in this area;
  • perhaps some kind of contacts, and this will help to get the work done faster.

If you are not one of those who are looking for easy ways or just want to do something special, then the strategy will take shape a little differently – you will need to analyze the market, your target audience, demand, competitors.

The target audience

You have decided to sell a product or provide a service. To do this as efficiently as possible, get to know your future customers, that is, conduct an analysis of the target audience.

The analysis should take into account the following indicators:

  • physical data – gender, age;
  • Lifestyle;
  • approximate income level;
  • the presence of children, pets;
  • alleged hobbies;
  • what influences purchasing decisions;
  • what consumer preferences.

And most importantly: why should they buy from you, what will be your competitive advantage?

The more detailed you analyze your target audience, the clearer the picture will be, you will be able to work out a strategy more accurately, and therefore build a successful business.

Little life hack: social networks will give more information about your target audience. Just analyze a few profiles of your potential customers.


It is very important that your product is in demand in the region in which you intend to conduct your business.

Statistics on requests can be viewed in the Yandex Wordstat service. There, at the request of users, you can see how many times a month people have searched for this or that product or service. Also, the whole thing can be segmented by geography, age – aloud, and you have a complete picture.

Competitor analysis

As strange as it may sound, it is the analysis of competitors that will help to avoid serious mistakes.

Let’s say you have come up with a new service, and none of the existing businessmen in the district provides it yet. It seems to be good – you can open a new niche and immediately occupy it, become a pioneer. But, after analyzing competitors in related areas (they definitely exist), it may turn out that the idea is not the same and brilliant.

How you will conduct the analysis is solely your business, but by the end you must have answers to the following questions:

  • what is the level of competition in the niche – high, medium, low, there is none at all;
  • the number of competitors in the region, in the business area. For example, it makes no sense to put up the fifth tent with shawarma near the same university;
  • what is their range of goods / services;
  • reviews about your competitors – from them you can understand what consumers lack, what exactly competitors are failing on and wrap it up in their favor;
  • price level;
  • what promotion channels are used;
  • what are their strengths and weaknesses;
  • financial indicators.

The more information is collected about competitors, the better for analyzing a business niche.

Trade cycle and margin

Margin is the difference between the cost of a product and the price at which you sell it. In other words, this is what you can earn.

For example: you bought notebooks for 50 rubles apiece. You put them on sale at 85 rubles per piece. Therefore, by selling 100 notebooks, you will earn 3.5 thousand rubles.

It is believed that the higher the marginality of the product, the better this niche is for business. But, not everything is so sweet, because you need to take into account the cycle of the transaction.

The cycle of the transaction is the time from the customer’s acquaintance with the product to its purchase.

Using the example of the same notebooks: this is not an essential product and it is not bought every day, like bread and milk. Therefore, you, of course, will earn your 3.5 thousand, but if it will be in half a year, then the effectiveness of such a business is so good.

Let’s conclude: a good niche for a business is one with high product margins and a short transaction cycle.


Remember the cold region swimwear we talked about at the beginning? This is partly about the seasonality of the business. Your product must meet the needs of the client at a certain time of the year or event period. Let us explain with an example:

  • felled Christmas trees and calling Santa Claus at home are profitable, the margin is high and the transaction cycle is short, but only of an event nature (under and during the New Year holidays);
  • sale of wedding bouquets to order – this is necessary at any time of the year and without reference to specific dates. Although, if you talk to a florist who works in this business niche, he will definitely say that at some time of the year there is a slight decline in demand for the service;
  • the sale of warm clothes is relevant only in the autumn-winter time, but in the summer and spring they arrange sales of old collections;
  • a refrigerator repair business is needed at any time of the year, and even more so it will be relevant in the summer.

You can get information for several years in the same Yandex Wordstat – according to the schedule of requests, you can track which seasons of the year for services or goods are in greatest demand, and when almost no one needs it.

How to test a niche?

You can do this using the example of a real business launch, but with minimal investment:

  • making a landing page;
  • you run ads on it, but with minimal costs, you do not need to develop a full-scale advertising campaign;
  • we analyze customer responses and interest.

If you don’t want to do all this, or there’s no possibility, then we use online services to test the niche:

  • Beta List – suitable if your business niche is a technology project;
  • Javelin Experiment Boads is a one-stop service;
  • Proved – tests a niche based on a created prototype.

TOP mistakes when choosing a niche

Oddly enough, but not only newcomers, who have never run any business before, but also people with experience, sin with them. Most often these are:

  • Lack of analysis of the needs of the target audience. The owner came up with an idea, in his head she already brings him bags of money, but he did not consider it necessary to ask his prospective clients: “Do you need it?”
  • No real miscalculations. In practice, everything turns out to be not as smooth as it was thought out, therefore, everything does not go according to such an ideal plan.
  • Lack of strategy – many people think that you just need to start, and how it will be further, time will tell. And time shows that the business ends properly and not even started.

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