How to Determine the Right Target Niche?
Today we are going to talk about finding the right niche for your next website project. We have talked about this a number of times on our show on determining what the right niche is; should I look at this niche because the potential for making money is there, or I am interested in this, should I go in this route. You got to answer all of those things, especially if it is going to be something that you are going to spend a lot of time doing. So, in order to really determine, I use something called a Venn diagram. I actually first came across this whole model using a Venn diagram; a long time ago it came across in a book called ‘Finding Your Perfect Work.’ It was a very good book. But, it uses a model basically creating all of these concepts or all of these ideas, and seeing how all of them relate together. Let me just show you how this works.
So, the first thing that I do is that I start with a circle for the first part of this project. Then, the first thing that I look at is you are looking at interest. If you are looking at a project to get started on, a website project or an online business project, it needs to capture my interest. It needs to be something that I am certainly interested in. So you have to have interest, something that you are passionate about that you enjoy doing. The ‘interest’ or the ‘passion’ certainly has to be there. Otherwise, it is not something that you are going to stick to. So, that’s going to be # 1; that’s the first and foremost.
Now, the next circle I am going to create right here (sorry that’s not a very even circle), but I want these two circles to kind of come together and there is a reason for that which I am going to show you here in a second. So, #2; what is the second thing that I am looking for when I am creating a project or a niche website that I want to go into. Well, I want to look at not only my interest and my passion, but I also want to make sure that this is something that I have a little bit of skill or expertise in. That is going to help me because if I know a little bit about what I am doing, if I know a little bit about what my project is, that is going to help me as far as getting the project going or continuing on with it. If I have an interest or a passion, but I know very little about my topic, then that is going to be hard to go into unless I am relying on someone else who is an expert, or who does have experience or skill. So, on #2, we are looking at skill, expertise, or experience, whatever you want to call it; it is some knowledge of your topic is what you want to do. So, you have an interest or passion. You also have skill. It does not mean you have to have any sort of qualifications; it just means that you have read enough on this topic to make yourself somewhat knowledgeable about it. Generally, if you have an interest or a passion, it is probably something that you spend a lot of time developing some experience or some skill or understanding about. So usually if you have #1, you are typically going to have #2; those two are generally going to go hand-in-hand, because if you are passionate about your topic then you are going to have the experience you need just from reading.
Then we come to #3, and #3 is going to work just like this. We are going to make another circle, and it is going to connect these two right here. Inside of this circle, this is going be our final piece of the puzzle of this whole Venn diagram, and we are going to call this ‘opportunity’, or we could call this ‘market.’ If you are entrepreneur-minded, you would want there to be a market for your interest, for whatever this is that you have experience/interest in. The last thing we need to find out and to determine is there a market for this. What we mean by market or there being opportunity is that whether there is an opportunity to monetize that. Of course, that is going to be the first and foremost thing in someone’s mind; “can we monetize this particular topic?” “Can we monetize this particular niche that we enjoy talking about, that we have a lot of knowledge on?” “Can we sell ads on our site?” “Is there something we can build traffic to?” This is obviously going to be a determining factor; what are the traffic numbers, and what do those look like. “Can we monetize this by creating e-books?” We can really just do a diagram and just create so many branches for this in mind-mapping this whole project, and determining whether we can monetize this through e-books, through information products, through affiliate products; you name it. We want to determine if there is a market opportunity for that.
So the way this works is, in this Venn diagram, these all come together at a central point, and this is what I call kind of the sweet spot. This is the determining factor if all of these three things mesh (#1, #2 and #3). If all of these things come together, and we determine there is interest, there is a level of skill and understanding and experience, and there is certainly a market for it, these are all good signs and a very good indicator that this is a great niche to go into because you got the interest (you’re going to stick with it), you got the knowledge base (you don’t have to rely on someone else to provide your knowledge; you have a solid understanding; you’ve been reading; you understand it), and lastly, you know for fact that there is an ability to capitalize off that through monetization (selling information products, maybe e-books, videos, DVDs, affiliate products that are already out there on the market, Google ads, Amazon affiliate ads, and all sorts of things). If there is a way to capitalize that and turn this into something that really generates money, and there is traffic (we certainly have to look at the traffic numbers, and of course, we’ve gone over this with using the tool ‘Market Samurai’ which is always a good tool to use for determining traffic for your niche). Once we have determined that these all line up and these all look good, then this gives us the ‘green light’ to go forward, because once again right here all of these things mesh, this is our target market and this is a good indicator that we should move forward.
So, thanks again. This was just a simple illustration that I wanted to write out on our whiteboard this week. Thanks for watching and listening to our weekly show.