10 Jan 10 How to Find and Qualify a Niche to Serve

What is niche?

A niche is a subset of a subset of a market made up of individuals who share the same need and have the same desire concerning the category in question.

In simple words, a niche is a collection of individuals that shares the same need. It is different from segment in the concentration of focus of individuals in a niche. For example, heath could be a segment consisting of niches like weight-loss, cure for heart disease, yoga, etc.

How to find a niche?

Finding a niche is easy, but finding a niche that is profitable is slightly difficult. Just look around and see what people are talking about, what they are buying, selling, aspiring for, or what they are doing, and you have a niche to start with.

Ask the following (and related) questions to gauge the need:

1. What people are going crazy about?
2. How long will they continue thinking the way they are doing right now?
3. How sensitive they are to price?
4. What social change has brought about the particular change in attitude?
5. Can it be served?
6. Will it last long enough to be a business?

How to qualify a niche?

For a niche to qualify as a business, it should have the following traits:

1. Serviceable: A niche should have a serviceable need, which means it should not have needs that cannot be served using the current level of technology.
2. Actionable: A niche should be sufficiently big to provide adequate return on investment (ROI) on the capital investment in 6-9 months. A niche that consists of total 100 people cannot be actionable.
3. Profitable: A niche should have scope to sell product for money. A niche consisting of free services cannot be profitable.
4. Durability: Building a long-term business around any 4 or 5 days sports event cannot be qualified as a niche, as the business will be close as soon as the event ends. For a niche to be profitable over the long haul, it should not get affected too much by seasonality, fad, or taste swing.

Most importantly, find a niche that has any relation with your view about the world or has any relation to things that you like. This will make the niche more attractive.

Tags: 9 Months, Adequate Return, Attitude, Capital Investment, Concentration, Days Sports, Durability, Fad, Heart Disease, Heath, Long Haul, Niche, Niches, Return On Investment, Scope, Seasonality, Segment, Sports Event, Subset, Term Business