opinions expressed by entrepreneur Contributors are their own.
As a budding entrepreneur, it’s sometimes tempting to think that all good business ideas are already taken. When virtually every industry seems to be awash with companies (especially in the e-commerce age), finding a way to differentiate yourself from the competition can seem difficult.
In reality, however, there are still plenty of opportunities for entrepreneurs willing to dig a little deeper. By finding underserved niche needs in their industry of choice, entrepreneurs can develop new and highly successful brands of their own.
As it turns out, you don’t have to try to serve everyone to build a successful business.
1. Consider your own interests and unmet needs
While pursuing your passions is a cliched starting point for any entrepreneur, it’s especially important when trying to identify more niche needs. By focusing on your own interests, you can more easily identify areas where your own needs are not currently being met.
Brainstorming a list of your skills, hobbies, interests, and problems you would like to see solved in your own life can serve as an invaluable starting point for finding niche opportunities.
Sometimes entrepreneurs can even identify niche business opportunities by combining aspects from different interests. On a smaller scale, this is easy to see on sites like Etsy, where you can find products that combine a person’s talent for laser cut wood art with their interest in video games, for example.
Related: 6 steps to turn your passion into a career
2. Evaluate what others in your industry don’t offer
If you already have a specific industry in mind, it can be helpful to do some competitor research. Don’t just look at what others in your industry are offering – look at the websites of multiple companies to get a better idea of specific products or services that are not widely available.
This came up recently in a conversation with Ashley Sarnowski, co-founder of Sunnie Hunnies. She explained: “We found our niche focus on super soft swimwear for newborns and toddlers in part because it was an issue that had arisen in our own families. However, what really helped us launch our own product was doing the research and realizing that the type of products we were looking for don’t really exist in the current market. Our research gave us confidence that we could offer something unique in a crowded market.”
3. Interview the target group
You can go beyond your own experiences and get ideas for niche needs by surveying others in your potential audience. You could start with family, friends, or business associates, or you could go to Internet communities and join their conversations.
Pay attention to the problems people are having, the products or services they would like, or the questions they are asking. Think about how these pain points and desires relate to your niche and how you might use your skills and knowledge to offer a meaningful solution.
In addition to assessing the audience’s issues and needs, you should dig deeper to understand their buying behavior and motivations. By better understanding your target audience’s personality, you will not only be better able to develop a pinpoint niche product or service. You will also know how to market it effectively.
Related: 5 steps to creating effective customer surveys
4. Conduct keyword research
While your own personal experiences or anecdotes from friends and family can help you identify underserved needs, not all niche ideas are created equal. Before embarking on a niche business idea, you should conduct keyword research to validate its potential.
According to NerdWallet, “If a keyword has less than 500 searches per month, you face an uphill battle in terms of demand. “Ideally, you want to have between 1,000 and 2,000 searches per month. With such a number you can test your product without burning any cash.’”
On the other hand, if a keyword has a higher than expected volume of keyword searches, it may not be as niche or underserved as you initially expected. Tools like Google Trends can also help you see how interest in a keyword rises and falls over time, or if a particular product or service is subject to seasonal fluctuations in demand.
Just because other competitors already exist in your desired sub-niche doesn’t mean you can’t enter that space. Use your initial keyword research as a starting point to figure out what you can offer differently or better so you can make a big impact in these smaller markets.
niches to succeed
Ultimately, finding the right products or services for the right niche can allow your business to become far more cost-effective and successful than trying to target a broad audience.
While focusing on a smaller niche means the overall potential audience is smaller, brands that focus on a more specialized audience often become much more profitable. With less competition and the ability to engage in more targeted marketing, business owners can generate significant brand loyalty and word of mouth. By being one of the first to gain a foothold in your niche, you can also dominate SEO.
By striving to work with underserved niche markets, you create a real win-win scenario for you and your customers.