Choosing The Niche For Your Business And Psychology Behind It
139: Niche, Business, and Psychology.
Welcome reader! As the economy is getting rough and most portfolios are down. We all know what is the best way to not stress about it and what your ultimate goal should be—more income. If you can make money when everyone else around you struggles. That means you can make even more when everyone else has it easy. No surprises there. Today’s article? How do you choose your niche, what to focus on, and the underlying psychology.
What has been happening over the last few days…
What You Need to Know About Choosing The Niche
What to remember: There is a good chance someone will be reading this post 5 to 10 years from now. Our first suggestion, and a mandatory step you should take before reading the rest of this post, if you have already chosen your niche. Go out there and test the market. Not just the market, but also the demand behind it. That is all it takes, and it will 15x your experience. What is hot and popular in the market might not be in the future. We tried our best to futureproof it. But there is so much we can guarantee regarding niches and trends. The research part is the crucial element that dictates your success on a larger scale. We chose the best business model (source) post as reference to repeat one of our earlier takes. There is no best model. Only the model that works best for you. Similar principles apply to niches as well. Don't approach it from the perspective of what is best and will make me the most short-term money. Look for what works in the market and where trends are heading. Predicting trends is part of the game that only a few can pull off.
Understanding the industry: This should not be part of the post about niches. But we felt obliged to mention it. The ideal scenario is that you either 1) understand the industry in which you plan to start your business, or 2) choose an industry you are passionate about and don’t mind spending time learning it. Those two often get overlooked but do play a major role. They are not the requirements. But they are a big plus. Once you get comfortable enough and your knowledge of the industry gets to a point where you can transfer the same to other industries… It means you are doing something right.
Thanks to membership geeks for the graph (source).
The Importance of niching down: We felt obliged to mention that niching down (specializing) is mandatory. Why? The reason is that everyone has the same opportunity as you. What does this mean? You can only gain an edge by becoming an expert in a specific niche or product. Let's say you have two people selling camping gear. Both provide quality content. Both are trying their best to be seen and heard. Which one will gain the advantage over the other? One that finds the right opportunity and positions themselves as an expert in a particular segment of camping gear. Something that will help others solve problems or provide them with a view they were unaware of. The goal should be to become that X segment profile everyone knows about. This was not preached knowledge years ago since it was unnecessary. Saturation argument was not in the play. Now things are different and using the general approach is still mandatory, but it requires a more strategic approach. Being classified as an expert—those are the ones who win in the end. Just another reminder that the attention economy is real (source). This strategy applies to those trying to build their brand. The strategy for those cashing quick cash or trying to get an idea on their next affiliate campaign should be different, but have the same core principles. You have to get others to believe you one way or another.
What does the niche look like: There has been a decent amount of confusion on the internet regarding the difference between the industry and niche. That is at least what we have observed over the past few years. One way to put it is that the industry is a macro overview, while the niche is a micro one. Financial services is an industry, whereas banking is a niche within it. This is where those lacking experience will stop and say: "Let’s start our business around this banking niche". It is not 2002 anymore. Thousands of others are starting their businesses and directly entering the competition with you. What will separate generalists from those reading this post is the next question you should ask: What is a sub-niche of the banking sector? What will allow me to cover something others are not covering? But it is still impactful and could help others. The sub-niches of the banking sector include consumer banking, corporate banking, investment banking, and private banking. This should clarify things for anyone reading this post and seeking an overview of what niches mean. Always go a layer deeper. Still not sure how to approach choosing a niche? Let’s take for example the beauty industry. Beauty further breaks down into haircare, skincare, makeup, and body care… Which further goes deeper into curly hair, oily skin, vegan makeup, and stretch mark treatment. Everyone reading this should get the point of what their focus should be.
Don’t focus on broad subjects like 'fitness.' Focus your blog on a specific aspect of the broader subject or give it a unique spin. - Squarespace Blog
Narrowing Your Focus - Selecting Your Niche
Keep in mind: Rarely will you hit it big on your first try. Consider our take and try to approach this as realistically as possible. The niche you select doesn’t have to be one you are in love with or passionate about—those extras will give you an overview and knowledge that others competing against you don’t have. This is one of those cases where you should choose money and earning opportunity over passion.
