If you're reading this post, then you've probably heard a million times that your niche is everything, and/or that "the riches are in the niches." Well the tales are true, and in this post, you'll learn more about why niche-selection is so important as well as HOW to brainstorm, narrow down and choose your own.

           Not too long ago, it actually paid to be a generalist. If you owned a shop or business in a small town, or even in a big one, you simply didn't have the volume of foot-traffic to merit only selling one thing.

            However, today, you don't have to look far to see that a brain surgeon makes much more than a general practitioner. The same applies to specialist mechanics, consultants, fitness trainers, and just about everything else. In every field, the specialists make more money and are in higher demand.

            The point is that there are countless reasons and benefits to specializing your business and/or area of expertise, so let's discuss some ways you can narrow down and choose yours. Keep in mind that some people take years to finally choose their niche, but remember that the main obstacle is simply fear.

            I’ve spoken with tons of entrepreneurs and marketers about the importance of niche-selection books, and/or after listening to a [conference] speaker discuss the importance of niching down.

            Their heads nod in agreement throughout the conversation and speeches, but then afterwards, they always seem to rationalize why THEY are in a unique position, or field, or market where niching down wouldn’t make sense. In other words, "I'd love to niche down, but MY business is different!" 

            I'm somewhat sorry to report that, in fact...NO IT ISN'T. Even today, with all the books, articles, and content around niching down and its importance, the wide majority of businesses, entrepreneurs, and marketers are still vehemently resistant to it. This makes it clear it’s a mindset thing.

           The number #1 reason businesses are resistant to niche down is that they fear and/or simply don’t like the idea of excluding market segments that they can serve, or help, or sell to. Even though 90% of the things they themselves buy are niche-positioned products, they can’t just bring themselves to do it.

DON'T keep these enemies close

            The top two reasons/excuses that get in the way of business owners niching down are:

1) "But I don't want to turn down any customers!"
2) "But I have too many niches to choose from!"

            One of the biggest obstacles to global business growth is the fact that many (new) entrepreneurs can't make psychological peace with the idea of turning away customers who could or would buy.

            I can write a book about this (and I might) but I'll sum it up with the fact that a mechanic that specializes in (as in ONLY works with) Japanese sports cars will make more money and be in higher demand than a general mechanic, even though the general mechanic could do just as good of a job.

            The same could be said of dog groomers, hairdressers, life coaches, and everything else. If you have an Apple computer, or curly hair, or a Harley-Davidson motorcycle, then you'd probably prefer and pay more for services from providers who specialize in that thing, even if a generalist could do the same job.

            We'll address the "too many niches/interests to choose from" throughout the rest of this post.

             One last psychological note here...Every business on earth aims to sell a specific product to a specific type of person (or should). However, if you target "everyone", then you're basically using the "mist" setting on your hose nozzle, when you'd be much better served by setting it to a concentrated jet. 

            Yes, the mist setting may reach a wider area, but your goal is to get things wet (make money), and NOT to reach the widest possible area. Plus, the mist may get blown away by wind, and relies on luck. 

            This also means that the more generalized you are, the more strength, skills, luck, and resources you'll need to have in other areas. Yes, you have a bigger fish-catching net, but with bigger holes in it.

            Choosing a niche is not something you HAVE to do; it's something you GET to do, which provides massive benefits that entrepreneurs of the past (and present) would kill for.

            Given we all still possess ape/lizard brains, if everyone did "what they loved", then tons of people would eat junk food, have sex, watch TV, and post selfies all day. As you already know, many people DO, in fact, follow their passions and do these things all day, but 99.9% of them don't get paid to do it.

            I’m not saying that you should disregard your passions. After all, making it in any business is tough, and there are definitely benefits, reasons, and advantages to choosing something that can sustain your motivation when the going gets tough, which it inevitably will. 

            What I AM saying is that while your passions do play a role, there are several other important factors to consider when choosing your niche. Here are some risks of "following your passion“:

            1) There may be no market for it. Just because you are passionate about underwater basket-weaving, or space travel (like me), doesn’t mean it’s a good market to go into. You will have to balance your passions with practicality, with market demand, and with who you can actually help most, or at least enough. The absolute most important factor is delivering value people will pay for. 

            2) Passions overlap across all people. Oh, you’re passionate about traveling, food, or your kids? You and 90% of the world. You could argue that that’s exactly why those are great niches to go into, but it also means that you'd better be ready to face stiff competition, UNLESS you pick a narrow sub-niche.

            3) Passions change. Often. I’d personally guess many-to-most passions change around every 3-5 years, but this is my very unscientific observation, and can vary. In any case, be careful with what you are passionate about today because there’s a decent chance you won't be passionate about it next year.

In perfect competition, everyone loses -Peter Thiel

             While the experts disagree on many things, competition seems to be one of their biggest disagreements, with half saying you should innovate, and the other half saying you should model what is working. For this particular stage of your research, it is good to see at least some indirect competition.

            If you want enter the model train niche, it's good news if there are best-selling books on the topic, with lots of reviews. Even though there are established players in that niche, it shows that there is a large enough and passionate market, who is willing to buy, and means you can carve out a sub-niche.

            However, if you want to enter the elephant-training niche, but you find zero books and zero courses even related to it, then that would indicate that there is not much of a market demand for that topic. Remember that it’s not (only) about what you’re most passionate about, it’s about what people is willing to trade their money for.

             We will focus on niches for information products, and expert businesses as whole, such as authors, consultants, course creators, and the like.

            Niche research and selection are different for every type of business, so even while a few general factors apply across the board, the fact is that the quality and success of a niche heavily depends on the type of business you are taking that niche to.

            This means that the niche research and selection processes will be (slightly) different for expert businesses, agencies, physical products, affiliate marketing, professional careers, and more.

            I would say that there is around a 75% overlap of niche-selection strategies between all business types, but we will focus on niche selection for personal brands and expertise-based businesses.

             When it comes to finding your niche, there are three primary strategies. 

            1) Is to create your own niche and own it. This may involve inventing a new product, or staking your claim into a virgin sub-niche, but the point is to find or create an unmarked niche and be first or early to claim it as your own. Learn more about this idea in books such as Blue Ocean Strategy and Zero to One. 

            2) The second strategy is to identify/predict an UPCOMING niche and get in early on it. This strategy is less about CREATING a niche, and more so about being the first or early to catch one of the endless upcoming trends/waves as it arrives. 

            3) The third strategy is unfortunately the most common which is to copy someone else's success. Canteens are in? I'll do that. Wooden toothbrushes now? I'm in. Standing desks? Sure, that'll work.

            To be fair, if a market is big enough, or growing, then it can support multiple high-profit players, but your path will be up-hill and limited, and I’m a fan of least-resistant paths.
 
           Again, there are even more strategies for physical products, agencies, and other business models.

             Smart marketers learned long ago that just about every business falls into one of three categories which are: health, wealth, and relationships. However, I'd also add hobbies/entertainment as a fourth.

            The point is that you should identify early on which of these categories you fall into, or that calls your attention most, because each one is a whole different world. Million/billion-dollar business succeed every year in each of these categories, so there is no better or worse option, but only preference.

            Remember that this mainly has to do with marketing, so while pencils, razors, and/or Chapstick may not seem to fit into any of these categories, how you position and sell them is what's up to you.

Get all your ideas down on paper

             When it comes to strategies to choose your niche, there is no shortage of inspiration sources, if you know where to look. Now we are going to review some sources for inspiration of topics you may want to become and expert in, create products for, and grow your business around.

            Even if you had a life-transforming experience when you walked through a shoe museum, and now you know you want to become a shoe expert, everyone should take the time to physically sit down and write out a brainstorm of similar and unrelated topics that they may want to pursue for their business. 

            You may end up sticking with the shoe topic after all, and that’s fine, but it’s very important to at least know and consider your options.

             Your 1st question should be “how/where can I add value”, and then “what are my passions?”, and not the other way around. In any case, how can you help people?

             The first step in assessing who you can help is by going back to using one of my favorite tools, which is the brainstorm. This will be somewhat of an organized brainstorm, but here are a few questions to PHYSICALLY WRITE DOWN your answers to get your creativity and ideas flowing. Aim for AT LEAST 10 ten answers for each question and write them down.

1) What are you interested in? I know I just went on what seemed like a big rant against passions, but it was actually more of a warning against blind, optimistic pursuit. Plus, this is just a starting point, of many points to come. In any case, make an exhaustive list of the things that interest you now, and in your past.

You can review:

            -your bank or credit card statements from the last 2+ years,
            -your amazon purchase history from the last 2+ years,
            -your YouTube and Netflix watch histories and “watch later” folders,
            -your bookshelf (+topics),
            -your browser history, google searches, and bookmarks,
            -everything in your room/office,

            2) What can you do that other people can’t? Everything above tying your shoes and downing a pint of ice cream in one sitting is fair game here. This could include building websites, fixing broken pipes, running a marathon, resolving conflicts, finding cheap flights, playing tennis, driving an 18-wheeler, or literally anything that your mom, neighbor, or cousin probably can’t do.

            3) What have you done, that (most) others haven’t? This is a similar question, but it is different. This could include passing an exam, giving birth to octuplets, running a restaurant, building a computer or car, making ice sculptures, and any other skills that would lead people to potentially admire you. Remember that the harder it was for you to do it, the more you can help those who come after you.

There can be no business without a grasp on your audience and/or customers

             A lot of marketers will probably come out with pitchforks right about now, arguing that your target customer should be the absolute first thing you consider when starting a business.

            Keep in mind, all of these steps are part of the same brainstorm, whose goal is simply to throw absolutely everything on the wall, and then connect dots afterwards. That being said, your target customer and market are crucial factors to consider when choosing your niche for obvious reasons.

            Here are some questions to ask yourself about who is going to fund your upcoming success.

            Who is my ideal customer? If you could wave a wand and choose any type of person to be your customer, who would they be? What does their average day look like, what are their fears and goals, and what are they already spending money on? One thing is for sure, however, and that is that your ideal customer is NOT everyone, regardless of how universally useful your offering is.

            Where does my audience go to solve their problems (buy stuff)? This question seeks your market (place), rather than any single customer type. While it's great to focus on a single customer, your actual customers are likely to include different buyers with different goals.

             Another great source for niche ideas is your own set of daily problems. Ask yourself what your biggest current challenges are. Then, think back to what they were this month and this year. No matter how obscure you think those problems were, there are large audiences begging for help to solve them.

            Everyday life is a goldmine of ideas/problems, so consider "scratching your own itch" as one direction you could go to niche down.

             An undeniable factor to consider when choosing your specialization is profitability. This doesn't mean that reaching absolute maximum profit is the goal, but that there is at least ENOUGH to be had.

            If you're torn between going into business in cyber-security and basket-weaving, it shouldn't take you that long to decide. Plus, once you make it in cyber-security, then you can weave as many baskets as you want.

            So yes, profit isn't everything, but it is a big something, so keep in mind when choosing your niche.

People are much more likely to take action when there's strong emotion involved

             Pain and passion might seem like opposites, but they are two sides of the same coin, in that people feel very strongly about moving toward or away from them. That's the type of niche you want.

            When we look to "the big 4" market of wealth, health, relationships, and entertainment, there is no shortage of sub-niches of people who desperately want more or less of something.

            Some people tend to interpret helping those in pain as "taking advantage" of them, but this isn't the case at all. Dentists, locksmiths, and laptop repairmen all solve legitimate high pain-points.

            And as for the passion side of the coin, your goal is to find an irrationally passionate audience such as pet owners, sports fans, car collectors, golf enthusiasts, and many more. These people simply can't ever get enough content or stuff related to their passion. So give it to them.

             One more obstacle that stops people from specializing is the fear that they will be stuck forever in a niche that is too small or that they (grow to) dislike.

            While that's an understandable fear, the truth is that your entrepreneurial path actually become much easier if you start specialized, and then expand. 

            For example, UGG boots started out as specifically for surfers, and then expanded to basic bitches everywhere. RX bars started as specifically for cross-fitters, but now they are sold everywhere.

            The point is that it's actually MUCH easier to lay claim to a small sub-market, and then expand, than it is to go straight to the mass market, which is what most new businesses try (and often fail) to do.

            Your first idea/niche doesn't have to be a moonshot. In fact, you should make peace with the fact that you will probably shift or pivot from your original idea to one that suits you better, and that's ok.

You're aiming for a clear blue ocean, and not a bloody red one

             A great exercise to narrow down your niche is to fill in this statement:

"I help          1         s  to           2           by/with/through           3         ".

            The numbers are to be filled-in and they are ranked in order of importance. "1" is the "who" you help, and is hands-down the most important factor to identify. "2" is the "what" you help them to do or achieve, and "3" is "how" you help them reach that desired end result. 1 and 2 are all you need in a pinch.

            You value statement should be clear enough that a SPECIFIED audience can raise their hand and say "that's me." This exercise may seem easy and simple, but I've spent hours and even weeks working with businesses to finally nail down who it is they help to do what. So don't feel bad if it takes time.

            A BAD example is "I help people to lose weight with personal training." Remember your goal is to be SPECIFIC, and NOT to reach the widest audience. Here are some better examples:

            "We help [software companies with $1,000,000+ in annual revenue] to [upgrade their low-tier customers] with [webinars and Facebook advertising]."

            "I help [amateur runners] to [run their first marathon] with [high-altitude training]."

Make your competitors say the opposite