How to Find a Niche for Home-Based Businesses: 5 Simple Steps

It’s a dream of many – having a home-based business that puts money in the bank, food on the table, and allows for some luxuries – a new car, a vacation, etc. And a lot of people have gone after this by watching infomercials, going to presentations, finding cash-at-home opportunities on the Internet. The number of people who actually achieve success from these sources is tiny. The reasons for these failures is usually lack of passion and knowledge about the niche itself. When those two things are missing, there is just no motivation to move forward, and any investment of time and/or money is lost. If you really want a home-based business, then you will have a better chance of success by following these 5 steps.

Step 1: Determine if You Have What it takes

Determine if You Have What it takes

Successful entrepreneurs have certain characteristics in common, whether they are founding a small home-based business or undertaking a larger enterprise with big outside funding right from the start. In general, they have lots of energy, they take risks, and they go after whatever they need to achieve a goal. They are often creative problem-solvers and they persist. If you have a good number of these character traits, you probably have the personality for entrepreneurship. Go to Step 2.

Step 2: List Your Skills, Interests, and Passions

List Your Skills, Interests, and Passions

Successful at-home businesses are usually built around what people love and do best. It’s tough to stay excited about building a business when you lack knowledge or passion about the product or service you are offering. Here are a couple of examples of at-home businesses based upon interest, skill and passion.

Dong Nguyen, a young Vietnamese student was highly skilled in gaming and programming. He created an app called “Flappy Bird” and put it in the Apple App store. It was a huge sensation and netted him well over a million before he pulled it. He was concerned that people were getting too addicted to the game.

Jessica Ekstrom was a college student in North Carolina who had an internship at the Make-a-Wish Foundation. She became so passionate about helping children with cancer, she formed a business called Headbands of Hope. She crafted cute frilly headbands for little girls who had lost their hair, set up a website, and advertised that for every headband someone bought, she would donate one to a child with cancer. Instant success.

When you list your skills and passions, think about how they could solve a problem for others. Are you skilled in music? Can you develop a “course” for others who want to learn to play the keyboard at home? Are you a great writer? Can you ghostwrite for the millions of people who are writing-challenged? Do you have a special recipe for candy or can you craft personalize gift baskets?

Step 3: Conduct the Market Research

Conduct the Market Research

You need to determine if there is a market for the idea(s) you have come up with. You can do this in two ways. First, develop a list of keywords related to your niche and conduct a simple Google search. If there are lots of results, this can be good or bad news. So, you must go further. Check Google ads and see how many companies are paying for ads related to this niche. Sometimes, you will discover that there are very people actually paying for ads. This is a good sign.

Conduct some social media searches. How much conversation is going on related to your niche? What questions are people asking and what help are they looking for? This may help you refine your niche even further.

A third and lesser used tactic is to check Craigslist. While this has not been such a reliable source in the past, it has improved. See how many are advertising the product or service you are contemplating, especially locally. You may want to begin locally and then expand. A lot of freelance ghostwriters begin locally and then expand nationally as their business grows. Other niches remain local and become highly profitable. One group of entrepreneurial college students in a major city built a business by offering to renew busy people’s car registrations/tags. They expanded to other services after that.

Step 4: Think About Starting Part-Time

Think About Starting Part-Time

The majority of successful at-home entrepreneurs do begin part-time because they cannot afford the loss of income from their regular jobs or are in college. It may take you longer to realize a profit, but you will not have the debt. The more important factor here, however, is that this allows you to “test” the market and to refine your niche as you move along.

Step 5: Look for Sidelines

As your initial niche becomes profitable, you may want to think about sideline related niches that you can add. Ideas for these may come from your customers themselves. Suppose you are offering a course in personal finance and it has become quite popular. One of your customers mentions that s/he would love to be able to find such a “course” written on a much different level for his/her kids. You now have another product to add.

If you are truly serious about a niche home-based business, be sure that you have the personality traits for entrepreneurship, find a niche that relates to your own skills and passions, figure out how you can solve a problem that others have, and make certain that it is a viable and needed product or service. If you take the 5 steps outlined above, your chances for success are solid.

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