This article is the second in a 5-part series in which I show you how to monetize your own unique skills or knowledge to create a profitable online business. In this installment you’ll learn how to find a profitable niche.
If you missed the first article in this series, “How to Start a Skill- or Knowledge-Based Online Business,” no worries! You can find it here.
In the first article, I shared what you actually need to start an online business. You don’t need a fancy logo, a fancy website, or business cards. Focusing on those things will do nothing but waste your time and money.
What you do need to do can be summed up in this simple 4-step framework:
- Find your profitable idea
- Attract your ideal customers
- Create your irresistible offer
- Launch your irresistible offer
Even if you already have an idea, this process will help you validate it. Additionally, if you already have a business that’s struggling to make money, this process can help you clarify your offer so you can actually start to generate an income.
Learn more by watching the video or reading below. Let’s get started!
(This post contains affiliate links, which means—at zero cost to you—I will earn a small commission if you click through and make a purchase. Thank you for your support!)
How To Brainstorm Business Ideas
You might already have an idea but if you don’t, this is how you’ll generate a list of ideas and then choose one to test.
When brainstorming ideas, consider both acquired skills and knowledge. Ask yourself:
- Do you have a particular skill that you’ve developed over time that not everyone else has? For example, do you know how to ballroom dance? Are you a skilled woodworker? A writer?
- Do you have acquired knowledge about a particular subject that not everyone has? Do you know the ins and outs of real estate? Do you understand how blockchain works? Do you know how to manage teams of people? Are you great at math?
A few other questions you can ask yourself are:
- What are a few things that you’re naturally good at or that come easily to you?
- What have you been told you’re good at by family, friends, bosses, or teachers from your adult life or from childhood?
- What do other people come to you for help with?
- What were you really good at as a child?
Try to come up with as many ideas as you can without worrying about their viability as business ideas at this point. The main goal of your brainstorming session is to get a free flow of ideas going. Ignore the sound of that inner voice telling you, “no one is ever going to pay you for that.” It will only serve to block your flow.
At this stage, it’s also very important to remind yourself that you don’t need to be an absolute expert in any of these areas. A common trap when considering business ideas is that you have to know absolutely everything there is to know about a topic. This is untrue. While you will need a solid understanding of your given idea, you don’t need to know absolutely everything. All you need are viable solutions to specific problems.
I’ll use my own business as an example here. I help people learn how to generate passive income on the Kindle Direct Publishing (KDP) platform. I don’t know everything there is to know about KDP. Additionally, my methods aren’t the only ones that exist.
What I know for sure is that the methods I share have worked for me, so that’s what I teach. I’ve been able to get results for myself and others, and that’s all that matters. This is how you should be thinking about your own skills and knowledge as well. You don’t need to be a master, you just need to be further along on your path than those who are coming to you for solutions to their problems.
Once you’ve got a list of at least 10 skills or areas of knowledge you possess, it’s time to do a preliminary assessment to see if any of them are monetizable.
Assessing Your Business Ideas
For each idea on your list, see if you can come up with at least 3-5 potential product or service ideas. You’re looking for an idea that ideally has multiple ways it can be monetized.
Some products or services you could offer are:
- an ebook or a physical book
- a digital course
- a live or virtual workshop
- 1-1 coaching or group coaching
- a live or virtual event or summit
- affiliate opportunities
After you’ve gone through this exercise, choose the idea you’re most excited about AND that you think has the most potential to make money over the long haul. Once you pick one, it’s time to move into the validation stage.
Validating Your Idea
Validating your business idea is the most important step because it can potentially save you months of wasted effort and hundreds, if not thousands, of dollars. Skipping this step could mean the difference between a raging success or a spectacular flop.
In the previous article, “How to Start a Skill- or Knowledge-Based Online Business,” I shared my own “spectacular flop”–my decision to start a gluten-free meal planning service. I spent hundreds of dollars registering the business and months of time creating a website. I spent countless hours working on meal plans, a logo, and a bunch of articles.
It wasn’t until after spending all of this time and money on this idea that I realized that no one was actually going to pay me for this service. Don’t let this be you! Do the extra work upfront and save yourself from an epic flop like mine down the line.
If you’ve already created a business but are struggling to make money, consider investing some time into going back through the validation process. It could give you some ideas for new offers or just help you tweak your existing one so that it becomes more appealing to your target market. It might also help you decide that your original idea isn’t worth any extra time and money so that you can move on to another idea that will generate an income.
How to Conduct Preliminary Market Research
The best way to begin preliminary market research in any niche is to start with a simple Google search. Do similar businesses already exist? If so, this is a good sign. It proves that people are already paying for this product or service.
Don’t fall into the trap of dropping the idea because someone else is already doing it. There’s always plenty of room in the market for someone who can differentiate themselves. Pepsi didn’t stop themselves from entering the cola space because Coke was already there. You will likely have something to offer that your competitors don’t.
When I started teaching low-content publishing, I wasn’t the only person doing it. There’s plenty of healthy competition in this space. However, people gravitate toward me because of my design-centered approach and because I’m real about the amount of time and effort low-content publishing takes.
Some people might gravitate toward my competitors because of their knowledge of ads, or maybe they just prefer another personality over mine. Whatever the case, I truly believe there is room for everyone; it’s just about the unique viewpoint that you can offer.
If you don’t see anything similar currently in existence, either you have a really innovative idea on your hands or there’s a reason it doesn’t already exist—there’s no market for it. Either way, you’ll need to rely heavily on the later portion of the validation stage so that you can be sure your idea is viable.
Creating Your Ideal Customer Profile
Once you’ve established that there is a market for your business idea, you’re going to think about who your ideal customers are. Who, exactly, is your target market, and why would they pay for this product or service?
Don’t just think about demographics. It’s not enough to say “North American moms between the ages of 25 and 35.” This is useful information, but it doesn’t get to the heart of who they are or why they might be interested in your offer.
Get more specific and ask yourself questions like:
- What are their most important values?
- What are their hobbies and interests?
- Where do they hang out, online and off?
- What are their biggest life goals?
- What are their biggest fears?
- What are their biggest challenges, obstacles, or pain points when it comes to whatever your idea is?
- What product or service could you offer that would solve their biggest pain points?
- What is the transformation that they’re looking for, and how could you help them achieve that transformation?
Much of what you come up with at this stage will be based on assumptions. That’s fine for now. You’ll be testing these assumptions in the next step. Your goal right now is to start painting a picture of who your market is so you can start connecting with them in real life.
Speaking to Your Ideal Customers
This step is the most important step of the entire process: having real, one-on-one conversations with members of your target market—your ideal customers. It’s time to speak to real members in this niche so that you can complete the picture and fully validate your idea.
During this step it’s extremely important to find people who are actually a part of your target market and speak to them. Asking friends or family members who aren’t a part of your target market will not get you an accurate assessment of your idea.
Friends and family come with major biases. They may be likely to tell you what you want to hear in order to prevent hurt feelings, or they may even shoot you down in an attempt to protect you from failure. Most importantly, your friends and family are more than likely not your ideal customers, so it’s best to avoid asking them.
To find people in your target market you’ll need to find out where your target market hangs out, either in person or online. Once you find some people that fit in your target market, ask to have a brief 15-30 minute conversation with them over Zoom.
Pull out the ideal customer profile that you created in the last step and ask them the same questions that you asked yourself:
- What are their most important values?
- What are their hobbies and interests?
- Where do they hang out, online and off?
- What are their biggest life goals?
- What are their biggest fears?
- What are their biggest challenges, obstacles, or pain points when it comes to whatever your idea is?
- If you could offer them a dream solution to their biggest problem, what would that look like?
- Is there a particular transformation they’re looking for?
- Ask them any other questions that you think are relevant to your idea
Run a few of your product or service ideas past them and ask if they resonate. Ask them if they would purchase your product or service if it was available to them right now. You’re looking for a solid “yes” here, not a “maybe” or a “probably” or an “I don’t really know. If you get a solid yes from a good handful of the people you speak with, you’re on the right track.
Also, if similar products or services already exist, ask them why they haven’t purchased those solutions already. If they have purchased any of those solutions, what were their experiences with them? What did they like or not like about them? How could they have been improved?
Once you’ve had these conversations, revisit your ideal customer profile to fill in the blanks and make any necessary revisions.
Every time I’ve gone through this exercise with my ideal customers, the results have been pure gold!
Congratulations! You’ve Found a Solid Business Idea!
At the end of this stage you should have a solid business idea, a few potential product or service ideas, and a fairly comprehensive understanding of exactly who your ideal customers are and where to find them. This is an incredible foundation on which to start building your business.
In the next article, you’re going to start attracting your ideal customers to you like a magnet! When you do this, you’ll have a pool of potential buyers at hand once your offer is ready.
You’ll be using the best free marketing methods available to you, as well as positioning yourself as a trusted authority in the space you’re about to enter. This will benefit you greatly when launch time finally arrives.
If you’re enjoying this series so far and you’ve decided that now is the time to create your own skill or knowledge-based online business, download my brand new free guide, The 4-Step “No Time to Waste” Online Business StartUp Blueprint. In it, you’ll find everything I talked about today, as well as what I cover in this entire series, in written form, so you can reference it whenever and wherever you want.
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