Imagine yourself on a Monday morning, sitting down to start work – but instead of clocking in to your 9-5 job, you’re building your own business. You’re creating a brand centered on your passions, interests and expertise.
Sounds good doesn’t it?
To start your own business, you first need to know how to find your niche.
A niche lets you home in on what makes your business unique, differentiate yourself from your competitors and build your brand to be the best at what you do.
For expert tips on finding a niche, we sat down with Think In Color speaker Annie Atherton, COO and part owner of The Financial Diet, the biggest independently-owned digital publisher devoted to educating women about money and the #1 YouTube and Instagram channel in its niche.
Here are Annie’s top tips, plus real-life examples from successful business owners who’ve been there, done that, and got the income to prove it.
- Why is it important to find your niche?
- Expert tips for how to find your niche
- Examples of businesses who found their niche and ran with it
- How to add a second niche to your business
If you’re starting a business for the first time or looking for ways to level up your existing business, finding a niche is essential. A niche lets you narrow down your offering, define your target audience and clarify your brand messaging – which makes your job a whole lot easier in the long run.
Here are 4 key benefits of finding a niche.
4 benefits of finding a niche
- Stand out from the crowd
The digital world is a crowded one. If you can find your niche, it’s much easier to stand out in the sea of competitors. There are so many businesses today trying to push everything under the sun.
To make a success of your business, you have to think about how you can stand out.
Finding a niche lets you find a unique path that will set you apart from other businesses. With a clear niche, you can differentiate yourself from your competitors and win the customers that they’re not serving.
- Understand your core audience
If you can find your niche, you can narrow down the audience for your products and services and make your marketing more targeted. Customers will know exactly what they’re getting from your business from their very first interaction – and they’ll keep coming back.
If you can find your niche and stick to it, you can boost customer loyalty and even build a community around your brand. This can be a huge asset for encouraging repeat sales and referrals.
- Boost your revenue
Finding a niche also lets you settle into a gap in the market and exploit it. If you’re the only one doing what you’re doing, you have more opportunities to make new products that cater to your customer base.
It’s also important to realize that starting your business in a niche market doesn’t mean you have to stay there. It’s really common for niche businesses to develop into larger businesses that cater to a wider audience as they evolve.
The Financial Diet started out as a blog by our founder, Chelsea Fagan. It was originally a space for Chelsea to talk about her personal money journey. As the business grew, our offering evolved.
We’re now much broader. We feature many different voices across The Financial Diet, we reach over a million people a month on YouTube, Instagram and our online courses and we are the largest independently-owned digital publisher devoted to educating young women about money. That all started from a very specific, very small niche.
- Focus your energy
When you’re starting a business for the first time, there’s a big risk of spreading yourself too thin. You only have so many hours in the day. Finding a niche lets you focus your efforts on one key area, letting you do less but do it better.
This not only takes pressure off of you as an entrepreneur, it also makes it easier for your customers to know who you are and how you can help them. The more specific you can be, the better.
Ready for 4 tips on exactly how to find your niche? Let’s go!
Research your competitors
Competitive research – also known as competitive analysis – is the process of finding competitors in your industry and looking at exactly what they’re doing. That includes who their target audience is, what their USPs are and what products they’re offering.
The goal of competitive research is not to get caught up in comparisons between yourself and other businesses. Your aim isn’t to feel defeated or discouraged but to identify exactly where you fit into the options facing your clients.
Competitive research example
To break down how to find your niche through competitive research, let’s take a look at The Financial Diet as a case study.
For The Financial Diet, the competitors span several different categories, including:
- Personal finance
- Personal and professional development
- Businesses targeting women age 18 – 34
These categories are broad and they include big publishers and individuals talking about money, as well as banks and investment companies producing their own content.
To take some examples – there are women’s lifestyle businesses like Pop Sugar who are reaching a similar demographic to ours. They’re covering money and careers, but they also cover a broad variety of other topics from beauty to fashion to celebrity gossip.
This type of competitor analysis helps you see exactly where your business’ value lies. The Financial Diet is not unique in addressing topics around money and personal finance. We are not the largest women’s lifestyle company or the largest personal finance company – but we are now the biggest company that specifically combines money and women’s lifestyle together. That is our unique offer.
The process of finding a niche means finding that sweet spot between your competitors where you’re offering something new or specific to an audience that doesn’t have access to it yet.
4 questions to help you find your competitors
When you’re doing your competitive analysis to help you find your niche, try asking yourself these 4 questions:
- Who else is offering what you’re offering?
Do a quick brainstorm, jot down competitors off the top of your head and then do more concrete research. Google potential competitors, explore your social media feeds, ask your friends. As you research, write a list of the top competitors in your industry. The aim is to try to get a really broad sense of what other brands your clients might be using to help them in this area.
- What are they doing really well?
Next up, ask yourself what these competitors are really good at. Maybe they have great websites or very clear offerings. Maybe they have a strong social media presence or they use a lot of cool influencers to publicize their products. Add more detail to your list by writing down the top strengths of each of your competitors.
- What about them might turn off some consumers?
No business is for everyone. There will inevitably be some people who are not served by your competitors. This is where you start to get an idea of what gaps exist in the market and where you could find a niche.
- How does their audience compare to your target audience?
Zero in on their target audience. You won’t have access to their analytics or data but you should be able to make educated guesses as to your competitors’ target audience based on their marketing. For instance, what kind of people are in the photos of their ads and on their website? What’s their brand voice like? Where are they advertising?
Try to get a feel for their audience and then use this to help you find your niche – you’re aiming to service people who aren’t currently being targeted by other companies.
Let’s take a look at another example…
Competitive research step-by-step example: The smoothie business
Mike is setting up a smoothie delivery company. Here’s his competitive research step-by-step, asking himself those 4 questions.
- Who else is offering what you’re offering? There’s a wide range of smoothie delivery companies currently on the market. Let’s focus on Daily Harvest and Splendid Spoon right now.
- What are they doing really well? These brands deliver healthy produce to people’s doors for their customers to make smoothies at home. They both have really beautiful visuals on their websites and social media and high quality branding.
- What about them might turn off some consumers? The products are relatively expensive and they’re recyclable, but not reusable. For consumers who are committed to sustainability, they might be turned off by the amount of packaging. There might also be people who are looking for a lower cost version.
- How does their audience compare to your target audience? It seems like their audience is young, busy professionals but their marketing is specifically directed towards women. Women make up the majority of their images and their branding is quite feminine. This is different to Mike’s target audience – who might be men or another demographic that’s not currently being targeted.
This type of competitive research gives you a really good head start to help you find your niche – you get to see what everyone else is doing and the opportunities for you to do something different. You can look out for gaps in their target audience, pricing, services and other areas.
Competitive research is a brilliant tool if you’re trying to discover how to find your niche and where there might be opportunities for your business.
Find your audience
Whether you’re setting up a business or looking to do more with your current business, you probably have a rough idea of who your audience might be.
To find your niche, you need to take concrete steps to better understand your target audience. It’s time to drill down into exactly who you want to target.
Knowing your audience is key to everything you’ll do as a business.
What this means is really knowing who you’re trying to speak to and sell to, what their interests are, where they live, their age, their values and more.
If you have social media channels set up for your business or a website that gets good traffic, you can use your analytics data to tell you who’s engaging with your current content.
Knowing our target audience is a huge part of how we’ve been able to grow The Financial Diet in the last six years and it’s pivotal for anyone who’s trying to be an entrepreneur or make a success of an existing business.
To give an example, a The Financial Diet’s audience could be mostly:
- Millennial and Gen Z
- With higher than average education
- Not necessarily high income individuals
- Relatively new to personal finance
No business can be everything to everyone.
They are okay with not appealing to everyone, including men and anyone outside of our age brackets. Some people who aren’t their target audience will like their content and we’ll welcome them but they’re also okay with not reaching people outside their target audience.
3 questions to ask yourself to help you find your target audience
If you’re looking to understand your target audience to help you find your niche, here are 3 questions you can ask yourself:
- Out of everyone you’ve reached so far, who was your most valuable customer?
When we talk about your most valuable customer, we mean the customers who are most profitable for your business. These are the people who are buying more from you or buying higher value products, such as your premium course or content offering.
Figure out who your most valuable customers are to help you find your niche – these are the people you need to be targeting.
- What has been the most successful marketing strategy for you so far?
If you’ve been running your business for a while, take a look at where you got the most bang for your buck in terms of marketing. Are you seeing more engagement on Instagram? On YouTube? With email marketing? This will help you figure out what channels your target audience are using and how they most like to engage with your brand – so you can do more of what works.
- What demographics could you let go of in order to focus on what you do best?
With every business, there is going to be some white noise around your target audience – you’ll have outliers who don’t fall within your core audience, but they’re still buying from you. When it comes to how to find your niche, one of the tricks is to let go of those customers and drill down on what you do best and which demographics you’re serving best. This will influence your branding, your marketing strategy and what direction you take your business.
To see these questions in action, let’s go back to our smoothie service example.
Find your audience step-by-step example: Mike’s smoothie business
- Out of everyone you’ve reached so far, who was your most valuable customer? Out of everyone Mike’s reaching, his most valuable customer is people who care about the environment. Those are some of his most loyal fans so far and also who he identifies with most as a founder. He seems to have a slightly majority male audience, which is unusual in this space and something he can capitalize on.
- What has been the most successful marketing strategy for you so far? So far, some of his most successful strategies have been posting videos posted on YouTube showing where he sources his fresh produce from.
- What demographics could you let go of in order to focus on what you do best? What Mike can let go of is trying to have a big following on Instagram. He’s had a hard time growing his Instagram and has seen zero conversions. This may be because his core demographic is men who care about sustainability and most of them aren’t on Instagram. He’s not seeing returns on his investment so he needs to table that strategy for now and let go of whatever demographics he has reached there.
If you’ve already had some sales, this kind of audience analysis makes the process of finding a niche more straightforward – look at who has been buying from you, who are your most valuable customers and which marketing strategies you’ve had success with so far and use this to shape your business.
This method will help you narrow down your audience and find your niche.
Ask your customers
Another handy tip for how to find your niche is to ask your existing customers. If you already have customers using your products or services, now is the time to talk to them! Ask your customers what you can do better and listen and learn from their feedback.
Here are 3 methods you can use to help.
Customer surveys are a really useful method for getting to know your customers and helping you find your niche.
This form of customer research is best if you already have a large audience. They’re most beneficial for audiences of 1000+ customers, though you can also learn some valuable insights from just 100 customer responses.
The more people you can convince to respond, the better your data will be. Multiple choice surveys allow you to analyze your data in a straightforward way that’s super simple to understand – you’ll get exact percentages for who answered what, e.g. 75% people answered question C.
The easiest and most effective way to conduct a customer survey is to use a survey builder like Typeform or SurveyMonkey. Your customer survey can then be sent out to customers via email or shared on your social media, community page or content platform. Then see the results roll in. To encourage more responses, incentivize your customers with a small prize like a gift card or a free coaching session.
The idea with a customer survey is to find out your core customer demographics, what their pain points are and their needs. This will be a huge help for finding a niche for your business.
Customer questionnaires are also really helpful if you tend to work with people one-on-one or in small groups.
You can give out customer questionnaires at the beginning or end of your service, sending it via email or through your coaching platform.
Customer questionnaires are more open-ended than customer surveys. They usually call for long-form answers rather than multiple choice. The goal with customer questionnaires is to get more detailed information from your clients. Your aim is to gain a deeper understanding of who they are, their lifestyles, their biggest challenges and what they need from you, as well as how their experience has been with you so far.
Be open to criticism and feedback. It can sting, but it’s always useful to know what your customers really think.
Free events and meetups are probably the most fun form of customer research. They’re not as precise as other data gathering strategies but they give you a chance to interact with your customers face-to-face and get a sense of who they are and what they want.
The goal of free events is to learn about your audience. You can gather customers at an in-person event or an online workshop and do a meet and greet format. You can also have a group question and answer session or a discussion-based format.
If you can, try to encourage attendees to also fill out a customer questionnaire or survey after the event to get even more detailed feedback.
Host a workshop
If you don’t have an existing customer base, hosting a free workshop or webinar is a really helpful strategy to learn more about who you’re targeting and how you can help them better.
Choose a topic that’s relevant to who you think your target audience is – based off of your competitive research, social media or website analytics and initial audience research – then publicize your event via your main marketing channels.
To increase the value of the workshop for your business, require attendees to input their email address when they register to build up your email database. You can also include a Call-To-Action at the end of your presentation to encourage people to purchase your products or services or follow you on social media.
After people have attended the workshop, send them a survey or questionnaire to fill in so you can learn more about them and get more customer data. You can also send them a follow-up email to convert them into paying customers!
These customer feedback techniques are really helpful for finding a niche. They give you the chance to find out exactly who’s buying from you, who’s engaging with your brand and what you can be doing to serve them better. The more insights you can get from actual customers, the more you can tailor your offering to them and become the best at what you do.
Identify your unique strengths
To find your niche, you need to know what you do differently to other entrepreneurs and businesses. If you can identify your unique strengths, you can narrow down what you’re going to offer your customers that they don’t currently have.
Be a specialist not a generalist
It’s important to remember that you can’t be everything to everyone – but you can be the perfect solution for some people at some point in their lives.
If you know the broad area you want to work in and some of the people you want to target, you can start narrowing that broad category to something more specific. Instead of general marketing, for example, your niche could be Instagram ads for small businesses – it’s easier for someone to know what you do and whether or not you’re right for them.
It’s also much simpler for you to market yourself as you can have one clear message that you use across all your marketing channels.
For the Financial Diet, our unique strengths are delivering basic financial advice in a way that’s relatable to young women. We have the largest YouTube and Instagram in our niche, and a loyal and valuable audience. Our audience is made up of young women who have self-selected to be interested in personal finance and we have built a strong brand community of loyal followers.
What are your strengths? Try to write them down in just 2-3 sentences.
Do what you do best
When it comes to finding your niche, focus on what you’re actually going to be able to do well and what you’re passionate about. What do you enjoy doing the most? What types of customers do you connect with the best? What are your core values?
If you can identify what you do best, then you can direct your efforts and attention towards doing more of that! That’s where your biggest opportunity for success is and that’s the key to finding a niche that you can throw your heart and soul into.
Sunny Lenarduzzi – Video marketing expert
For Thinkific course creator Sunny Lenarduzzi, finding a niche meant refining her skills in video marketing. In just a few years, she built a business centered on helping companies utilize video marketing and social media, including developing a YouTube series for Hootsuite that increased their subscriptions by 75%.
Hooplovers – Hula hoop training
Businesses don’t get much more niche than Hooplovers, the online hula hoop academy founded by Deanne Love. After working as a primary school instructor, Deanne quit her job to become a full-time hula hoop instructor, teaching in-person classes and setting up an online coaching school with Thinkific. Today, Deanne has over 50,000 followers on social media and many happy students thanks to finding her niche and capitalizing on it.
R.J. Pierce Law Group – Intellectual Property lawyers
Founded by Rosezena Pierce, an attorney and Think In Color 2021 speaker, R.J. Pierce Law Group is a leading Trademark Boutique, providing accessible trademark services to entrepreneurs. For this business, the process of finding a niche involved honing in on what they do best and making that their core focus – helping them become the go-to advisors for trademark law in the US.
If you’ve found success with your first niche, you might be thinking about expanding your niche or adding a second niche to your business. Here are Annie’s 3 tips for how to add a second niche to your business.
Consider your capacity
Adding a second niche to your business means expanding so you need to start being realistic. Do you have time to take on another niche? Do you have expertise in this niche? Do you have the ability to take on people to help? What resources will you need to make it a success? Start by asking the hard questions to give yourself an idea of whether or not the move is right for you.
See how your niches can integrate
If you’re thinking of adding a second niche to your business, it’s a good idea to think about how your second niche can integrate with your existing niche. While you will probably need to create separate resources, content and marketing materials, seeing how your niches can work together can open up opportunities for collaboration and adapting or repurposing existing content.
Make it work for your existing customers
If you’ve spent years catering to a certain type of person, it’s a good idea to work on expanding your niche rather than changing it completely. This avoids isolating your existing audience.
To help you find your niche, get to know your new audience as you did with the first audience.
To use The Financial Diet as an example, we’ve historically always targeted young women. Recently, we’ve started expanding to cater to new moms. The majority of our current and historical audience are not parents, they’re single younger women.
To cater to our new audience, while being careful not to isolate our existing audience, we knew we needed to do our research. That meant doing questionnaires, surveys, focus groups and extra research to really know that new audience. From there, we started picking a few things that we can do to cater to them. We hosted a digital workshop on parenting and finances but we were also careful to frame it in a way that it didn’t totally alienate our non-parent audience.
So if you’re wondering how to find and expand into a new niche, think about how you can create content that includes your whole audience, both old and new.
Ready to find your niche and kickstart your business?
Whether you’re just starting out or looking to level up your current business, it can be hard to know how to find your niche and which niche is right for you. Competitive research, audience analysis and talking to customers are all strategies that can help. When in doubt, focus on your core strengths and what you do best and use this to find your niche.
For more helpful topics for course creators, save your seat for Think in Color 2022 – a 2-day virtual event designed to help entrepreneurs and creators from underserved communities navigate the ever-evolving digital landscape.
Join us and our panel of inspiring women of Color to share their personal stories, insights, and advice for entrepreneurs looking to gain success with their digital business endeavors.
Save your seat now for Early Bird registration!
This blog on how to find your niche originally published January 2021, and was updated in June 2022 to be even more broadly applicable.