The biggest hurdle for anyone starting a new Internet business is picking a niche.
We all have various interests. So it’s hard to determine if a topic will work or if it’s a waste of time.
This problem becomes more pronounced when building an authority business. It’s hard to pick a topic when you know it’s a multi-year commitment.
More importantly, determining the profitability of an idea is the key to long-term success. So while an idea might look good on paper, it’s important to find out if it will actually make money.
In this edition of the Authority Internet Business case study, I’ll go over my seven-step strategy for identifying the profit potential for any niche idea.
Not only will I provide a detailed blueprint, I’ll also give specific examples from the research of DevelopGoodHabits.com.
[title color=”green-vibrant” align=”scmgccenter” font=”verdana” style=”normal” size=”scmgc-2em”]20 Questions to Generate Profitable Niche Ideas[/title]
A few weeks back, I published a Kindle book called How to Find a Profitable Blog Topic Idea.
In this book, I described a few actions you can use generate a list of niche ideas.
To get started, go buy a small notebook that you will carry with you at all times. (You can also use an mobile app like Evernote.)
Use this notebook to jot down every niche idea that pops into your head. I recommend you do this for at least a week. Write down every idea – even if it doesn’t seem that interesting.
After that, you should examine who you are as a person. We’ve all been taught to look for our similarities to other people. Sometimes, though, it’s our differences that help us stand out. Figure out what makes you unique and this could lead to a compelling niche topic.
To kick things off, I recommend writing down a detailed answer to each of these 20 questions:
- How old are you?
- What is your gender?
- Where do you live in the world?
- What is your racial background?
- What is your relationship status?
- How do you relate to other people?
- Do you have children?
- How do you spend your time?
- What do you do for fun?
- What are your current hobbies?
- What is your current career?
- Is there a career you’ve always wanted to try?
- What skills do you possess?
- What skills would you like to learn?
- What are the things you’d like to achieve?
- What are your fears?
- What challenges do you experience on a daily basis?
- What obstacles have you overcome in your life?
- What are your favorite books, movies and songs?
- What do people tell you’re good at?
The goal of this exercise is to discover hidden interests that might not be immediately obvious during a brainstorming session.
Third, when you have a few good ideas, drill them down to sub-niches. Nowadays it’s impossible to compete with a “generalized” website. Instead you need to take a niche that you find personally interesting and identify a sub-category where you can create specialized content.
I did these exercises a few months back while trying to locate an authority topic.
First, I spent a few days writing down a lot of ideas – in fact I filled five pages of notes with different potential niche topics.
Next, I eliminated every idea that I didn’t like. This left me with four topics that I found personally interesting:
- How to make a living as a writer – even when you don’t have a lot of natural talent
- Travel hacking and how to travel on a budget
- How to train for and complete marathons
- Personal development and success
The key here is I wanted to focus on a topic that I do on a daily basis. So while running and traveling are fun hobbies, they’re not something I do every day.
During this exercise, I also realized that each of these ideas relates to a habit. I didn’t achieve instant success with any of them– instead I slowly increased my skill-set by repeating a positive action on a daily basis.
That’s an idea for a niche.
Rather than focus on the artsy-fartsy personal development topics like the Law of Attraction, I’d create content that strictly focuses on forming good habits.
Once I determined my core idea, I completed seven-steps to see if habit development was a profitable niche idea:
[title color=”green-vibrant” align=”scmgccenter” font=”verdana” style=”normal” size=”scmgc-2em”]Step #1: Do Google Keyword Research[/title]
Keyword research helps you discover the overall demand for a particular idea. It provides a rough estimate of how many people search for related information on a monthly basis.
I know there are a variety of tools for keyword research, but I like to keep things old-school. Most of the time, I’m fine with Google’s Keyword Tool.
Just complete these steps to get started:
- Type in a few related phrases.
- Select the Exact Match parameters.
- Deselect Broad/Phrase matches.
- Hit the search button.
I recommend you begin by using a base keyword. Then enter a few related phrases. So don’t just think of keywords – use the specific obstacles that people would like to overcome.
Spend some time on this step. You’ll want to repeat this process a few times to generate a large list of related keywords.
My advice is to look for at least 10,000 exact matches in your authority market. This can be from a single keyword or from a combination of phrases. The important thing is to look for searches where people seek information on this subject.
In a cursory search, I found a whole series of keywords that directly or indirectly relate to habit development:
- Good habits (6,600 exact searches)
- Bad habits (8,100 exact searches)
- How to break a habit (880 exact searches)
- Healthy habits (6,600 exact searches)
- Reading habits (1,300 exact searches)
- Stop smoking (27,100 exact searches)
- Stop drinking (3,600 exact searches)
- Nail biting (6,600 exact searches)
- Morning routine (5,400 exact searches)
These keyword results show that there is enough demand for this particular idea. So let’s move to the next step.
[title color=”green-vibrant” align=”scmgccenter” font=”verdana” style=”normal” size=”scmgc-2em”]Step #2: Look for Competition[/title]
Competition is a good thing. Multiple websites and products in a market mean that someone is making money.
Since your authority business is a sub-niche of a niche, it’s important to see if it’s a topic where people have interest.
Here are a few places to look:
- Blogs on related topics
- Podcasts in iTunes or Stitcher
- Videos on YouTube
- Facebook pages and groups
- Niche-related forums
- Advertisements when doing keyword searches in Google
Simply put, if you can find lots of blogs, content and advertisements, then it’s a safe bet that you have a profitable idea.
I’ll admit it – I kind of cheated with this step. I know from past experience that personal development is a huge market. So I didn’t spend a lot of time researching other websites.
That’s because I knew (off the top of my head) that the following websites are all successful businesses in the personal development space:
- Life Hacker
- Steve Pavlina
- Zen Habits
- Dumb Little Man
- The Art of Non-Conformity
- Life Hack
- Live Your Legend
True, none of these sites only talk about habit development. But I’ve read enough of their articles to know that readers love this particular topic.
[title color=”green-vibrant” align=”scmgccenter” font=”verdana” style=”normal” size=”scmgc-2em”]Step #3: Locate Affiliate Products[/title]
A great way to monetize an authority business is with affiliate marketing. To that end, you need to find existing products that provide a quality solution.
Start by looking at the different affiliate networks to find offers related to the niche idea:
Another option is to look at the competition from step #2. Usually these sites do a good job of finding the best products to promote. In addition, many have their own offers, which you can promote through an affiliate program.
This step wasn’t a slam dunk for my habits idea. I did find a bunch of personal development offers, but most dealt with the “Law of Attraction” type of content that I personally detest.
So, yes, I didn’t find any good habit affiliate products. However I know that when I start networking and talking to other marketers in the personal development space, I’ll eventually come across a quality product to promote.
[title color=”green-vibrant” align=”scmgccenter” font=”verdana” style=”normal” size=”scmgc-2em”]Step #4: Identify Information Buyers[/title]
Selling information is another excellent way to monetize an authority site. So you want to look for people who buy information products that solve recurring problems in your market. Usually these take the form of simple “how-to” products.
More importantly, you want to analyze Amazon’s marketplace.
I know from personal experience that Kindle publishing is a great way to create immediate income for a brand new site – even if you’re selling books at the $2.99 price point.
So you’ll want to go to the Kindle section on Amazon and enter your top keywords in the search bar. Then sort by New and Popular. Check out each of the results that come up and look at their Bestsellers Rank.
My advice is to pick a market where you can find three or more books that have under a 20,000 rank. Each one equates to an average of five sales a day. That means at a $2,99 price point, you can make over $10 a day for each title.
I recommend you keep looking on Amazon till you can find over three book ideas. These will directly relate to a Kindle books that can be created in the future.
The Kindle market is really exciting for my idea. While there aren’t too many books that directly relate to habit development, I did find a number of related ideas where I can help readers solve specific problems related to positive habits.
1. Making Good Habits, Breaking Bad Habits: 14 New Behaviors That Will Energize Your Life by Joyce Meyer (#3,982)
2. The Power of Habit: Why We Do What We Do in Life and Business by Charles Duhigg (#782)
3. The Early To Rise Experience: Learn To Rise Early in 30 Days by Andy Traub (#4,657)
4. Make it Happen in Ten Minutes a Day: The Simple, Revolutionary Method for Getting Things Done by Lorne Holden (#19,908)
5. What the Most Successful People Do on the Weekend: A Short Guide to Making the Most of Your Days Off by Laura Vanderkam (#9,574)
6. 2k to 10k: Writing Faster, Writing Better, and Writing More of What You Love by Rachel Aaron (#3,425)
This is just the tip of the iceberg. From this initial research, I’ve made the determination that my authority business will mostly be monetized through Kindle books and information products.
[title color=”green-vibrant” align=”scmgccenter” font=”verdana” style=”normal” size=”scmgc-2em”]Step #5: Locate Software Solutions (Optional)[/title]
Offering a software solution is another great way to monetize an authority business. Instead of asking people to buy information, you’ll promote a tool that helps them overcome a specific obstacle.
There are two types of software solutions that can be offered to an audience. I like to look at desktop software on a site like Download.com. Then I’ll hop over to the iTunes store to see what apps are available.
Apple’s store uses a search function that’s similar to Google. Simply enter a keyword and you’ll get a list of apps that relate to that search.
What I look for here are apps that have at least 50 reviews. Your average app gets one review for every 500 to 5,000 downloads. So an app with 50 reviews has been downloaded at least 25,000 times. This is not a bad profit for a simple app that costs $1000 to create and you’ll charge $.99 to download. (We’ll talk a whole lot more about app development in future blog posts.)
In Apple’s iTunes store, I found a number of apps related to habit development. The trick was to look for software that emphasized daily action and journaling:
- Healthy Habits Premium (157 Ratings)
- The Habit Factor (53 Ratings)
- Quit It Lite (189 Ratings)
- Mind Jogger (138 Ratings)
- Spending Tracker (1163 Ratings)
More importantly, I also found a HUGE “information gap” in this market that I can exploit with an app I hope to release in the next few months.
Overall, the app market looks promising – especially if I can build an email list of people specifically interested in habit development. This will have a major crossover effect into my related projects.
[title color=”green-vibrant” align=”scmgccenter” font=”verdana” style=”normal” size=”scmgc-2em”]Step #6: Locate Multiple Problems[/title]
The long-term profitability of a niche depends on how many problems the audience members experience. So you can’t build a lasting business if you’re providing a “one-and-done” solution.
Instead you need to build an audience of readers who know and trust your opinions. Then you can become their “go to person” whenever they encounter a specific obstacle.
Identifying multiple problems happens when you combine step #1 with step #5. During this research phase, you’ll notice information gaps and product gaps. Ultimately these ideas will lead to solutions that you can provide through your authority business.
Habit development is a huge market. As long as I can find a framework that works in multiple scenarios, then I’ll have an endless amount of content and product ideas.
Here are a few things I determined during the initial research phase:
- People need a step-by-step plan for eliminating bad habits
- Understanding “habit triggers” is the key to making a permanent change
- Some want quick fixes they can immediately implement
- People want a solution to a specific bad habit
- Keeping a daily log helps people achieve a long-term habit change
- Lots of people need help with overcoming a lack of willpower
These ideas barely scratch the surface of habit development. Each one can lead to a Kindle book, information product, affiliate offer or mobile app. This is what’s possible when you look for multiple obstacles in a single niche.
[title color=”green-vibrant” align=”scmgccenter” font=”verdana” style=”normal” size=”scmgc-2em”]Step #7: Look for Passionate People [/title]
Last, but not least, you should determine if your idea has a passionate audience. You can figure this out by looking at the websites where people meet, interact and share information:
- Niche related blogs
- Niche related forums
Don’t underestimate the value of passion—you want people who are strongly interested in a topic and love talking about it.
I’ll admit that not many people “get excited” about the idea of habit development. What I do like is the fact that it’s an idea directly relates to specific problems that everyone faces on a daily basis.
Good habit development can help readers:
- Stop deadly habits like drinking, smoking and binge eating
- Improve their careers by focusing on successful routines
- Achieve major goals by completing step-by-step actions
- Get more of life by doing the important things first
- Turn a hobby into a successful business
We all want to improve our habits. So once I find a framework that works in most situations, I’ll have the building blocks for a profitable authority business.
[title color=”green-vibrant” align=”scmgccenter” font=”verdana” style=”normal” size=”scmgc-2em”]How to Locate Your Profitable Niche Idea[/title]
It doesn’t take a lot to locate a profitable niche idea. Basically all you have to do is brainstorm a few ideas related to your personal passion and look at the seven profitability indicators.
So I urge you to do the following:
- Brainstorm ideas that directly relate to your personal interests
- Ask the 20 questions to dig deep in what truly matters to you
- Narrow down this list to a handful of business ideas
- Check each one using the seven steps that I just detailed
- Eliminate any idea that doesn’t pass most of these profitability indicators
- Pick the one idea where you have the most excitement and personal interest
While this post is a “crash-course” on niche selection, it’s still a great plan for finding a profitable idea. It’s the same strategy that I used to pick DevelopGoodHabits.com, so I know it’s a blueprint that can work in a variety of situations.
Simply follow this seven-step plan and you’ll locate a great niche topic within the next few days.Take Action. Get Results.