Start a Business from Home: Choosing a Market Niche

The first question everyone asks themselves when they attempt to start a business from home is this:  What am I going to sell?

While it is often the FIRST question, it should be the SECOND.  Let me explain:

In order to start a home based business profitably, you need to first have a group of people you can easily and cheaply reach with your marketing message.  The lower the cost of reaching your potential customers, the more likely you are to be as you start a business.

It’s simple math—spend less per customer and you will likely make more on each sale.

For years various online gurus have been touting the importance of  locating a market niche—finding a market with tons of demand and low competition.  When asked “How?” they would respond with “Well, just brainstorm some ideas and see what comes up.”

Not too helpful, is it?

Several years ago I began working on a method to find what people were already looking for online.  I tried a number of things, until I came up with a method that works for almost everyone.

First I go to this tool:

http://www.All-In-One-Business.com/stst

Instead of typing in possible niche topics (like “tennis” or “skateboard”), I would put in terms people use as modifiers and then see what terms are actually searched (most people use 3-4 words in their searches…)

Here is an example:

I type in the word “compatible”—a word often used when someone is searching for a particular product.  Putting it into the tool I come up with the following results  (these are just the top 15—there are many more presented):

17245 — compatible inkjet cartridge
 4311 — compatible zodiac sign
 3950 — compatible
 1725 — 360 backwards box compatible x
 1521 — compatible sign
 1143 — compatible horoscope
 1120 — compatible numbers
 986 — directshow compatible mpeg 2 decoder
 850 — compatible astrology sign
 775 — video controller vga compatible
 670 — compatible horoscope sign
 666 — 360 box compatible game x
 658 — compatible astrological sign
 635 — 360 backwards box compatible game x
 573 — 360 box box compatible game x x

In this list the number represents the number of times that term was searched in Overture’s search engine in the month of December, the phrase on the right is the actual search term.

Using this method I see the most searches were done for ink jet cartridges.  Now I can expand my search by typing into the same tool the phrase “ink jet cartridge.”:

97110 — inkjet cartridge
 18776 — inkjet cartridge canon
 17966 — discount inkjet cartridge
 17921 — cheap inkjet cartridge
 17245 — compatible inkjet cartridge
 15348 — hp inkjet cartridge
 13271 — epson inkjet cartridge
 10120 — inkjet printer cartridge
 4081 — lexmark inkjet cartridge
 1299 — inkjet cartridge refill
 985 — inkjet cartridge recycling
 874 — dell inkjet cartridge
 793 — inkjet cartridge retailer
 698 — hp inkjet print cartridge
 681 — inkjet ink cartridge

WOW!  Lots of people are searching for ink jet cartridges.  My next step would be to research how much competition there is in the market and possibly find this is a great place for me to start my business.

But what happens if ink jets are too competitive?  Simple:  I go back to the tool and research “zodiac sign” and “X box 360” to see what competition there is for those topics.  If I don’t come up with good results on either of those, I move on to another search modifier.

My students receive a list of over 500 of these modifiers and they are responsible for a great deal of the success they find in their online business.  I have put together a list of modifiers for you to access free here:

http://www.All-In-One-Business.com/nichewords