Here is the second part of How to Start a Small Business and sorry to all those who were annoyed with my Alien story coming between part 1 and 2. Let me have my creative outlets! Anyways ☺ Thanks to all those who wrote me such nice tweets to @marenkate on my first, self published story! It was totally encouraging. Now back to the nitty gritty…

The second part of putting together a product to sell, after you have collected a list of a few things you know you could do better than others, make profitable and enjoy in the process, is the seeing if there is a market portion. Some people this market research is boring, I find it fascinating. It can be like a game, where money is the grand prize, if you have the right mindset. That mindset being, you want to find a niche where there is A. a (preferably desperate) need and B. a group of people aware of this need & ready to fix it.

So lets tell a story, since stories seem to get the point across in business better than anything else. Jill wants to get the h-e-double hockey sticks out of her boring 9 to 5 job. She would love to be her own boss but doesn’t know what to sell or how to start her own business. Jill followed part 1 of How to Start a Small Business and boils it down to three things she likes to do, is or could be an “expert” (my definition is if you know more than 50% of the population this can qualify expert status in many cases) and thinks there is a good chance she could make some money from. These three things are as follows:

Teaching people with chronic pain or illness the benefits of Chinese medicinal practices paired with Yoga… Jill has been a Yoga teacher for several years & is a die hard fan of Eastern medicine in healing the body and mind. She thinks she could write a book or ebook on it and create a community online via a blog, Jill guesses she could monetize this through the ebook, membership fees or adsense but isn’t quite sure.

Jill is a licensed CPA and has taken the test which is touted to be harder than the bar exam. She has studied all the material, which normally costs upwards of $1200 and believes she could create an eBook from her study notes and possibly a membership course to help Accountants pass the CPA test. Jill is confident that if she could get readers she could make money because Accountants have money to spend and are desperate to pass the CPA so they can become more marketable and increase their income.

Jill is an avid amateur photographer and would like to start a small business that connects amateur photographer’s, teaches them the basics of photography and provides a community where they can learn, share resources & find the best places to shoot in the world.

Out of these three options Jill now must pick just one to get started with, she can always do the others later on but for the time being she doesn’t want to get distracted and spread herself too thin. But how can she chose when she likes each option?

This is where niche selection meets metrics. Scary word I know but its fun, think of it like a game. Firstly, she’ll go to Google keyword tool. This free application allows you to enter in keywords and get the numbers on how many times a phrase, keyword or category was searched the month before. It also will suggest other keywords to you that have to do with the same specific term.

Jill searches for things like: Chinese medicine, Yoga healing, Help passing the CPA test, CPA study guide and Amateur photography blog. The more specific she gets with keywords the better because the search results may be more for ‘Yoga’ but so will the competition, she wants a niche she can dominate or atleast rank highly in.

I hope by now you can see where our story with Jill is going… this is EXACTLY how I have picked my businesses and started out each time, except the first and that was a disaster. From then on I learned to run the ‘numbers’ as they say beforehand and make sure there is an urgent want and people realize the need. If 10 people a month search for Yoga healing.. no matter how fervently Jill believes it works it means it won’t make her squat. On the other hand if 2500 search for CPA study guide and she knows there is an urgent desire to pass the CPA from people who realize this need then cha-ching Jill may have just hit the jack pot.

So the formula goes: brainstorming niches > boiling down niches > running numbers on best niche keywords > picking the one with the most potential

I want to hear all of your success stories when you implement this practice, because believe me, from personal experience it works every time!