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Problems, Personas, and Profits: How to Find the Right Niche for Your Product Business

When you launch a product business, it can be tempting to not choose a definitive niche. You might think you don’t want to limit yourself, opting instead to appeal to as many people as possible.

But the truth is that without a specific niche, you are likely to struggle when you’re starting out. Your niche gives you focus and direction. Being highly focused is one of the best things you can do for your brand.

Choosing a specific niche will help you define your message, stay focused, and be more effective with your marketing and sales strategies.

What Exactly Is a Niche?

You’ll hear the word “niche” thrown around often when you’re starting your business, but it’s important to define the term and understand what it means and how it applies to your business.

In business, “niche” means two things—the specific group of people to whom you’ve chosen to sell and market your products, and the unique benefit or advantage you offer that’s different from your competitors. You’ll need to consider both sides to find your niche.

Another way of thinking about your niche is, “Who am I selling to and how am I solving their problem in a way that my competitors aren’t?” If you can offer a group of people a unique solution to their most pressing problem, your brand will be far more likely to succeed.

What Makes a Good Niche?

Lynda Falkenstein, author of Nichecraft, writes, “Good niches don’t just fall into your lap; they must be carefully crafted. Many entrepreneurs make the mistake of claiming they can do many things and be good at all of them. Smaller is bigger in business, and smaller is not all over the map; it’s highly focused.”

A good niche isn’t something you just choose at random… It’s something you very deliberately create. It should appeal to a specific group or solve a specific problem. It also needs to align with you, your skills, and your values.

Most importantly, your niche needs to be profitable. After all, if you can’t make money off of it, then your business can’t thrive.

Finding Your Target Market

So how do you find a profitable niche? The first step is figuring out who you want to sell to. You can’t do business with everybody, especially if you’re just starting out. If you cast too wide of a net, you will risk exhausting yourself and confusing potential customers. The more specific your target market, the better.

Even large, successful companies have niches. L’Oréal Paris, for example, is a mass-market beauty brand. You can expect to find their products at a drugstore like CVS or Walgreens. But MAC, on the other hand, is an upscale brand. You can find it at stand-alone stores, upscale department stores, and ULTA. Each brand has its own draw and its own target audience.

The Quaker Chewy Granola Bar company targets parents, a very different market than Rise Bar, which markets toward vegans and health enthusiasts.

When your company becomes known to a specific group of people, customers will start coming to you instead of the other way around. Having a specific target audience will also help guide your decisions about what type of products to sell, which influencers to reach out to, and where to focus your marketing efforts.

Creating a Customer Persona

When you are visualizing your target market, you need to get extremely clear on who they are and what they want. The best way to do this is by creating personas—fictional characters that serve as the avatar that you want to target.

To create a persona, you’ll need to define both the demographics and psychographics of the character.


Demographics refer to statistical data about your customers. These are the first data points you’ll want to think about when creating your customer persona. These include your customer’s:

  • Age
  • Gender
  • Marital status/family size
  • Income level
  • Education level
  • Location
  • Language 

As you answer these questions, the picture of a specific customer or group of customers will begin to come into focus. You should be able to picture them in your mind, like a polaroid picture becoming clearer and clearer.

These qualities determine what types of problems your customers will have, what types of products they’ll want, how much they’ll be willing to pay, and more.


Psychographics go deeper than demographics and get at your customers’ values, interests, and personality. Pinpointing your customers’ psychographics will help you understand what they need and how to market to them.

These include:

  • Worldview
  • Passions
  • Needs and wants
  • Pain points
  • Spending habits

It’s important to consider your customers’ worldview and passions, but the most important considerations are their needs, wants and pain points. 

What keeps your customers up at night? What do they worry about the most?

If you understand your customers’ desires and problems, you will be much closer to finding a profitable way to serve them.

Industry-Specific Factors

There are other factors you might need to consider depending on what type of product you sell. For example, if you are launching a beauty brand, you’ll need to consider the key physical features of your audience, including type of skin, hair type, skin color, hair color, and body type. If you are launching a food brand, you’ll need to consider diet type and allergies.

Spend some time thinking about what questions you need answers to before you start selling to your persona.

Using Your Niche

Once you’ve clearly defined your personas, it’s much easier to determine what you want your niche to be. Remember that your niche will be the unique solution you can provide for your persona.

After you define your niche, it’s time to put it to use. Your niche will affect every product, marketing, and design decision you make. What type of packaging appeals most to your persona? What name will catch their eye and let them know that you can solve their problems? Where are they spending time online?

Your niche will help answer those questions and keep you from wasting time trying to target the wrong people. Keep focused and make sure that you are always aligning with your niche as well as with your vision for your company.

Working toward a launch for your product business? Take a look at our post The 7 Step Fool-Proof Process to Naming your Business or Product for more tips.