Free and promising niches for starting a business. How to choose a niche for a business: step-by-step instructions Find a new niche

A niche is a small but profitable market segment that arises in response to the unmet needs of a particular audience that have not yet been covered by competitors.

Profitable business niches are a topic that is relevant both for existing companies and startups at the planning stage. The former strive to differentiate themselves from competitors, the latter to find trends that will influence their choice of business.

The bad news is that niches are unstable. And you need to clearly monitor trends in your field to create a truly unique selling proposition. Pay attention to the giants. They constantly “insure themselves” by offering a wide variety of sets in assortment matrices.

The simplest example: good old Hewlett-Packard once sold equipment that simultaneously printed, scanned and sent faxes. At the same time, the company offered devices that performed all these functions separately. On the other hand, it’s also not worth “splitting up” and scattering across many niches or creating them artificially.

The good news is that we have unprecedented control over targeting. Provided that we know the characteristics of a representative of the target niche, it is easy to find him on the Internet, attract him and guide him through all stages of his digital funnel.

Choosing a niche: 5 stages of the process for an existing business

Your managers can be as experienced and trained as you like, follow all the techniques, have scripts, but this will not help if the target audience is chosen incorrectly. As a result of this systemic error, further segmenting the audience and choosing niches within it loses all meaning.

In general, the business process of choosing a niche, so-called niching, goes through several stages.

1. Analysis of the portrait of the target audience,
2. Selecting several niches within the target audience,
3. Marketing strategy development,
4. Analysis of the dynamics and cost of attracting potential customers in the selected niche.

Choosing a niche: signs of working outside your target audience

Choosing a Niche: Determining Your Target Audience

Choosing a niche: segmenting the target audience

The main step to segmenting your target audience and choosing specific niches within it is an ABCXYZ analysis of your customer base.

It allows you to first analyze the customer base according to two parameters: the volume of purchases of each counterparty (ABC group) and the frequency of its purchases (XYZ group). The point of the analysis is to place the buyer in one of the categories by volume (ABC) and in one of the categories by frequency (XYZ).

ABC Group:

• A - buys in large volumes
• B - buys in average volumes
• C - buys in small volumes

XYZ Group:

• X - buys regularly
• Y - buys irregularly
• Z - bought once

First, this study will answer important questions:

• Who is your ideal buyer?
• Who pays you more often and more,
• Where should the sales department focus its efforts?
• Which clients should you avoid working with altogether?
• And do your target customers even enter your funnel?

Secondly, at the intersection of ABC and XYZ in certain areas you will see exactly your customers.

Opening another business in a crowded niche is futile - more experienced competitors will win the fight. There are sectors with little competition and untapped markets. How to choose your own business niche and which search model to use.

Beginning entrepreneurs, as a rule, are aware that they are about to enter a market where competitors are already waiting for them. The only way to avoid the struggle for a place in the sun is to find a business niche that is free from competitors.

It may seem that the modern market is replete with all possible offers, but upon careful examination it turns out that opportunities for development exist. You can consider two strategies when looking for a free niche to develop a new business:

Development of the old market with new offers

We are talking about a narrow sector with little competition. The trump cards in this segment will be the high quality of goods and services or unusual offers.

New offers in an untapped market

This strategy is much more complex because it requires trading, production, or services that are unfamiliar to the consumer. In this way of business development, significant costs will be required for organizing a new type of production, registering a trademark, advertising campaign, market promotion, etc. It must be recognized that the chances of success with such a strategy are higher.

You can find an unoccupied niche by taking a closer look at the market, discussing with friends and relatives the needs for goods and services, and analyzing the state of a particular market segment. As a result of such research, it is quite possible that a niche will be identified, poorly developed or even free.

For small entrepreneurs, which is quite understandable, narrow market niches are attractive because they:

• Little competition.
• Individual approach to consumers.
• Stable, albeit small, market capacity.

It is not easy to master a narrow market segment; it is necessary to carefully analyze all the positive and negative aspects, study the new product and the attitude of potential buyers towards it. Only after studying the characteristics of the selected segment can an advertising strategy be formed. If you decide to promote a completely new product, you will have to organize an unconventional advertising campaign to attract the attention of buyers.

Apparently, there is no way to guarantee an unmistakable choice of your place in business. In each individual case, the personality of the businessman himself will be of great importance in determining the direction of the business.

Apparently, the widespread opinion has a right to life that when choosing a direction, you need to evaluate the market and choose a niche with the least competition and a good margin. It is believed that this method guarantees successful entry into the niche. The method of choice seems certainly reasonable, but if you think about it, everything is not so simple.

Let's look at the automobile market - huge and highly competitive. Suddenly you realize that the trade in premium cars is completely undeveloped in your city. Those who wish cannot buy a Ferrari either in your city or in neighboring cities, and in the nearest metropolis there is only one showroom offering such cars. Here it is - an unoccupied niche with no competitors and with unimaginable margins.

With some effort, you open a car dealership with Ferrari. But for some reason there are no queues lining up for you. Despite all the favorable conditions - demand, purchasing power of the population, absence of competitors - trade does not take place. What's the matter? It turns out that in order to sell a very expensive car, you need to belong among people who can buy it. This example, of course, is somewhat exaggerated. But the same principle applies to selling tomatoes at the market. When trading, it is impossible to achieve good results without mutual understanding with buyers.

Therefore, we will not risk confidently asserting that there are fail-safe algorithms for finding a successful business niche. Luck is a capricious young lady, it is impossible to be sure of her favor. But we can tell you three ways that will reduce the risks when entering your chosen niche.

Innovation model

This strategy is good for romantic businessmen who dream of changing the world for the better. Within this model, you don’t need to look for a suitable niche, but create your own. To implement this strategy you need a solid budget.

For example, you invented a pillow for insomnia. Now you need to not only produce your miracle pillows, but also convince people to buy them. You don’t even have to invent something yourself, you need to be able to push a completely new product onto the market. This is how we treat them as innovators or, but they were not pioneers in their industry. But it was they, not Xerox and Creative, who created the innovative niche.

Frankly speaking, it is unlikely that a mere mortal is able to create an innovative niche. You need very special conditions or unprecedented luck, or outstanding charisma, or a lot, a lot of money to be able to push your new niche onto the market. If everything succeeds, you will get everything at once - all the cream is yours. The obvious disadvantage of the strategy is high costs with a high probability of failure.

Verified models

Universal strategy. All the most advanced technologies are based on basic things. Sometimes, to enter an undeveloped niche, it is enough to choose an unpromoted base.

Here are examples of several “eternal themes”:

1. Money. There is no need to explain to anyone why they are needed. And bankers are needed to streamline cash flow. Working with money is not new, but it is always attractive.
2. Safety and Health. These are eternal values, since everyone wants to be healthy and confident in their own safety.
3. Relationship. Hot topic. Skype brings in billions because they were able to offer us new ways of communication. There is something to think about - an unlimited audience is waiting for new proposals.
4. Visual appeal. Everyone wants to be not just beautiful, it is very important to have a bright personality. Any help in creating an attractive image will be received with enthusiasm.
5. Time– a non-renewable resource. Any automatic device that saves time finds many consumers.
6. Entertainment. This market is truly inexhaustible - people spend money on pleasure without deep thought.
7. Subculture. There are many types of subcultures, you need to identify and use them.

The list goes on, but you already understand that this method does not require discoveries. You just need to use mechanisms that have been known for a long time. True, many people prefer to use this method, and finding a fresh direction for business with financial prospects can be difficult.

Hobbies

Quite often, entrepreneurs’ hobbies become business projects. What's wrong with combining business with pleasure? For those who have decided to do business, but do not yet know how, this method is the most favorable. Monetizing a hobby is an easier form of adaptation in the business world. You will do what you do best, and even with the worst start you will not lose. You will get pleasure in any case - whether you can create a profitable business or not.

Summing up

Choosing your niche is always difficult. If you find an unoccupied segment in which, in your opinion, there is a lot of free money and miraculously there are no competitors, do not rush to rejoice. Most likely, the “gold mine” is empty because competitors left it due to lack of prospects. Although it is possible that you have actually come across “new lands” - go for it!

Choosing a niche for a business is an unexpected problem both for a new entrepreneur and for people who are already doing business. Choosing a business niche directly affects success. If you have taken (are already going) the wrong path, then get ready to constantly overcome difficulties that will appear on the way again and again.

Therefore, approach the choice of a niche consciously: analyze, compare and understand the profitability. It's better than banging your head against the wall and trying to sell a product that no one needs.

Choosing a niche for business - misconceptions and myths

People create barriers for themselves in business. They come up with new products, want to be unique and try to cheat the system.

Some people succeed. But 99% of entrepreneurs with an “innovative” product quickly go out of business.

Less competition - more money!

A common misconception is that you should choose a niche where there is less competition. This is a fundamentally wrong approach. Just a high level of competition indicates that money is flowing in this direction.

Use logical thinking. Would hundreds of people bother with a business that doesn't make money? Obviously not.

This leads to the following misconception - the clients have already been taken away. This is not true. There are always clients.
Select a target audience from billions of people and work for it. The problem is not the number of clients, but the right offer and a well-developed product.

The business idea must be unique

Choosing a niche for a business depends on the uniqueness of the idea - absurd! Quality of service, in-demand product, quick response to market changes, well-structured marketing - these are the basics that will help in developing your business and making money.

Of course it's great if the idea is new. The catch is that it’s harder to promote new things. You essentially have to form a market and instill a culture of product consumption. This requires a lot of money. This point is worth considering.

Clients contacted our agency with new ideas and... 50,000 rubles for promotion. We refused them. Since the amount is small and people simply do not request such a product on the Internet.

If you have a new idea that has been tested on other people, then you should enter the market through the media, plus promotion budgets for at least 1 year in advance. Or find an investor who will make financial investments in the business for a share of the company.

I like the idea, so do others too

It’s great when a person is passionate about an idea and in love with a product. However, here lies the catch. A person believes in his product so much that he forgets about:

• real demand;
• margins and deal cycle;
• calculating the break-even point;
• taking into account market trends and analysis;
• payback period for investments in the project;
• analysis of competitors and target audience.

As a result, choosing the wrong niche for a business can lead to problems and cash gaps. The scary thing is that the entrepreneur blames himself for the lack of “entrepreneurial spirit”, for not being smart enough, etc.

Stress, despondency, business closure and... leaving for hired work begin. Although the only thing that had to be done was to calmly analyze the niche.

Make a list of at least 100 niches that you like and analyze each of them according to the following criteria:

• demand;
• marginality;
• deal cycle;
• complexity;
• volume of investment for launch and payback period;
• market trend;
• the presence of successful businessmen who earn millions in this niche; how much, on a scale of 10, do you like the niche you are analyzing.

Pavel Ugryumov

Choosing a niche for a business: obvious and non-obvious niches

Niches are divided into obvious and non-obvious. The former are attractive because they are a final and simple product.

The second ones are complex ones, which participate in the process of producing obvious ones. You can choose either type. Each has advantages and disadvantages.

Obvious niches

Obvious niches are business on the surrounding things that we see. Look around: furniture, cars, real estate, books and so on. These are final products that are in mass demand.

Advantages:

• easy to understand and quickly understand the niche;
• formed market;
• easy to analyze;
• a lot of requests.

Flaws:

• there is a lot of competition, therefore a high barrier to entry into the market;
• it is difficult to stand out among competitors;
• high risks.

Non-obvious niches

Highly specialized areas of business that are involved in the process of creating the final product. These are components for equipment, chemical reagents, etc. That is, such products are not found in ordinary life.

It’s worth building a business in a non-obvious niche only if you are a master in this area. For example, you have a higher education as a biologist, worked in a relevant industry enterprise, and then decided to open a business in this area.

Another example is the services of a forester who provides services for allocating zones for deforestation in accordance with the legislation of the Russian Federation.

Working for hire, a person received 70,000 rubles a month. He quits because wages are not raised, but at the same time remains the best professional.

Opens a business and works with a former employer on a contract basis. In this case, the check is no longer calculated in thousands of rubles, but in millions.

Only a person who has reached the “master” level can advance and earn money in highly specialized niches.

If you try to become only an organizer, you will encounter staff turnover and will not be able to fully control the process of providing services.

Advantages of unobvious niches:

• much less competition, while the demand for services is quite high;
• low entry threshold;
• minimal risks;
• possibility of independent pricing.

Flaws:

• You must be a specialist who has extensive experience;
• you need to analyze the demand for a highly specialized niche very well;
• At the beginning of your journey, it is quite difficult to earn money quickly and a lot.

You learned that there are obvious and unobvious niches, and got acquainted with their features. Which one should you choose? It's up to you to decide. The main thing is to take into account the recommendations and do a niche analysis before investing money, time and effort in your chosen direction.

Choosing a niche for business: trending directions

They decided to put this type out separately. Trending niches are similar to the obvious ones, but have a number of features. Here the analysis of demand for the product plays a major role.

For example, goods from China are ideal products to sell, but only at a time when the demand trend for them is at its peak.

This type of niche needs to be entered immediately and done quickly. The goal is not to build a stable business, but to hit the jackpot and move into another trending niche.

Let's take GPS watches for example. At one time, they could earn millions of rubles in a short period of time.

Now the demand trend is steadily falling and if you want to enter this business, then in 90% of cases you will lose money or reach the break-even point.

But the trend for electric bicycles and scooters is growing (2018). You can easily enter this niche. The main obstacle will only be finding a reliable supplier who will not let you down.

Advantages:

• the opportunity to earn quickly and a lot;
• no deep knowledge of marketing required;
• high demand at the peak of the trend.

Flaws:

• business is not forever - as soon as the trend starts to fall, you should leave this direction;
• risks - the supplier let you down, you didn’t manage to sell quickly, demand fell and you’re in trouble;
• the business is not suitable “for the soul” - the main task is to buy quickly, sell quickly and get a margin;
• you need to closely monitor trends, the slightest mistake and you are in the red.

Choosing a niche in business - algorithm and analysis tools

Choosing a niche for a business should begin with an analysis of demand (this does not apply to unique ideas). In the USSR, the model of supply superiority over demand worked. In simple terms - “take what they give.”

If you have studied modern economics, then you know that demand creates supply, and not vice versa! Trying to impose a product on the market is a path to bankruptcy.

1. Demand analysis

Demand is easy to analyze. To do this, you need to go to Yandex.Wordstat and enter the query you are interested in within the time limit.

To find out the demand for a purchase, add the word “buy” to the request. For example, “buy an electric scooter.” Don't forget to select the region in which you plan to sell goods or services.

Find out how to analyze demand in practice from the video in which our director Pavel Ugryumov will review the Yandex.Wordstat service.

2. Competitor analysis

Choosing a niche in business is impossible without analyzing competitors. Find out which players are present on the market, how much they earn, what promotion methods they use and what size budgets are allocated for promotion.

Imagine this situation: you decided to repeat the success of one project, but did not analyze a competitor who receives hundreds of thousands of dollars of investment from America for promotion.

And you have 50,000 rubles for launch. What will happen? With 100% probability you will fail, as you will not be able to even be at the level of your opponent.

If you analyze your competitors, you will understand whether it is possible to enter the market and whether it is worth doing.

Evaluate your competitors using the following algorithm:

• product line - what they sell;
• determine the best-selling product;
• unique properties of the product;
• determine the marketing strategy - what promotion/customer attraction tools are used;
• find out touch points with the audience;
• calculate the effectiveness of advertising channels;
• check your competitors’ sales algorithm (yes, yes, we leave requests, call, buy);
• determine sales channels;
• check the chain of work with the client;
• find out the availability of sales scripts;
• determine the average bill, number of applications, sales and market coverage among the analyzed competitors.

Result of competitor analysis

Based on the data received, you will understand what the state of affairs is on the market and whether you can take a piece of the pie. Also, based on your competitor analysis, conduct a SWOT analysis, which will help you differentiate yourself from your competitors.

If you don’t want to bother and waste time analyzing competitors, then delegate this process to our agency. Just click the button below and submit your request:

Choosing a niche for a business depends on the target audience. Knowing your target audience will help you understand whether you can satisfy customer needs at the same level or better than your competitors.

Also, knowing and understanding customers will greatly simplify business promotion and development in the future. The target audience is the foundation of the project. Understanding the pains, fears, desires and needs of the audience will ensure a flow of clients.

If you want to learn more about the target audience, we recommend that you familiarize yourself with the course: "". To find out more, just click on the button below:

*Remember! Anyone who knows the target audience has no problems in sales!

4. Assess margins and deal cycle

The choice of a niche for a business is influenced by the product margin and the transaction cycle. These two factors are closely interrelated.

Product margin is the difference between the selling price and the cost price of the product. In simple terms - net profit from sales.

See how profitable the margin is in the chosen niche. The higher the net profit, the better. But there are nuances with the transaction cycle.

The transaction cycle is the time that passes from the moment of contact with the client until the receipt of income. As a rule, the higher the margin, the longer the cycle and vice versa.

For example, a grocery store has a transaction cycle of 60 seconds, but the margin is quite low. Another example is real estate. Here the margin is much higher, but the transaction time takes weeks or months.

Determine the margin-to-cycle ratio and choose the option that best suits you.

5. Determine what your soul is about.

After analyzing the niche using dry statistical data, you will get a dozen directions. When choosing, we advise you to focus on knowledge and love for the niche. If you start doing something that is profitable but not your favorite, then nothing productive will come of it.

Love business, love clients! Well, we wish you success, high checks and a lot of positive emotions!

Because they position themselves differently and target different target audiences. In short, they work in different niches.

Examples can be found here and there: Zara and Bershka, Elle and Vogue, “Shokoladnitsa” and “Coffee House”... the choice of niche directly determines whether you will secure demand for yourself and whether you will be able to compete with other players. But how to choose your business niche in order to be successful? Let's figure it out now.

Why is this so important

To begin with, let's define the concepts. A niche is a specific, usually narrowly limited area of ​​activity that focuses on its target audience, and also allows the entrepreneur to demonstrate his competitive advantages and do his job as well as possible. For example, an experienced jeweler decided to open his own workshop for repairing precious items. There are a million such workshops around the city - and in order to improve their position and competitiveness, a jeweler needs to choose a narrower niche. Let it be the repair of diamond jewelry.

Thus, choosing a niche for a business provides, firstly, clear positioning and specialization, and secondly, a solvent audience. Those same diamond owners have money and are much more willing to pay more, but will entrust their jewelry to those who are better versed in such work. This, in turn, will allow our prospective jeweler to keep his prices high and work with more profitable clients.

“Step 1: look at what we love and what we can do”

In other words, we analyze our skills and preferences. Before choosing a niche, you need to clearly define what you can do well, what you are interested in working with and what you understand 100%. If an experienced jeweler opens his own jewelry repair shop, he will probably do it better and more convincingly than an athlete-bodybuilder who goes into jewelry stores only on March 8th.

Answer these questions: What am I good at? What have I always liked to do? What would I do for nothing if I didn't have to work for support? Write down all the options and try to find common ground between your interests and your business.

“Step 2: see where the crowd is and what is free”

To open a new business, an entrepreneur must carefully assess the overall market conditions - its capacity, demand and competitive environment: who sells what, how and for how much. Whether you want to repair jewelry or sell clothing, finding a good niche requires careful study of your competitors' offerings, positioning, and advertising messaging.

“Step 3: choose your niche for business”

It's time to decide which niche to choose! Simple types of niches in occupied segments are:

• targeting individuals or legal entities (tours for individual travelers, organizing holidays for corporate clients);
• gender division into men and women (men's watches, women's magazines);
• age ranking (clothes for children, phones for grandmothers);
• price division (cheap dumplings, elite handmade Belgian chocolate).

Complex nicheing highlights 2-4 elements at once, for example, by gender, age and price. Turning to a jewelry repair shop we are already familiar with, this could be:

• workshop for repairing diamond jewelry. Choosing this niche for business means that there will not be many clients, but each order will be well paid. The main requirement is the quality of work;
• Economy workshop for repairing precious items. In this concept, each order does not bring a very large amount, but the mass client comes in a continuous stream. The main requirement is speed.
• workshop for remaking jewelry. Targeting young and creative people who want original products. Cost – medium to high. The main requirements are creativity and boldness of ideas.

When addressing a complex niche, you need to clearly understand who your target audience is and how your offer differs from those already on the market.

“Step 4: check the selected niche for viability”

Now that you have chosen a niche, you need to understand how interesting it is to the segment you are targeting, and what could be the main reason why clients will turn to you. Otherwise, you may find yourself in a situation where the services of your jewelry workshop are, in fact, only needed by pensioners who have diamonds buried in their chairs, and their next retirement is not soon yet.

You can find out the opinion of your potential audience in a number of ways: conduct surveys among friends and on social networks, use mailing lists, or look at statistics on Yandex.Wordstat. In addition, you can contact specialized companies that will select a focus group and provide accurate statistical data.

The final step in our search for a business niche is to develop an advertising message that will convey your selling proposition to consumers and show the client how you differ from your competitors. Its main task is to be remembered, and at the same time to emphasize why you are better than everyone else.

Sooner or later, a person is faced with the question: continue to work “for his uncle” or try his hand at his own business. An independent business means personal and financial independence, the realization of ambitions, and status. But at the same time, these are increased risks and full responsibility for the final result. The success of future entrepreneurship is largely determined by the correct choice of business niche, which we will talk about in this article.

1. Decide on the business direction

Choosing a direction for future activity is the most important step for a beginning businessman. There is no need to grab headlong for the first (even popular) idea you come across. You need to soberly assess not only the prospects of the direction, but also your own opportunities for entering the chosen field and developing in it. It is desirable that the niche meets at least one (and ideally all) criteria:

• You should like the chosen direction. A business that you do with pleasure is more pleasant and easier to develop. Many businessmen called themselves happy only because they turned their hobby into a business. As a result, you receive both moral and material rewards.
• You must have competence in the chosen direction. Even if the niche in your profile is quite competitive, good professional knowledge and skills should help you take your share of the market.
• The services and goods offered must be in demand. The well-known formula from classical economics “demand creates supply” is relevant at all times. Of course, there are high-risk areas in which venture companies introduce fundamentally new products to the markets: in fact, the reverse formula works - the manufacturer creates demand with the help of a completely new product or service. But this option is more suitable as an additional option if you have an existing, efficient business. At the initial stage, the risks must be justified.

2. Assess the prospects

It's good when you have a clear idea of ​​what you want to do and how to go about it. But more often than not, when choosing a niche for a business, you start tossing between different options. Therefore, it is better to make a shortlist of ideas that you think will work in your execution. Having compiled such a list, you can begin to more carefully evaluate each idea in terms of opportunities and threats.

First of all, you need to understand two things:

• Who is your consumer in each potential niche?
• What are the prospects for each direction?

You need to clearly understand what customer needs your business will satisfy. Potential consumers are money, and they need to be assessed using various mechanisms: surveys of friends, thematic forums, groups on social networks, expert opinions. You need to create consumer profiles for each selected niche.

The chosen area must have development prospects. It makes no sense to invest in a direction that, although in demand now, has a tendency to “shrink” in the near future.

3. We weigh our options

The entry threshold is different everywhere, and this is influenced by various objective and subjective factors. When assessing each promising niche, these factors should be taken into account, even those that at first glance may seem insignificant:

• Competition. You need to understand who your competitors are and what advantages you will give potential clients. If the supply in a niche is excessive, and you are not ready to offer competitive advantages, then even knowledge and desire will not help you gain any significant position in the market.
• Your potential. We are talking about internal and external potential. Assess not only your personal capabilities, but also the capabilities of your environment. A childhood friend can become the first supplier of components, a wife’s friend can become a target audience and at the same time “word of mouth” advertising, an influential acquaintance can become a lobbyist for interests in the chosen market.
• Starting capital. It is important to understand the source of financing for starting a business. And if for the service sector this will not be the most significant amount, then for the manufacturing sector it is quite a decent amount. It’s good if you have enough of your own funds, but will you be ready to sacrifice other people’s or credit money?

A thorough study of all factors for each selected niche will help to gradate and compile your personal rating of business ideas. And then all that remains is not to be afraid to take the first step.

4. We count correctly

Drawing up a preliminary business plan for each idea is a rather labor-intensive, but necessary stage. It is important to understand that “the game is worth the trouble” because the ultimate goal of any business is to make a profit. Doing business for the sake of doing business is wrong and will ultimately lead to financial ruin.

It is the insufficient depth of immersion and excessive optimism in calculations at the initial stage that is the main reason for the unprofitability and bankruptcy of most beginning businessmen. When making calculations, you need to focus specifically on the pessimistic forecast. Even a seemingly promising direction with many unmet customer needs is far from a guarantee of a flow of consumers in the first stages of business development. The path from a potential client to a real one is quite long, and you need to be prepared to go through it “in the red.”

When drawing up a preliminary business plan, you need to calculate:

• One-time expenses at the very beginning. This may include the purchase of necessary equipment and tools, the cost of registering an individual entrepreneur or legal entity, purchasing a franchise, licensing, etc. These expenses are one-time and make up the bulk of start-up costs.
• Current or monthly expenses. This includes rent of premises, salaries of employees, utility bills, bank services, tax deductions, purchase of components and other costs. You need to see what you can save on at the beginning, and certain types of work (accounting, website maintenance) can be outsourced. In this case, you need to have a “safety margin” for at least three months, and preferably six months, i.e. be prepared to finance operating costs from your own pocket.
• Revenue plan or revenue. This is precisely the calculation for which optimism is the main enemy. Estimate revenue prospects based on the lower bound to be prepared for reality.
• Supply plan. This is not a pressing issue for the service sector, but is important for manufacturing. The production process must be provided with materials and components evenly and constantly.

A preliminary business plan differs from a full-fledged one, but it is quite sufficient to assess the possibility of entering the chosen business niche.

5. Making the final choice

After going through the previous 4 steps, you will see a more or less clear picture for each business idea. You have preliminary calculations in your hands, an assessment of each direction and an understanding of what needs to be done. Having weighed the prospects of each idea using the proposed methodology, you will end up with a very real niche for your own business.

Be prepared for difficulties in the first stages and be patient: return on investment is not a matter of just one month. But the opening prospects are worth starting your own business.