Online Business and Your Site Concept Tolerance Range
Looking for a formula to determine the best niche or site concept for your online business? It's impossible to give a set formula, as much as we'd all love to have one.
You have to look at the interplay of the number of keywords, along with their Demand, Supply and Profitability, along with your own goals and time commitment, etc., etc. In other words, do you know your niche or site concept tolerance range?
1) How much time do you have (or do you think you have) every week to work on your site? To win a niche with a high Supply/competition (250,000-500,000 range) will likely need at least 10-30 hours per week to succeed.
If you have only 2-10 hours per week to work on your site, Supply needs to be lower, under 200,000 (the lower your available time, the lower the Supply should be). Of course, your maximum income will be lower too. You may start to see income sooner in an easier-to-win niche, but your income limit is lower.
It's a natural trade-off. The laws of business dictate that you can't build a $200,000/year online business on 2 hours per week. However, you can build a surer-but-smaller income with a smaller niche, and then devote more time to building a larger, second business. One realistic tortoise step at a time!
2) How monetizable is this niche or site concept? If you are selling a product that earns $1,000 from each sale, you will need fewer customers to earn a good income, so you can afford to "work" narrow niches (ex., "Scottsdale real estate"). Product-oriented sites (such as review sites) tend to pay more per click if you put AdSense or other ads on your site. But these types of sites can be boring work, which brings up the next two considerations…
3) Are you passionate about the niche? If you are, the hours you invest working on your site will fly by, making the process "fun" instead of "work."
4) Are you knowledgeable about this niche? If not, you will need time to research and learn about the niche. If you are, you will know how to write great content that brings visitors to your site.
Look for a niche or site concept that has sufficient potential. You are looking for the right combination of winnability (considering your time availability), searcher demand and monetizability, while being a niche that you know and enjoy. This is simply a guideline, however. Everyone's niche or site concept tolerance range varies.