Last week I stumbled upon a niche that was perfect for the basis of a new business. I was looking for something and noticed I wasn’t quite getting what I wanted so I started to wonder if other people were having the same problem. So today I wanted to share with you a quick way to work out if a new business idea is viable.

Here is a quick formula that Eben Pagan talked about recently. I think it’s a good way to test a potential business so here are the 3 questions he asks about a new niche and the tools I recommend you use.

1. Is my prospective client experiencing pain and urgency or irrational passion (or both)?

If they aren’t, then you need to motivate them to buy your products. So it’s a lot easier if the motivation comes along with the client. This is basically a judgement call on your part, how motivated do you think the market are?

In my case, I was sure the market was extremely motivated based on the niche and past experience with similar areas. So tick.

2. Is my client proactively searching for solutions?

If people aren’t searching for a solution then you have to track them down and motivate them again. So you need to work out how many people are searching for solutions in your potential niche.

Luckily there are tools for this, so go straight to the Free Keywords Tool at Word Tracker. If you have an account, even better, but this will give you a good indication of how many people are searching for your potential keywords.

Make sure the number of searches is at least 15 per keyword (preferably a lot more!). You have to make a judgement call on how much traffic you need to make your business model work. Also allow for very low conversion rates in your analysis. A 1% click-through rate to your website and 1% sign-up rate should not leave you overly optimistic. Of course you should be able to do much better than that!

3. Does my prospect have few or no perceived options?

Searching for your terms in Google, how many both organic and Pay-per-Click (PPC) competitors do you have? At this point you probably want to remember that ranking well for your keywords will probably take a year or longer so you’ll be competing in the PPC section on Google.

If there is weak PPC competition you may be on to a winner. Remember there are a lot more ways to market your website but Google Adwords gives you a cheap and easy way to buy traffic at the start.

Now it’s time to test your niche.

How to Test Your Niche

The quickest and easiest way to test your niche is to start a PPC campaign for the keywords you’ve uncovered. The step-by-step process is:

1. Buy a new domain or use an old one.
2. Create a simple landing page with an email sign-up offering something of value.
3. Create a small guide or a few web pages that would be valuable for your niche. Preferably in the vain that your product would be.
4. Create your PPC campaign and point it at the new page.
5. See how many click-throughs and sign-ups you receive.

After a week or two you should know whether you have a viable business on your hands. My PPC campaign went live on Saturday and on Sunday I knew I had a strong potential market. For an idea, here are my first day figures. On two similar keywords:

• 535 people had seen my ad (impressions)
• 34 people had clicked through (6.35% click through rate)
• 2 people had signed up for my ‘newsletter’ (5.88% conversion rate)
• A 2.24 euro cost per conversion (0.16 euro cost per click)

So, based on no optimisation these figures looked pretty good to me. Also, the landing page I made wasn’t very strong either. At this point I need to sell an ebook or similar for 27 euros to 1 in every 12 people that sign up to break even on the first sale.

But of course I have plans to increase the lifelong client value with more products and a membership website with a monthly fee. As long as I offer great (valuable) products then I’m sure I can keep most of my clients as the competition is very weak.

Other Important Notes

I thought this might be useful to those people who want to set up an Internet business. It’s also a good method of research for those with existing businesses to do market research. Don’t take the figures to heart as they’re only an example of what I thought was a good opportunity.

People will have success with better and worse figures. The moral of the story is they got out there and did it. This provides you a quick, cheap, and easy method to test your new ideas and see which one you want to pursue.

And, as always, a good business has a solid passion and purpose (see the recent video blogs below). I’m not encouraging you to go out and use this system as a get rich quick scheme because those will ultimately fail. Two other important questions I always ask myself are:

1. Am I passionate about this subject?
2. Does this business have a purpose that will last 100 years or does it fit within the purpose of my  existing business?

Feel free to ask any questions in the comments, I’ll be only too happy to help.

It always amazes me how many people don’t measure their website statistics. Even those that do have statistics programs in place never look at them. As they say, you can’t improve it if you can’t measure it. I’m never sure exactly who ‘they’ are…but they seem smart…

So measure it!

Why

Measurement allows you to work out where you can start improving. Right now, you probably don’t know how many visitors you have a day or how many of them are buying from you because of your website.

Doesn’t that sound like important information to have? “YES” I hear you cry! Good kids!

Seriously, measuring your website is easy as pie. It’s a lot easier than half the things you should be measuring in your business. Maybe even than 77.3% of the things you should be measuring.

It’s also interesting because most people in small business forums are asking how they get more website traffic. Well, if you’re not measuring all the different aspects of your website, how do you know where the problem lies? Sometimes it’s not in the traffic, it’s in the message your website delivers.

So no more excuses, let’s get measuring…

How

My favourite way to measure things is the free one. Thanks to some great free tools out there you can now measure your website’s results without it costing you an arm and a leg. Which is usually a good thing as you’ll need those arms and legs to create your products or provide your service.

If I was you, I’d pop over to Google Analytics and install that. It gives you a wide range of measurements for your website that may open your eyes to some major problems. Some clients I’ve worked with have had hundreds of visitors a day that they didn’t even know about. So you can guess what happened when we changed a few things around…sales increased instantly.

Sales mean money, and money means more holidays in Spain, which is always a good thing.

You could also find out if your web developers already installed a statistics program that you can use. But I’d still install Google Analytics as well for the detail it gives you.

Homework

Nothing tricky, go and install Google Analytics. Wait a few hours and start exploring your website statistics. Then make a point of doing it on a regular basis to check the improvements you’re making.

It’s here! Are you excited? I am…well a little.

Yes, I’ve finally finished my first little website help video. It’s nothing impressive like the StomperNet guys produce or anything. In fact, it’s dramatically unfancy but I hope the content helps you.

It talks about the biggest problems small business owners face with their websites and then presents my blueprint for a successful website.

There’s another one on the drawing board that will go a lot more in-depth but I just wanted to test the waters with this one and see what feedback I got. So please let me know what you think in the comments below.

The short version with lovely background music (~4mins):

[youtube]http://uk.youtube.com/watch?v=yWuMQUH6FpM[/youtube]

The long version with my voice over explaining it (~10mins):

[youtube]http://www.youtube.com/watch?v=LnYO2YaFRAM[/youtube]

You can sign up for the next video here:
The Web Business Blunder

I talk a lot about getting your website right before trying to drive masses of traffic to it. But one of the problems when improving your website is knowing whether something is really an improvement.

Personally, I can take a small business website and instinctively know how to change the text to draw a visitor in. This is just something that comes with learning how to write good copy. But once you get to that point, how do you take it to the next level?

Remember how I always talk about the importance of measurement…well this area is no different. You can actually measure a webpages results and work out how well it is converting.

I’m not talking about just what sales copy converts visitors to customers, I’m talking about getting truly specific here. Let me explain.

Remember how each webpage has a purpose, a goal that you want the user to reach? Well that means, for every individual webpage, you can measure how many visitors reach that goal. And there’s even a free tool to test what webpage is better.

So go into your free Google adwords account and look at the “Website Optimiser” tool (more information here). This is one very powerful, and very unused tool from Google that your website can’t do without.

With it, you can change the content on a single page, and test what works better. You can change your homepage text to see which copy delivers your “Most Wanted Response (MWR)” from your visitor. You can change pictures, headlines, even complete layouts if you wish.

Can you see how this might be powerful? You can now test different variations until you find the one that keeps visitors on your website. And then test different variations of the best one, until your website is a conversion machine.

So go, have a play and see what you can come up with. Now you can really put your copy writing skills to the test! Good luck!

Ok, so I kind of trailed off in the middle of my 5 biggest secrets web designers don’t know about making money on the Internet series.

Christmas was one reason, too much work was another.

But the main reason is I wanted to separate it out as an article you must read. So that’s exactly what I’ve done by revamping my website and adding an articles and videos section.

So head on over to check it out, and read in full, The 5 Biggest Secrets your Web Designer doesn’t know about Making Money on the Internet

And when you’re done, come on back to the blog and let me know what you think or ask any questions you may have.

Talk soon.

So now you have your measurements and your goals. Are you being successful in working towards your goals? As mentioned before, you need to be checking this on a regular basis and adjusting your approach as necessary.

Use the information to find out what kinds of advertising work for you, what initiatives have given you more traffic, and where your website may have flow problems that are preventing sales. Always be willing to try new things, keep what works, and throw away the rest.

Be aware that search engines can take up to three months to notice changes made to your website. Optimising your website is a waiting game where you have to be patient to see results. That’s where a professional consultant can come in useful, they’ve done all the trial and error before and have a strong idea of what works and what doesn’t. If you’re going to do it by yourself, you need to have a lot of patience and it could be a year or more before you start to see true benefits. Also be aware that the way search engines rank websites are always changing and you need to keep on top of the current trends. While the basics normally hold true, you need to be flexible and looking for new ways to improve your website at all times.

Sales (from website)
How much money do you make from selling products on your website? Deduct your expenses to ensure you’re making a profit as well.

Unique Visitors
How many unique visitors visit your website each day, week, month, and year? Make sure you are looking at unique visitors and not page views or impressions. For example, you have 2 unique visitors to your website. One looks at 1 page, the other looks at 30 pages. Using unique visitors, it counts as 2. Using page views, it counts as 31. Unique visitors are your potential customers, so keep a close eye on this figure.

Returning Visitors
How many visitors return to look at your website a second time? These show people more likely to make a purchase and if your website has a consistent audience.

Conversion Rate of Visitors to Sales
How many visitors are actually buying your products? 5 sales divided by 100 unique visitors means you are converting 5% of your visitors to sales. Obviously, the higher, the better!

Duration of Visits
How long are people spending on your website? Do they find it in a search engine but leave within a few seconds because it’s not what they need or has a bad interface? You want targeted visitors to find you from the search engines. People that want to buy your products.

Top Exit Pages
What page are customers getting frustrated with your website? If you have a lot of people leaving at the shopping cart phase, maybe you have a problem that makes customers stop their purchase. Watch for problem areas.

Statistics about your unique and returning visitors, duration of visits, and top exit pages can be found using any good web statistics program. Just be aware that due to different measurement techniques, different programs can give widely varying figures. Be aware of this if changing programs and try to keep using one program so you have consistent results.

Everything that is useful needs to be measured. How do you know if it’s useful? Work out how it correlates to your sales and bottom line and then decide if improvement in this area would make your business more efficient and productive. If the answer is yes, you should be measuring it.

I know, I know, that sounds like a lot of effort. Since my goal is to get you the most results with the least effort, I’m going to be a little bit more specific. The following are the key website measurements that you should be making and aiming to improve on:

• Sales (from website)
• Unique visitors
• Returning visitors
• Conversion rate of visitors to sales
• Duration of visits
• Top exit pages

These six measurements should give you an excellent starting point for improving your website. The last two, duration of visits and top exit pages, are more subjective than the others but can be used for identifying major problems in your website. I’ll explain more in a second.