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3 Reasons Online Business FAIL (AND How To Avoid Them)

This is absolutely THE most important step in starting your online business!

In this "Find Your Market Framework" exercise, I'm going to show you how to virtually guarantee your idea will be profitable by running some simple benchmark tests. And conversely, let's help you totally AVOID markets or niches that don't pass these tests for whatever reason. 

My aim is to help you get a profitable online business up and running, so...

PLEASE don't skip this!

I actually didn't know about this framework until about 3 years into my online business journey and it caused me to languish in frustration and suboptimal profitability. I don't want that for you. :)

At the risk of overemphasizing this, it's 1000% worth your time and effort to diligently pursue completing this exercise. It could make the difference between faster success or slower (and more painful) failure.

All that said, here's what we're going to cover in the "Find (& Refine) Your Market Framework"  exercise.

1. The Ideal Market Size Test: Using the free tool Google Trends, I’m going to show you exactly how to test your brainstormed market and find some relevant targeted keywords so that we can run your keywords through the...

2. The Ideal Market Competition Test: Utilizing a simple Amazon test, you’ll very easily be able to see if your market is too big, too small or just right, so that you can focus on becoming wildly profitable.

3. The 5 Market Essentials: We’ll walk through the 5 characteristics your market needs to have for you to be profitable. You want to make sure your market is:

    1. An Evergreen Market
    2. An Enthusiast Market
    3. A Market With A $10,000 Problem
    4. A Market With A Future Problem
    5. A Market That Has “Players With Money” or PWMs

By the way, all of these exercises come from Ryan Levesque’s book “Choose. - The Single Most Important Decision Before Starting Your Business”. So if you want to go into some more depth I HIGHLY recommend this book. This link extends a $10 offer for the hardcover that also comes with an additional $200 of awesome bonuses including the audiobook. This book alone has completely revolutionized both the way I deploy my own online business as well as the way I teach it.

Let's dig right in...

 

 

1. The Ideal Market Size Test:

  • "The Goldilocks Rule" - Not too big, not too small... just right.
  • This simple test will tell you IF your market is too big OR if there's too little demand for your particular niche.
  • Head over to trends.google.com and set the time range to "past 5 years". Next, type in these 3 keywords (using the compare function).
  • orchid care
  • start online business
  • elder care
  • These 3 keywords will serve as your "North Star" keywords and will be your guide when it comes to determining if your niche is either too big or too small. If your keywords fall within the range of these 3, you're "Goldilocks".
  • Next, type in the keyword "pilates". Notice how far above the other three keywords this one is. This tells you that this is an ENORMOUS market and it's likely going to be difficult to be competitive because of it's size and likely competition. You'll want to niche down to a smaller part of this market to find your ideal market.
  • Next, type in the keyword "pilates ball exercises". Notice how far below the other three keywords this one is. This tells you that there's likely not a ton of demand for this niche and that you'd likely either need to "niche up" or choose another niche.
  • Now that we've accomplished that and if your market is in the market size sweet spot, you can move on to...
 

2. The Ideal Market Competition Test:

  • For this we use the "Amazon Test"
  • Head over to Amazon.com. Make sure to use the US site as that's likely going to be the best indicator of market competition.
  • For time-sake, I'm just going to talk you through this part.
  • Click up to the Amazon search bar and type in your keyword.
  • When Amazon serves up the results, here's what you're looking for:
  • Are there "sponsored products" that are education and expertise -related coming up in the search results?
  • If there are 1-2 or 8-9, mark this keyword as a "maybe".
  • If there are zero or 10 or more, mark this a "no go". Theres likely too much competition.
  • If there are somewhere between 3-7 products, that indicates a healthy level of competition and this keyword is a "go".
  • There's MUCH more to go into here, but this will get you up and running and possibly whet your appetite to go even deeper.
  • BUT, even if your keywords have passed all of these tests so far, there's still one more we have to do.

 

3. The 5 Market Essentials:

Here's just a little bit of insight for this next exercise: Don't be discouraged, if the niche for your online business doesn’t have ALL of these 5 things.

If it doesn't have all 5, you may need to either look either niching up OR niching down in order to find that optimally profitable market.

Let’s jump into each one and talk about that a little more.

 

  • Market Essential #1: An Evergreen Market

“You’re looking for a market that continuously self-renews despite season or temperature.”

An evergreen market is juxtaposed to a fad market that sort of just comes and goes. Think of fidget spinners, mood rings, Cabbage Patch Kids or beanie babies.

Some examples of evergreen markets would be: fitness, personal finance, weight loss, dog care, personal development, entrepreneurship and orchid care.

BUT just because it’s evergreen, doesn’t mean it’s necessarily a “green light” market. We still have 4 more factors to consider.

So next, let’s talk about…

 

  • Market Essential #2: Enthusiast Market

“This describes a market where the buyers are highly enthusiastic about the topic, so much so that they tend to remain buyers for a long period of time.”

Some examples could be: antique collectors, weight loss, sports car lovers, guitar players, home brewers and bonsai tree lovers.

You want to be in a market where people tend to become buyers for life. For example, in the guitar player market, you have people who make large purchases like guitars, and amplifiers, but also purchase ongoing education products and products for maintenance of their gear on an ongoing basis.

Some examples of non-enthusiast markets (that you want to avoid) would be things like flea removal, mold removal or roof repair to name a few. These are markets where someone is looking to solve a problem, but once that problem is gone, they’re off to other things.

 

So, so far if you’ve checked the evergreen and enthusiast markets, next you’ll want to look at…

 

  • Market Essential #3: A $10,000 Problem

“It’s not enough to enter a market that is both evergreen and enthusiast. You need to also focus on solving an urgent problem in the context of that evergreen and enthusiast market and that’s where the $10,000 problem comes in.”

You’re looking for a problem that has a high pain point attached to it, say it starts at $1000, but it doesn’t end there.

The key question to ask here is: “What is a $1,000 problem that under certain circumstances transforms into a $10,000 problem? What’s a $1000 problem that has the potential to become 10 times bigger under certain circumstances.

One of the examples Ryan uses in the book is the new pre-potty trained puppy owner that needs to travel with their new puppy that incessantly pees on any carpet it encounters.

While this could easily be categorized as a $1000 problem (ruining rugs, carpets, cleaning bills, etc.), it becomes a MUCH bigger problem when you think about your dog peeing on airport carpets or in the belly of the 747.

So, you’re looking for a $1000 problem that, under certain conditions, could turn into a $10,000 problem, which leads us to..

 

  • Market Essential #4: A Future Problem

“What you’re looking for here is evidence of additional future problems you can solve for that same customer, above and beyond that first problem you might solve for them. 

Because once you’ve taken the time to solve your customer’s urgent $10,000 problem up front and set yourself up to become their trusted advisor, you have the opportunity to sell additional products and services down the road.”

For me in this business, once I help my students get their online business set up, some of the future problems I can help them solve are: 1) how to expand their email marketing, 2) how to build and sell online courses and 3) how to help them scale their businesses to six-figures and beyond.

So, if you can engage your market with that initial $10,000 problem, that gives you an open door to build credibility and to continue to solve problems they’ll have as a part of their success journey.

BUT, even if you have ALL of those 4 and you don’t have this one, your business is either not going to work or is going to be WAY harder than it needs to be.

 

  • Market Essential #5: Players With Money (PWM)

“A viable market is one that has PWMs: people who are willing to spend a large sum of money in one particular area of their lives to address or avoid a recurring problem, or, in many cases, to fuel an important goal, hobby or personal vision.”

THIS is THE fatal mistake I made in my first online business that caused my business to grow like absolute pond water…

My first business, zerodebtcoach.com, which is my personal finance brand, only had 4 out of the 5 of these and missing THIS one, made a HUGE difference and not in a good way.

  1. It is an evergreen market.
  2. It has an “enthusiast element” meaning that much of my audience had caught the enthusiasm of the BENEFITS of winning  their money.
  3. It has a $10,000 problem (at the very least).
  4. It has future problems like: how do I strategize to increase my income, what do I do once I’m out of debt or how can I get to financial independence.
  5. The one that was missing was this step… #5: Players With Money.

So, while I had a HUGE heart for people at the low end of the personal finance spectrum who were living paycheck to paycheck, I failed to recognize that they were not a PWM market.

Man, I really wish I would have had this framework when I started. This would have totally helped me to pivot a MUCH more profitable sub-niche and MUCH more quickly than the 3+ years it took.

So, now that we've covered the Find (& Refine) Your Market Framework, please leave your biggest "a-ha" moment in the comments below and make sure to ask any clarifying questions.

Thanks for watching and I'll see you in the next one.

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