The smart marketer knows that they can reduce the time it takes to make a profit by investing suitable time and money into niche marketing research before investing in any major product development or marketing programs.
In contrast, the entrepreneurs and businesses that go bust are those who act first - and study later.
Researching a potential niche market takes focus and dedication, together with a familiarity with what you are looking for.
Primary subjects to investigate are how profitable the niche seems, and how large it is.
For example, if there is a market where nobody spends any money then no matter how many people you advertise to, you are unlikely to make very much money. An example might be people looking for a cheap watch. Sure, you can sell them one, but they won't spend much, and are unlikely to come back soon to buy another one.
In contrast, there are niches such as golf where people spend considerable amounts of money and so just a small number of sales can result in a hefty profit.
Obviously the size of the market expands these possibilities even further. In a niche with lots of people spending a lot of money - you have almost unlimited potential for sales.
Once final aspect worth considering is how to intend reaching your niche audience. Are there common "meeting places" such as magazines or online forums dedicated to the niche you are studying in which you could advertise or will you have trouble reaching the group as a whole?
There are a number of tools you can use to ascertain these metrics plus a number of other important factors - see http://www.NicheMarketingWizard.com for details.
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