In order to make sure your membership business is profitable, you have to select the right market. Here’s how.

First – Look for Fanatics

If you want your membership business to be profitable, you have to find a marketing with fanatics in it. Fanatic is defined as someone with an irrational enthusiasm. These are the people you’re looking for because they are so enthusiastic they’re willing to spend money on their topic of fanaticism. OK, so we know what a fanatic is, but how do we find them?

• One simple idea that’s easily forgotten is to scan the magazine racks when you’re out and about. It’s becoming increasingly difficult to run a print magazine. So if you see one on the shelves you know they are making money, which means that there are enough people interested in what they’re saying to make it profitable. This is a very good indication that it’s a good niche for you to go into.
• Pay attention throughout the day in your regular activities. See what people are talking about on the radio, TV, at parties, in public, etc. People generally talk about things they are interested in. Which means you can start a membership business providing information on it.
• Conventions, clubs, and organizations. Once again, if there are enough people interested in a topic to create a club or organization, then there are enough people to build a membership business around it. Conventions are expensive to hold and attend, so if one if going on that’s another strong indication of a good niche to go into with your membership website.
• Think about the things that you are interested in. Chances are that if you like a certain topic or hobby, other people do, too. The icing on the cake here is that you get to build a business doing something you love.
• Google Trends. This is a great way to figure out what people are interested in. Google Trends tells you the most popular current search terms. The reason people are searching Google for info on these topics is because they are interested. And the fact that it’s made it into Google Trends tells you LOTS of people are interested. Building a membership business around things people are actively searching for is a great way to ensure your success.

Second – Analyze the “commerciality”

Once you found a potential niche or topic to center your membership site around, you need to figure out if you can actually make any money in it. One way to figure this out is to see if other are making money in it.

Here’s how to determine if you can make money in your chosen niche

• Find out if there are blogs or forums related to it. Just search Google for “YourNiche blog” & “YourNiche forum” and see what comes up. This lets you know there is a market (a group of people actively interested in the niche.)
• See if other people are creating and selling product in this niche by searching in Google Shopping, ebay and Amazon. What you’re trying to figure out is if anyone is making money in this niche, and if people are selling products it means they are making money.
• Monitor Google Adwords to determine if people are running the same ads for weeks in a row. If they are, this means they’re making money on these ads – otherwise, they’d stop running them. Which means there is money to be made in your niche.

Last, but not least… How hard will it be to break into this niche?

After figuring out a good niche and determining that other people are making money in it, the last thing to do is decide if you will be able to enter the market. Here’s how to make this determination:

• Figure out what kinds of products people are interested in. If it’s mostly physical products, coaching and live seminars, then it will be harder to break into this niche. Membership websites based on information are the easiest to start and maintain.
• The next thing to look at is the competition. You don’t want to try to break into a saturated marketing, so figure out how many people are already selling in this niche.
• Compare the size of the market versus the number of competitors. Some competition is a good sign – just make sure the market is big enough for you to join in.
• How quickly do people in this market make buying decisions and are the ready to buy? Some niches are made up of people who require lots information and have a very long lead time, and some markets are filled with people who will spend lots of money right now.

Putting it all together

So far, we’ve talked about exactly what it takes to pick a great niche: One with a hungry crowd of fanatics, who are ready to spend money on information about their topic. And you’ve determined your barrier to entry is small enough to give it a go. Now that you’ve prepared properly, you’re success is 99% guaranteed. How to actually run your membership website is the only thing left to talk about…