How to Decide What Kind of Business to Start: The Ultimate Guide to Choosing Your Niche

Hi, I'm Clare

This is a question I always get, and one I grappled with for a long time before starting my business, and even after.  

I changed my "niche" multiple times, and still consider going in different directions even now.

If you're like me, you have many different interests and aren't sure which direction to go with starting a business.  Or you might feel like you don't have any skill or expertise that you could turn into a business at all.

When deciding what kind of business to start, you have to look at it from two different viewpoints:

INTERNAL and EXTERNAL.

INTERNALLY, you have to decide what you want.  What you enjoy, what you want to be doing, and what you want your lifestyle to be like as a business owner.

EXTERNALLY, you have to consider what products and services the world needs and wants to buy.

Finding the sweet spot between the two is how you decide the perfect business for you.

Let's dive deeper:

Step 1: Identify Your Internal Drivers

1.  Brain Dump Your Ideas

Make a list of every business idea that excites you, no matter how unrealistic it seems. Don’t eliminate anything just because you lack experience—skills can be learned!

What have you seen others do that interests you?

What kind of businesses align with your personality and strengths?

Whose lifestyle do you aspire to -- what do they do ?

2. Define Your Ideal Lifestyle

Work backwards--your business should support your desired lifestyle, not work against it. Ask yourself:

Where do you want to work (home, office, traveling)?

How many hours per week do you want to work?

Do you want to work alone or collaborate with others?

Do you want to be visible on social media?

Do you enjoy working 1:1 with clients, or do you prefer selling digital products?

If you're struggling to answer these, try it the opposite way instead:

What things DON'T you want to be doing?

Identify the opposite of what you DON'T want, and write that on your brain dump list.

3. Narrow Down Your List

Cross off anything that doesn’t align with your ideal lifestyle. What remains should be businesses that excite you and fit the way you want to work.

4. Test the Excitement Factor

Go through your top ideas and visualize yourself running each business.

What does a typical day look like?

What kind of challenges would you face?

Do you feel excited thinking about it?

If an idea feels “meh”, cross it off. If it feels exciting and expansive, put a star beside it!

Even if you aren't 100% sure how to make it work or whether you have the skills/expertise to do it.  You can always research, learn, figure it out, and improve as you go.

5. Leverage Your Existing Skills

What do people always ask you for advice on?

What do you enjoy creating or talking about for hours?

What problems have you solved in your own life that others struggle with?

Is there something you are already passionate about ?

These are questions to help get the ideas flowing, but please remember - 

Skills can always be learned, and you will find things you are good at and passionate about as you explore your options.  So if you feel like you don't have anything to add with this step, don't be discouraged!

This just gives you a blank slate to explore, discover, and create whatever you want in life moving forward!

Step 2: Validate Your Idea Externally

While internal alignment is key, it’s also important to check if there’s demand for your business idea.

1. Look at Market Trends

Search Pinterest, Google, and YouTube for topics related to your idea. If people are searching for it, there’s likely demand.

Check Facebook groups, Reddit, and online forums—are people asking questions about this topic?

Notice what influencers, content creators, and coaches in this space are doing. If they’re making money, that’s a good sign!

2. Identify Proven Business Models

It’s easier to succeed in an industry that already has demand. Look for:

Online courses, programs, or services being offered in your niche.

Paid ads related to your idea (if someone is paying for ads, it’s likely profitable!).

What have you bought recently ? —if you needed it, others probably do too.

What do people desire the most, and what stops them from having it

Think about what kind of person you'd most like to help, and define what they want most in life.

Is it health?  Money?  Freedom?

Then, think about what gets in their way of having it. 

That is the problem they want to solve, and you can offer them something to solve it.  That's the most effective way to create a business!

3. Choose a Low-Risk Business Model

If you’re just starting out, consider a low-cost, high-profit business model like:

✔ Digital products (printables, templates, e-books, online courses)

✔ Coaching or consulting (helping people with something you know)

✔ Freelancing (writing, graphic design, social media management)

✔ Affiliate marketing (earning commissions by promoting other products)

These models allow you to start quickly with minimal investment and scale over time.

The Most Critical Step

After brainstorming and researching, there’s only one thing left: DECIDE.Yes, I'm serious.  Most people can't seem to do this and just spin their wheels for years and never actually start.

Being successful requires being able to make decisions for yourself.  And this is the first, most important one.

JUST PICK SOMETHING.

Commit to it.  Research it.  Learn about it.  Try it.  See what works and what doesn't.  Adjust your strategy and try again.

And if it doesn't work or you don't like it, pick something else.

You're not stuck with it forever.  You can pivot and evolve as you go.

JUST DECIDE.

Rest in knowing this, too:

There is no right or wrong choice.  You can't mess this up. 

It's just a choice, and whatever choice you make will take you down the path you're meant to take..

..to learn what you need to learn

..to become the person you're meant to be.

It's all just a journey, an adventure, a lesson.  Simply pick a path and go!

So pick an idea, commit to it, and take action. Start researching, testing, and putting yourself out there.

Your first business is just the beginning of your journey. The sooner you start, the sooner you’ll learn, grow, and create the success you’re meant for.

You got this! 

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