to the niche.   For instance, if you were selling doughnut machinery to doughnut shops people will automatically have an affinity towards you because they know that youve faced the same problems as they are facing.   In addition, the more you know about your niche customer and what keeps them up at night, the easier it will be for you to provide tailored solutions to solve their problems and to communicate with them about your solution.   Question # 6 - Is the niche big enough to sustain your business?   Why enter a niche that simply doesnt have the economics to sustain your business over the long term. One of the first calculations you should do when deciding on a niche is a breakeven "reasonableness" assessment. This assessment tells you how much of the market you have to penetrate just to breakeven in the first year.   If you have to penetrate a high percentage of the market just to breakeven you might want to reconsider entering into this niche. However, if you can enter the market with only a sliver of penetration then it may be a good market to consider.   For instance, compare the two following scenarios for reasonableness:   Scenario 1 - Selling CD business cards to the real estate agent market   Approximate number of eligible realtors in the U.S. = 840,000 Number of units needed to sell to breakeven in the first year = 150 Required market penetration percentage = .01% (150 / 840,000) Number of Competitors = 9 Scenario 2 - Selling accounting and bookkeeping services to small businesses in Friendswood, Texas   Approximate number of eligible buying units in Friendswood = 350 Number of units needed to sell to breakeven in the first year = 42 Required market penetration percentage = 12% (42 / 350) Number of competitors = 15   Which scenario is more attractive? In Scenario 1 you would only have to penetrate .01% of the market to breakeven and you only have nine competitors. In Scenario 2 you would have to penetrate 12% of the market in your first year while competing against 15 other CPAs. Clearly Scenario 1 is the better choice (assuming you have a great product that people want).   However, there are many other factors that go into choosing a niche. This is just one factor (albeit an important one) to consider.   The Five-Step Method for Marketing to a Niche