One of the possible mistakes a new Internet Marketer makes when looking for a good Niche Market is not looking at the big picture. Or they approach Niche Marketing as a one product project, and not as a business. If you use the business approach you can often eliminate the too small issue.

There are three basic requirements for targeting any specific group of prospects. Ignore any of the three and you will not succeed in Niche Marketing no matter what your approach. But let’s look at the example below with just one product, and maybe even a low cost product that only generates $20 profit per sale.

The first step is to find an area of interest that has a sufficient number of prospects, our topic for this article. Number 2 is to find a cost effective way to reach out and touch this target group. And the third is to either solve a problem or provide a currently unavailable solution that is attractive to your Niche. But we’ll just stay with number one for this article.

Many people associate the word Niche with small, which depending on your definition of small could be true. But how do you determine just how many searches and corresponding prospects is too small? Therein lies the tricky part. You need enough prospects to make the Niche profitable based on whatever product you plan to offer. The smaller the target group, smaller the number of possible sales.

My most successful method has been by using the same methods I use to determine the profitability of any PPC campaign. Even if you plan to use different ways to market to your prospects, PPC planning can give you some very real numbers to access the possible revenue. You can also use a PPC campaign to test the waters and see what kind of interest there may be in your planned product.

Let’s say your favorite search tool showed that there are 10-12,000 monthly searches on your product area. That may sound like a lot of searches but it may be a little deceptive. Let’s setup a few givens to illustrate our case. Say you have a lot of experience with PPC campaigns so you can write a great ad and produce a good landing page (or web site if you want to go to the direct sell – but most experts don’t recommend that).

So you fire up your account at Google Adwords or Yahoo Search Marketing. You place your ad, put in several groups of 20 keywords then do your estimates to establish that your cost per click is reasonable according to your profit margin.

And your ad is flawless and gets over a 5% click through (5 clicks in 100 views or impressions). Dividing our 12,000 monthly searches into daily searches gives us 400. So you get 20 visitors per day or 600 per month. If your web site conversion rate is also high (since you are an expert), you convert 5% of your visitors to buyers.

That’s 30 buyers per month. Now depending on your click costs (say .30 for this example) you have $180 invested in your marketing (this doesn’t include things like product development, web sites, etc.). 30 sales per month might be good if you make $200 per sale (that’s not impossible – I’ve seen a lot higher). But what if you only make $20 profit per sale? Even with that low of a profit you make $500+ monthly profit.

But unless you have secondary products and a good ongoing marketing method you just hit the wall on possible profits. That’s why you should always approach Niche Marketing as an ongoing business, and not have to worry about the small number of possible sales so much. You know that you will sell additional products and hopefully create an ongoing relationship with your buyers.

You still need enough to break even or make a small profit on your first sale. But if you have a good line of secondary sales items to offer then even a small Niche can turn into great monthly income. So if you use the building a business approach, you can create an ongoing stream of income.

When doing research to find a Niche to market to, make sure you can find or create more than one product and go for establishing a long-term relationship with your prospects and buyers. Even a small Niche can produce great income over the long haul.

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