Turn your Hobby into a Successful Business
Wouldn’t it be great to do your hobby all day long and get paid for it? By definition, a hobby is a regular activity done for enjoyment, typically during one’s leisure time, not professionally and not for pay. Turning your hobby into a successful business can be a tricky endeavor, but being prepared and having a plan can help it go smoothly. You won’t want to make this decision without a lot of consideration and planning. You may be overwhelmed with the risk and work involved in turning what used to be just for fun into a way to actually pay the bills. Asking yourself and answering the following questions can calm your fears and ensure victory when it comes to financial gain.
1. What is my end goal?
You need to ask yourself what you hope to accomplish from turning a hobby into a business. Do you hope to quit your full-time job and make this an exclusive commitment? Are you intending to implement this as a side job to supplement your regular wages? Do you intend to do this seasonally to help out with the extra Christmas expenses? Maybe you are only hoping to cover the expenses related to your hobby so you can continue to do it without cost to yourself. Visualizing and attaining whichever goal you choose is key to your success. Make a plan. Write it down. Follow it. It will become a concrete part of your business plan and a reminder of what you are working toward.
2. What ways could I expand on my hobby to maximize earnings?
You should consider different alternatives to have your hobby bring in additional cash. Let’s say you are an artist and want to sell your paintings. Ponder whether you would enjoy holding art lessons or a framing class. Maybe you could sell painting supplies or sketchbooks in your shop. Or, you could host painting parties for groups that want a night out. Expand on each possibility and increase the potential for financial success. Think of it as a tree branching out in different directions.
3. How much money will I need to have to start up my business?
Knowing how much money you will need to start up your business is important. How will you acquire that money? Will you need to drain your savings, apply for business loans, or go looking for investors? Knowing what materials, location, and employees you will need to assist you and having enough start-up cash to acquire these should be a part of your plan. Advertising can also be a hefty amount depending on your marketing strategy. Thinking about this ahead of time, and planning accordingly, can make all the difference when it comes time to make the leap.
4. Will I enjoy my hobby after I am obligated to do it?
This question is another important one. Is your hobby something you passionately want to do all day? Will the enjoyment still be there if a customer is difficult or there are finances to deal with instead of actively doing the hobby? Will you commit to it and show up every day with the same passion you had for your hobby when it was just that, a hobby? If there are deadlines and people breathing down your neck, will you still be happy pursuing this hobby? The enjoyment of the job is the number one reason for taking this gamble, so being sure it is something you love doing long term is absolutely key to your success. This may be hard to judge as people don’t always know what they are getting into, but knowing how much you love the hobby and want to share it with others is a good indication.
5. Am I good enough?
This is a question most of us ask ourselves frequently. While making sure your hobby is something you love doing is important, making sure you are good enough at it is equally important. If your product is inferior, people won’t want to spend money on your product or service, and you won’t have a chance at a successful endeavor. If you aren’t skilled enough right now, consider putting this risk-off for a time until you can become skilled enough. Practice daily and increase your skills. If you really love your hobby and are passionate about it, time isn’t really a factor. It will still be waiting six months to a year down the road. Perfect your attempts before going all in and a better financial outcome is sure to happen.
6. How should I best market my business?
Make sure you are willing to take the time and do the research on what advertising method is most effective. Social media is a free and extensive method to spread the word about your business. Take advantage of the numerous ways to advertise with little or no cost to yourself. Use sidewalk chalk. Put up flyers. Tell a stranger. Print advertising logos on everything. Shirts, bags, bumper stickers, and pens are all ways to broadcast and flaunt your business name and logo so it is seen by many. There are many options to get yourself known and the more innovative you are, the more people will remember you. While creating a website will have a little bit of a cost initially, it can more than pay for itself in our mostly online shopping society. To ensure financial success, check out what others charge for the same product and plan your price accordingly. Also, make sure what demand there is for your business and future demand, and that it is enough to support your endeavor. Acquire feedback from the public and listen to it. Giving people what they want is a surefire way to make sales.
7. What name, logo and packaging do I want for my business?
This may seem like a silly thing to give much consideration to, but a choice that is distinctive and memorable will stay with people longer than a boring one. You need to choose a name and logo that will stick in people’s minds. You want to be consistent in using the same name and logo that you begin with, so people can connect you to that image. If you start with purple packaging or a red dinosaur, stick with it. That is what people will look for when becoming familiar with you and your business. Choose wisely, as hopefully, you will be looking at it for years to come.
8. How can I get people to try and love my business?
As contrary as it may seem, giving your product or service away for free may, in fact, collect more income. If giving away a complimentary item earns you a good review or testimonial, it will pay for itself with additional customers. If one person tells five, then those five each tell five… you get the idea. Before you know it, word of mouth has spread and there is a demand for your product. People tend to listen to what others tell them and believe them, more than any amount of advertising will convince them. A business can make it or break it with just one disgruntled customer spreading the word. Keeping customers happy is important, and very little makes people happier than getting a product for free. If you can’t bring yourself to give your product away for free, having a sale or maybe samples can be a compromise you are comfortable with. Convincing a friend to host a party to showcase your business would be a way to get the word out to a number of people at once, in a relaxed atmosphere, and they may be more likely to try, and love, your product.
9. Am I willing to hire professionals when they are needed?
As your business grows, you have to ask yourself if you can let go of the reins a little if you become overwhelmed or need advice. You may need an accountant to take care of the financial end of things or maybe a lawyer to draw up the correct contracts and papers. Make sure you can be honest with yourself regarding the need for someone who is proficient at the things you maybe aren’t, to step in and help. Sometimes, admitting we need help is the hardest thing to do. No one wants to fail or admit to weakness, so stepping up and getting a professional’s help can be the difference between a successful venture and a failure. Don’t be surprised to find that as your business grows, so will the number of employees and professionals you need to assist you in your success.
10. Should I set up a separate financial account for the business?
While your instinct may be to keep things simple, if you are really ready to do this, a separate account is a must. Keeping your business finances apart from your personal ones is the only way to know if you are turning a profit and actually making this work. It makes it real. Make sure to incorporate or form an LLC and then get your EIN from the IRS. Keep your books up to date and make sure to pay the bills associated with the business monthly, if possible. There may be some expenses you may not think of that are due annually, such as insurance or income taxes. It will benefit you to stay on top of these, making payments quarterly, if possible, and not being surprised with a lump sum due at tax time.
Deciding whether to turn your hobby into a business is a decision only you can make. Combining skills and passion into a lucrative business that people want to support can be the most rewarding thing there is. It can also be the scariest. It may take time to turn a profit initially, but hang in there, the rewards will come. Studies show that aging adults that are involved in hobbies are much healthier and happier than those that don’t. It could be that participating in your hobby for the better part of the day is just what you need to prosper; mentally, physically, and financially. As the famous quote says, “Find a job you enjoy doing, and you’ll never work a day in your life.”