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Hobbies can make for a fun thing to invest in. Depending on what that hobby is, it can be an emotional investment, a monetary one, or both. But what if you could take your favorite hobby and turn it into a money-making business?
Whether your passion is floral design (check out MAK Floral Design) or swimming pools (don’t forget to check out the best pool test kits), there are things that you should know when starting a business. Entrepreneurs need to have specific skills to get off the ground even if they happen to know a lot about the topic at hand.
How to Turn a Hobby into a Business?
- How to Turn a Hobby into a Business?
- 1. Know Your Goals
- 2. How Can You Monetize Your Hobby?
- 3. Estimate Expenses and Set a Budget
- 4. Be Aware of the Downsides
- 5. Don’t Just Quit Your Day Job
- 6. Partnering Up
- 7. A Business Plan is Everything
- 8. Seek Legal Counsel
- 9. Your Brand is Everything
- 10. Don’t Be Afraid to Swallow Your Pride.
- 11. Implement a Business Mindset
- 12. Marketing is Non-Negotiable
- Summing Up
1. Know Your Goals
Far too many people start a business without having a clear goal of what they want to achieve. Are you looking for a little extra cash, or do you want to quit your job and start a full-time business? Starting a business is rarely something you can do as a hobby if you hope to be successful.
By understanding what you hope to achieve, you know just how much work is ahead of you. Some aspects of the business require quite a bit of attention: sales, marketing, inventory, etc. By starting with clear goals, you can start to check those boxes off.
This is a great place to start because it will show you how passionate you are about turning your hobby into a business. If you just can’t seem to get out of the starting blocks, your hobby was meant to stay a hobby.
2. How Can You Monetize Your Hobby?
While you’re considering just what you want out of your business, you can look into all the various ways to make money within that business. Let’s say that your passion is baseball cards. In what realistic ways can you make money with that hobby?
So, while determining your goals in a potential business, you can think of how to make money with that hobby. Perhaps you can buy many cards at a discount and sell them off for a slightly marked up price. Maybe you can buy low on prospects and hope to hit the next big thing. Or maybe you can go the entire way and buy enough stock to open a store.
Thanks to the internet, the research possibilities are endless. Scour forums (Reddit is a great resource), Facebook groups, Google, and social media outlets like Twitter and Instagram. Get as much feedback as you can from people within your targeted industry. This will give you a much better idea of what may or may not be possible.
3. Estimate Expenses and Set a Budget
If you’ve considered how to make money and whether or not your passion can extend to a business, you need to determine what kind of costs you might incur along the way. Every business has its own set of costs, and far too many people start a business without knowing what their budget looks like.
Consider overhead costs like rent, insurance, utilities, etc. that you may need. Think about any manufacturing costs that may be incurred. Consider storage and shipping costs. What about any software that you will need to manage the business?
When you know your budget, you can then start to determine if your soon-to-be-business has the potential to be profitable. And perhaps the most important question: how are you going to pay for this venture? Can you afford the up-front costs? Are there any expenses that may not be necessary that you can trim off to start?
Ask yourself these questions, and you will see the monetary consequences of what you are thinking about doing. Knowing to the best of your ability what’s coming can help you to avoid nasty surprises along the way.
4. Be Aware of the Downsides
While it might seem like a really fun venture to invest in your hobby, there is the potential that a hobby turned full-time job could lead to burnout. You love your hobby because you can work at it when you desire and give it the time you want.
When it becomes a full-time job, other aspects come into play. Dealing with customers and clients, managing the daily operations, creating a marketing plan, establishing and branding your product, etc.
For many, that hobby goes from fun to less enjoyable very quickly. Understand the downsides to your potential business move as well as the upsides. Knowing to the best of your ability what you are getting into can help mitigate those rough days.
5. Don’t Just Quit Your Day Job
Another major mistake that new entrepreneurs make is that they quit their day job to start their business. And while it’s exciting to not only start a new venture but quit a job you may not be fond of, it isn’t exactly the best move in the world.
For one, quitting your job puts pressure on your new venture to become a livable income right away. The fact of the matter is that most businesses take a lot longer to get started and stable than you may have realized. Depending on the hobby, you may also need to get certifications or permits to lengthen the timeline.
It will likely be a lot of work to keep your day job while trying to start a new business, but it is a necessary buffer. Always leave yourself with options whenever possible because far too many new businesses fail, particularly within the first year.
6. Partnering Up
Starting a business is hard enough. Doing so on your own is even tougher. Moreover, there is no way that anyone person will possess all of the knowledge needed to be proficient in every aspect of the business. For that reason, having reliable partners could be invaluable to the success of your business.
Bringing in people who work within your network can be a great way to provide your business with the boost needed to be successful. By surrounding yourself with motivated, like-minded people, you give your business the foundation that much more strength.
Try to build a team that has diverse strengths. Bringing in several people with all the same qualities defeats the purpose and likely won’t do much to help the growth of your new business venture.
7. A Business Plan is Everything
The idea may be the crux of starting a business. The foundation of any sound business is a quality business plan. They aren’t fun, but they are necessary for your business’s long-term growth and success.
Adding as many details as possible will help you create the necessary road map for your business. A quality business plan should include a description of the business, an executive summary, and a management plan for starters.
That business plan needs to include an analysis of the market, sales and marketing strategies, any products or services that will be developed, revenue projections, any funding requests, and anything else that may be relevant to the business.
In short, a business plan helps to forecast the future of your business and mitigate potential surprises. A sound business plan is critical for a successful business.
8. Seek Legal Counsel
It is important to look at all aspects of the business in hopes of being successful. But one of the most crucial steps that most startup businesses don’t consider is the taxation and legal issues that will come up sooner rather than later.
It is a good idea to meet with an attorney even before you begin the business. They will advise you on any contracts or permits and can even advise on certain purchases. Sitting down with a business attorney can help you navigate any local, state, and federal laws that may pertain to your business.
Moreover, a certified public accountant can be invaluable. Someone who understands financial structure can help obtain a loan, bidding on a job, applying for a grant, and any other potentially unique financial situation. This is in tandem with finding people to aid in the business, but with all the unfun legalese.
9. Your Brand is Everything
Building a brand may be the secret to gaining market share. But building a recognizable and effective brand takes a lot of time and a lot of hard work. That work pays off, though, because well-built brands are the ones that not only retain their existing customers but acquire new ones as well. On the journey of turning your hobby into a business, you need to establish yourself or your brand as a pioneer for selling.
A successful brand has a clear message and will address any potential encounter with your customer base. While there is no pleasing everyone, the best brands manage to deliver reliability and customer satisfaction, the entire step of the way.
Most importantly, your brand has to be about quality. Even the best marketing campaigns can’t hide an inferior product or service. Make quality your top priority, and the customers will eventually see that dedication and superior quality.
10. Don’t Be Afraid to Swallow Your Pride.
We all want to start a business from scratch and see it succeed immediately, but that’s just not the way of the world. It could be difficult to land clients or bring in customers initially because no one knows about your business.
Lowering fees and charging less may be an important step to build up your reputation among your target audience. Especially for those who have a skilled hobby that has taken years to develop, it can be a particularly difficult thing to endure.
This is why building social proof is so important. No matter the business, reviews are everything. It is the power of word of mouth but amplified by the internet. Get any reviews that you can, particularly when starting. Those reviews can mean the difference between sales and stagnation.
11. Implement a Business Mindset
You likely started this hobby because you found it to be enjoyable. And while it is important to maintain that joy even after starting a business, you must treat the entire endeavor like a business. That means showing up to work even when you don’t feel like it and being professional even when there are other things you’d rather be doing.
Remember, you want this venture to succeed. Look at it from the perspective of a businessman instead of a hobby enthusiast. It can be the difference between a hobby and a successful full-fledged business.
Another difference to remember is that a hobby has no consequences. A business does. You don’t stand to lose a lot of money out of a hobby; you definitely can start a business. Keep focused on the goal.
12. Marketing is Non-Negotiable
Having experience in marketing is a major plus when starting a business. Even if you have no marketing experience before starting your business, it is never too late to learn as much as possible. After all, marketing your business is probably the single most important thing that you can.
Getting the word out there about your business can be done in so many ways thanks to the internet. Sharing on social media, creating ad campaigns that fit your budget, or cross-branding with others in the industry are great ways to establish your presence in the market.
Start by reading up on how successful small businesses marketed themselves. A website is an absolute must no matter what the business is and can oftentimes be the first impression that a potential customer has when it comes to your business.
Social media is also integral these days. Interacting with potential customers, addressing their concerns in real-time, and establishing a reliable presence can help establish your brand and develop consumer confidence.
These are just a few of the tips necessary to get a business off the ground. There is a lot more that goes into the process, and even then, the sledding is tough. But taking your hobby and making it into a successful business depends on you.