There is growing number of instability in the labor market, an employee can no longer expect to remain with the same company for a career, enjoy all kinds of excellent benefits, and retire with a nice pension. This decline in employment stability leads many to ponder how to turn a hobby into a successful business.
The good news is, the time has never been better, thanks to the internet and related technology,
Factors to Consider In Turning Your Hobby Into A Business
Thinking about turning your passion into a paying gig? These steps will help you avoid some common mistakes as you set out to turn your hobby into a business.
How do you show that a hobby is now a business?
The best bet is to procure the things associated with business: a separate checking account and phone line, business cards, and appropriate licenses are a good start. A well-conceived and written business plan help also.
Drafting a simple one-page business plan before early on is a great way to help you think through and evaluate your idea, step by step, as you set goals and identify strategies to achieve them.
Business planning may seem like a lot of work for a small part-time business venture, but unless you have a plan, you may not know when you’ve achieved your benchmark for success.
Do you have what it takes?
This is the time to sit down and do some serious thinking. Have ever considered the fact that running a business might not be ideal for everyone?
Unless you’ve run a business before, it’s easy to get carried away with the idea of how wonderful it will be to get paid for doing what you love.
But, you need to consider the fact that the stress of needing to earn an income from your hobby can quickly take all the pleasure out of it.
Running a successful business isn’t all hobby indulgence. Look forward to spending a lot of hours on essential tasks completely unrelated to your true passion, except you can meet the expense of employing someone to take care of the bookkeeping, marketing and sales.
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The following are the steps for turning a hobby into a business.
1. Have a Plan, Strategy, and Define Goals
The first consideration is the different ways to extract money from your hobby. This stage calls for a serious brainstorming. The question is; will people pay you for your great idea. For instance, if you love to bake, who will buy your home baked cakes, custom French bakes, or baking e-books?
One of the biggest mistakes home-based solopreneurs make is not doing their market research.
Ask yourself; who are your competitors and what do they offer? What can you do that delivers value and targets an unfilled niche in the market?
You need to work out how to either do something different or do it better. During this strategy brainstorming phase, other factors to consider are finances and what goals (short and long-term) to set. When it comes to establishing these goals, try a SMART approach and make them Specific, Measurable, Attainable, Realistic, and Timely.
As a pro tip, focus your efforts on a niche that isn’t currently being filled to increase your chances of success. You’ll minimize the competition and cut out unprofitable possibilities by creating a must-have solution designed for a highly specific customer.
2. Pick a Name and Place
Choosing a name for your business is one of the most enjoyable tasks for a newbie but not really for pros who know the consequences of having the wrong name.
Without a great name, you’re dead in the water. Not only does it need to be dynamic, explanatory, and easy to remember, do your due diligence to make sure it isn’t already in use. Most state government websites have a searchable online business name database.
Once you settle on the perfect name, your next stop should be the Copyright Office’s website to trademark it. A name worth having is worth protecting from competitor encroachment.
After choosing a name for your business; then the considerations of the location for your new business. Is it going to be home-based or you will have to acquire a new place for it? If it’s home-based, where in your house will you conduct business activities?
You should set aside a room or space solely dedicated to this. Perhaps the best part about starting a home-based business is how cheaply and quickly you can get up and running.
For those with limited finances, saving the expenses of a storefront is the only thing that makes turning a hobby into a business feasible at all.
3. Formalize your hobby as a business
One of the first decisions you face in turning a hobby into a business is which type of business structure to choose. The business structure here means the legal form your business takes such as sole Trader, an ordinary partnership, limited company, limited liability partnership etc.
While many people select to start as a sole proprietor, you might decide that forming a partnership or incorporating as a C-Corp, S-Corp, or LLC better suits your situation.
Consulting a legal or tax professional is a great idea if there is anything that is unclear to you. This step, along with obtaining a Federal Tax ID Number, opening a business checking account and securing the necessary licenses (usually city and county) and permits allow you to demonstrate to the IRS your sincere intention of turning a profit.
4. Leverage the power of networking and build an online presence
Having online presence is a crucial step in turning your hobby into a business. Even if your new business is a local plumbing service, a website and social media presence are essential for any small business.
There’s no escaping the fact that, even for local businesses, the internet is where people go in today’s world to find information about products and services.
Consider craft fairs and trade shows, sponsoring a community event, joining a local business association, or partnering up with a compatible business as low-cost ways to get the word out.
This is how you establish a public face to show to the world, build a customer base, and create a recognizable brand. Don’t overlook the power of networking as you go through this process. The old saying that it’s not what you know but who you know that makes the difference hasn’t changed.
Put yourself out there.
You never know what you’ll get in return that might help your business.
5. Treat it like any other job
Perhaps the most significant difference between a hobby and a job is that the latter requires constant focus and dedication in order to provide a meaningful income. Presuming you like to afford regular meals and pay for that roof over your head, this needs to be a serious effort.
Don’t just treat it like a job. It is your livelihood.
Which means you don’t just show up, put in your time, and not think about it again until the next day. As an entrepreneur, it behooves you to put in the time in the evening if necessary to study the market in order to create new products and services that will turn a new business into a profitable and long-lasting business.
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Wrap It Up!
What healthier choice in life could a person make than to turn something you love to go into a way to generate a full-time income? If turning your hobby into a business seems right for you, test the waters for six months to a year before diving in.
Running a small, no-pressure side business at first will show you whether your idea has the potential to become a sustainable full-time business – before you quit your day job and invest all your savings.
The previous steps are designed to help generate a full-time income from your hobby. Follow each in turn, and you could be living the dream sooner than you think. Good luck!
Over To You
So, what are the other advice, tips, strategies, techniques or methods that have worked for you? Please share with us in the comment below. Believe me; I sincerely value your opinion more than mine.