So you want to turn your hobby into a business. Maybe you're seeking a side hustle to supplement your income, or you want to dump your day job in favor of something more fulfilling. Perhaps you've been told by friends that you could sell those delicious cookies of yours. Or your husband thinks your should start charging for all of those free haircuts for your friends. You might be ready to take the leap from making crafts for fun to selling them on Etsy for cold hard cash. Is it time to put on your big girl pants and turn your hobby into your very own business? Here are four things to consider before making the plunge.
1. Outline exactly how you will make money.
Entrepreneur Stephanie Be built a business that allows her to travel the world. Stephanie traded corporate America for a gap year, but never stopped traveling. Now an award-winning “professional traveler,” Stephanie shares her adventures and lifestyle through photos, stories and snaps on her Instagram account @StephBeTravel and Snapchat. Stephanie said, “I'm a big believer that your career does not define you. You can do things that you enjoy or that are important to you within or outside of your career. However, the difference between a hobby and a business is monetization. When you understand how to monetize on your hobby, it becomes a business.”
Stephanie, who calls herself an “entrepretraveler,” said you need to think very practically about what your business will need to succeed. “How much is it going to cost to sustain your business? How many hours is it going to take to sustain your business? What are your revenue streams? How will they scale? What are you offering that is unique? What problems are you solving?”
Developing a business plan will help you think through these details about your potential business. Not sure where to start? Many cities have Small Business Centers with classes and counselors to help you not only understand your business finances but also they may be able to help you find grants and funding for your small business. Books like Creating a Business Plan for Dummies and The 1-Page Business Plan are great resources for budding entrepreneurs as well.
2. Consider tax benefits and liabilities.
Running your own business means you can deduct your business-related expenses and reduce your tax liability. If you're a photographer, you can write off camera, gear purchases and printing costs. If you're an artist, you can write off all business-related art supplies. If you're a professional traveler like Stephanie, you can write off travel expenses. You get the picture. Depending on your hobby and its business potential, that can mean big savings over the course of a year. Talk to an accountant to see how your expenses should be treated.
Running a business does not come without liabilities. You may want to consult a lawyer about incorporating your business to protect from legal snafus. If, for example, someone becomes ill from a bad batch of your cookies, you want to be sure it's your business that gets sued so you don't lose your shirt…or your house.
3. Being your own boss is boss…sometimes.
There is something deeply satisfying about being your own boss. Turning your hobby into a business is an enticing proposition. You're turning something you already love into a money maker.
Keep in mind, though, that turning a passion into a profession can suck some of the fun from it. Those things you loved to do just for fun can become annoying stressors when someone else is buying them. You suddenly have deadlines for your passion projects; they can't just evolve on their own, unless they can do that on your client's schedule.
Being your own boss means kicking yourself in the rear when needed. Remember that business plan focused on how you are going to make money? Success or failure falls entirely on your shoulders now. You don't have to stick to your original plan – all businesses adapt as they grow – but you should only change it if you have a better path in mind.
Being the boss means working when you don't want to. There's no one else to pick up the slack when you're feeling sick or tired. Of course, once you have the budget for employees, freelancers, or interns, you can delegate to your heart's content.
To keep your passion for your business alive, celebrate your milestones. Every time you reach one of your goals, from your first sale to your first million, look in the mirror and say “I did that! I made that happen! I am the boss of this!”
4. It takes time and energy to turn a hobby into a business.
Consider the time and energy it will take you to create and market your product. We all lead busy lives and it's easy to convince ourselves that we have zero free time. If you have a 40-hour work schedule and sleep about seven hours each night, that leaves 79 hours of free time per week. Even if you add parenting responsibilities, exercise, and housework to the mix, you are still left with hours to fill. But how do you want to spend them? Giving up Candy Crush and Netflix sounds great on paper, but will you? If you're serious about turning your hobby into a business, you should map out exactly how many hours you will devote to your endeavors. For best results, block out chunks of time in your computer calendar or day planner specifically for your business and stick to it.
Working for myself, doing the things I love: I couldn’t ask for more,” said Ella Stern, founder of the personal development website, The Lucky Truth. “My work genuinely doesn’t feel like work because I’m incredibly passionate about what I do. Being your own boss gives you freedom, flexibility and the power to control your finances. But it’s not always an easy ride. Often, you’ll work around the clock and there’s a huge amount of stress and pressure. But I like to think it's worth it.”
Are you ready to turn your hobby into a business?
Only you can decide if you're ready to turn your hobby into a business. Extra cash, being your own boss, and following your passion are quite alluring reasons to become a business owner. Not everyone is cut out to be an entrepreneur, though, and that's just fine. You can have a very satisfying hobby without the stress of running a business. Know yourself, and trust yourself, and take the leap. Or not. It's all up to you!
Would you like to turn your hobby into a business? Let us know in the comments below!