Are You Ready to Turn Your Hobby into a Business?
So you want to turn your hobby into a business. Maybe you’ve lost your job, you’re seeking a side hustle to supplement your income, or you want to dump your day job in favor of something more fulfilling. You might be ready to take the leap from doing your hobby for fun, to earning some cold hard cash for your efforts. Is it time to take the plunge? Here are five crucial steps to take if you want to turn your hobby into a business.
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1. Outline exactly how you will make money.
Entrepreneur Stephanie Be built a business that allows her to pursue her hobby of traveling the world. First, Stephanie traded corporate America for a gap year of travel. Then she kept on traveling. Now an award-winning professional traveler, Stephanie shares her adventures and lifestyle via Instagram and her blog, TravelBreak. She also earns income from speaking engagements and marketing consultation.
Stephanie said, “The difference between a hobby and a business is monetization. When you understand how to monetize on your hobby, it becomes a business.” She advises asking yourself practical questions before making the leap. “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 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 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. Understand 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 costs, gear purchases and printing expenses. If you’re an artist, you can write off all business-related art supplies. If you’re a caterer, you can write off cooking equipment and ingredients. Depending on your hobby and its business potential, that can mean big savings over the course of a year. Talk to a tax advisor to see how your expenses should be treated.
Of course, 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, then you want to be sure it’s your business that gets sued so you don’t lose your shirt…or your house.
3. Consider how your relationship with your hobby will change.
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 there are demands and deadlines to meet.
Being your own boss is empowering, but it can be stressful, too. It means kicking yourself in the rear when needed. Success or failure will fall entirely on your shoulders. You don’t have to stick to your original plan — all businesses adapt as they grow — but you should only change your business plan if you have a better path in mind.
4. Be honest with yourself.
Determine if you’re willing to make sacrifices to make your business succeed. If, for example, you will be launching a side hustle while keeping your 40-hour-per-week job, and you 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. How do you want to spend them? Giving up Candy Crush and Netflix sounds great on paper, but will you?
To transition from hobbyist to professional, you need to determine how many hours it will take to produce a salable product or service, and build an audience or client base. You may need to work long hours for a long time before you’re able to make a profit. And 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.
“Working for myself, doing the things I love — I couldn’t ask for more,” said Ella Stern, a personal development counselor. “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.”
If you’re serious about turning your hobby into a business, then 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.
5. Plan for set backs.
As the Greek philosopher Heraclitis said, “The only thing that is constant is change.” No matter how hard you work and how smart you are, many things are simply beyond your control. Economic changes, natural disasters, and health crises are just a few obstacles that can throw your business offtrack.
Hedge your bets by building in some safety nets for your business. Brainstorm additional revenue streams so that if one product line is temporarily hindered, you can keep your business afloat. For example, in addition to selling your wares or services, consider teaching your skills in-person or online, speaking about your topic of expertise to businesses or at conferences, or writing a how-to book for sale online. Once you’ve turned your hobby into a business, you might also consider purchasing small business insurance to protect what you’ve built.
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!
Save these tips for turning your hobby into a business!
Whether you’re still mulling it over or you’re ready to start your business, be sure to save these tips to Pinterest via the image above for future reference. We hope you’ll follow Travel Mamas on Pinterest while you’re at it!
Want to learn more? Would-be entrepreneurs like you also enjoy my picks for the best business books for women!
Would you like to turn your hobby into a business? Let us know in the comments below!
These are all great tips, especially the one regarding time and energy. It took quite awhile to build my brand, but I love what I do and I am happy I pushed through the struggle.
Thanks for the affirmation. I don’t want anyone coming away thinking it’s easy. With all the forms and paperwork you need to do, you have to really love your work to get through those!
i’m a DIY lover and i think turning your hobby into a business is a great idea! i would love to do that too!
It can be really beneficial for a DIY-er to turn their hobby into a business, especially if you need to purchase large equipment or rent studio space. Talk to an accountant about what you could deduct as a business. Of course, you need to have income to deduct from in the first place…..
This is fabulous advice. I blogged since 1998 and finally in 2013 turned it in to my business, and haven’t looked back since. Its been the best thing I’ve done in a LONG time!
Yay Jeanine! You’re an inspiration!
turning hobby into business sounds like a lot of fun! i like the idea!
Fun but hard work, too. You have to be ready for the times when it doesn’t feel so much like fun anymore.
I think it is important to really focus on your hobby to see exactly where the money will be generated. Don’t digress into areas that do not bring in income.
It’s not an easy journey but it’s one that’s worth it! Who doesn’t want to earn money from something that they enjoy doing in life. I think these are very good pointers for people who are considering turning their hobbies into a business that they can earn from.
Thanks! That’s what I wanted to get across. It can be great but it’s lots of work, and it’s not for everyone and that’s ok!
There’s really so much to consider! I am teetering on starting my own Etsy shop, but I want to go slow so I can be sure I am doing it the right way so it succeeds.
Smart woman, Theresa! If you plan well now, there will be fewer surprises down the road.
These are some great tips. I know that it was a huge adjustment for me.
Thanks, Meagan! What was the biggest challenge for you?
I don’t really have a hobby that could provide me income, however my best friend does. I can’t wait to show this to her so she can decide if this would work for her or not.
Now that’s called being a supportive friend. Just be sure to be there for her when she’s up to her eyeballs in work!
This is a great trend for everyone. If it is fun, and you can make money, well, how can you beat that combo? I make some money blogging, and I love it!
There is nothing quite like making money doing something you love.
These are great tips for people wanting to learn to do what they love. Any hobby can be a business if you make a business plan and work hard.
Exactly. But you’d be surprised at how many people do not make a plan!
This is a great post. I have been my own boss for quite sometime and the first years were daunting. When things don’t go as planned, there is no one accountable for it except me. However, the good outweighs the bad and I am happy I made the decision to turn my back on the corporate world and start my own business.
Congratulations, Annemarie! Be a boss!
Great advice. Thanks for sharing. I decided to start my own travel agency and now instead of meddling in people’s travel plans, I have the privilege of helping others plan their trips as my job. Wherever there is a need, there is a service to provide.
That’s great, Tonia! I do something similar at All Over the Map Travel. I love helping people take great vacations! And it was the same for me; I was giving people advice on their trips anyway, so the business evolved pretty naturally.
This is such a great resource! My blog is actually the result of turning my passion into a business, and I’m so glad I did. Great, great post.
Congratulations on making the move, Stacie!
I get asked this SO MANY times by people just starting out. I will send them here to read this from now on.
Please do! I love answering these questions!
I am my own boss since February last year. I totally love this free entrepreneur lifestyle, but it’s definitely not a walk in the park. It takes a lot of self discipline and being able to focus and not get distracted. And I most certainly do not work less than before, but sometimes sit into the night. Sometimes I really worry that I will not be able to make ends meet. But it’s still worth it! I grow as a person, I have no one but myself to answer to and no one else to blame or praise. And I can choose to acompany my daughter to the stables in the afternoon and instead work in the evening.
Unless I’m forced to, I will never go back to being an employee.
I feel exactly the same way, Katrin. It’s not easy, but I wouldn’t trade it for working a 9-5 job for someone else. (Unless it paid reeeeeeaaallly well!)
Exactly 🙂 And included at least six weeks paid leave each year!