Is Your Favorite Hobby Business Worthy?
Have you ever thought, in the midst of your favorite pastime, “If only I could get paid to do this!”? Well, for many hobbyists, that becomes a reality when they decide to turn their hobby into a business.
What Hobby is Business Worthy?
When I was in middle school I loved making jewelry– to the extent that I created a business selling my products at local craft fairs. It was a basic form of entrepreneurship, after all, I was only 10, but the starting principles hold true for turning your hobby into a profitable business. Whether your dream is to open a bakery to sell your homemade desserts, or sell wooden crafts online, you need to take a step back from your passion in order to decide whether it is simply a passion, or something you can make money from.
Finding your Niche
You have to be honest with yourself. Are you good enough that people will pay money for your service or product? If the answer is yes, then think about the other competitors in the field. You have to be able to compete with them, and if you have comparable skills, you need to be able to stand out in order to attract customers. Finding a niche in the industry and maximizing that is a stronger way to attract and build clientele than simply undercutting your competitors’ prices—which may end up hurting you in the long run.
Once you’ve decided that your talent or skill can fill a void in the market and attract customers, you need to figure out if your hobby can earn you a reasonable profit. If you’re looking to simply use your hobby as a part-time, leisurely business as a supplement to your day job, then there is much less risk involved. Regardless of whether you want to make your hobby a part-time or full-time business, you can roughly calculate your profit by adding all your expenses (including intangibles, like the time you spend on the product or service) and coming up with a price. Also take into account your start up and working capital, meaning the amount of money it takes to launch and maintain your business.
If you think people are willing to pay that price, then I would advise trying out your hobby as a part time business to see how successful it is, and what you can improve upon or change, before quitting your day job. Diligently tracking your costs, methods, and customer demographics will help you make strategic decisions when taking the next step with your business.
Great Tips to Help you Succeed
If you do decide to give entrepreneurship a try, keep in mind these tips:
→ Naming your business. This is an extremely important task. Choose a name that is memorable and indicates the type of product or service you are selling. “Jo’s Joy” might be catchy, but no one will know that you are trying to sell jewelry, thus “Jo’s Jewels” is a stronger business name.
→ When naming your business, make sure that the URL for that name is available. Every business needs a website these days, and you don’t want to confuse customers by directing them to a website that differs from the name of your company.
→ Location, location, location! Know who your customers are and where they are coming from, then think about how you will sell your product or service to them. Will you stick to local craft fairs, sell products online, or lease a space to open up a shop?
→ Think about how you will attract your clientele. A great way for new businesses to get their name out there is through a social media profile. Make a Twitter account and Facebook page for your company, and register on related online directories to increase your web presence. Consider offering start up promos and deals to get people in your doors (or on your website)! To read more about creating an online presence, see our web presence blog.
One last thing…
Are you disciplined enough to keep at it when your hobby begins to feel like work? It is very important that you recognize that at times, your hobby may feel more like work than fun. I wasn’t willing to invest the time and money into my jewelry business, so I ended it. But if you have the market, the drive, and the ability to start a business out of your hobby, then go for it!
For additional advice and personal help launching a business out of your hobby, consider talking to a one of our specialist or visit us Here!
