Posts Tagged ‘hobby to business’

This is the last of a two part series on how to turn a hobby into a small business. Sometimes people with great hobby do not have the right amount of business acumen to run a business. Everyone has good ideas — it is the business of running a business that gets some people in trouble.

Here are seven questions that one should consider before diving head first into entrepreneurship.

1. How committed are you to being a business owner? Successful small business owners are fully committed to their businesses. Are you the type of person who has lots of interests? Do you have lots of unfinished hobby projects around the house? Would you be easily distracted by the next business idea that you dream up? Successful entrepreneurs are disciplined.

2. Do you have a competitive attitude? Are you willing to charge people enough to make money from your products? Many people with hobbies have been giving away their homemade goods as gifts and presents for years. You must really change your mind set to turn into a real business person. No more hook-ups, friend discounts or freebies.

3. Are you a glass half full or half empty kind of person? Your business will live or die based on your own personal optimism. Most successful entrepreneurs are optimistic people. Can you see a positive opportunity or lesson in an otherwise challenging situation? When you don’t have optimism in your business, it is very difficult to sell to anyone or motivate employees. Most of all it is difficult to run a small business; you need optimism to survive the lean times.

4. How big of a business do you want to run? When you start a business, you also need to know in the beginning how much responsibility you are really trying to take on. It is also important to always know how much money you need to make to be happy.  Do you want to make enough money to pay your bills and go on a few nice vacations per year, or do you want to buy your own island? Do you want one great restaurant or a regional chain of pizza shops? Do you want your product sold in high-end boutiques or at Wal-Mart?  These are all decisions to be made up front as you are starting your business.

5. Do you like to make decisions? One of the main differences between having a hobby and running a small business is making critical decisions with financial implications. In business there are many roles you will need to take on. The average business owner does 10-13 jobs starting out. Will your accountant do payroll or will you use a service? Will you hire employees or make everyone a 1099 virtual employee.  Will you hire a booker to source a foreign manufacturer or run a local manufacturing operation that will great increase your cost per unit.  Will you be a home-based internet business or have a retail storefront?

6. Do you have the money to start a business? Once you’ve written a marketing plan and then a business plan, you will know if there’s a market for your hobby to become a profitable small business. The next step is to start saving to finance the launch of your new business.  Will you start with product or will you need to develop a few more to generate the money that you need to sustain the business. You should not quit your day job until you have sufficient money to fund your business plan and your household. In fact, there are three pools of money you should have in place before you start your business full-time. 

A) You need emergency savings for your household.

B) You need enough money to go up to two years without a paycheck.

C) You need the first year of operating expenses for your business.

Start saving 20-40% of every paycheck to save the money you need to become your own boss. Often, things do not work out exactly according to your business plan. These pools of money will be your contingency plan to ensure that the business and your family financially survive your small business endeavor.

7. Do you like to sell? As an entrepreneur YOU are the chief sales officer. You must be the best sales person in your company.  Not only do you sell your products–you also sell your vision for the company and most importantly you sell yourself.  And you will need to sell every where you go, and make sure that those close to you know what you do. If you love selling, entrepreneurship really could be for you.

If you didn’t have strong answers to most of the questions you might need to plan a little more or consider getting a business partner to help you make your business plan a reality.  The key is being honest with yourself about what skills you have and need to turn your hobby into a full-time business.

What other questions do you think a person with a hobby should ask themselves before making their entrepreneurial dreams a business reality?

WANT TO USE THIS ARTICLE IN YOUR EZINE, E-NEWSLETTER OR WEB SITE? You may, as long as you include this complete blurb with it:

For more tips on how start or grow your small business subscribe to Melinda Emerson’s blog www.succeedasyourownboss.com.

Melinda Emerson, known to many as “SmallBizLady,” is a Veteran Entrepreneur, Small Business Coach and Social Media Strategist who hosts #SmallBizChat weekly on Twitter for emerging entrepreneurs.  #Smallbizchat is the trusted resource on Twitter to discuss everything entrepreneurs need to know about launching and running a profitable small business. Her first book Become Your Own Boss in 12 Months was released in March 2010.

This is the first of a two part blog series on how to turn a hobby into a small business.

Hobbies are fun personal interests that people pursue out of love. Some use hobbies to spend quality time with loved ones, friends or themselves. Some people use hobbies to relax. Popular hobbies including scrap booking, fishing, quilting or writing. Some people make scarves, bake cakes, party favors or frame special mementoes. If you are someone who has a hobby that people line up for—you could be on to a profitable business idea. It’s ideal to do something you love to do and get paid for it. But there is a big difference between making some extra pocket change at holiday time and running a business full-time. Here are some tips on how to turn a hobby into a small business.

There are many ways to turn a hobby into a business.

You can sell products, but don’t forget that you can also sell information as a business model. If you like collecting coupons — you could create a subscription service to notify people of the best supersaver deals each week. If you like baking, you could start selling brownies and pies or you could create a membership website for recipes for homemade baked goods that are for people with food allergies that are wheat/gluten free. Now the greater your production demands eventually you’ll need access to a commercial kitchen—but some economic development agencies across the country are creating food incubators for this very reason. If you enjoy making jewelry, why not sell your products via an online store, rather selling through the typical route of women’s conferences, craft fairs or boutiques.  All these pastimes can be turned into lucrative businesses.

Freelancing is a great way to transition your hobby into a full-time business.  I recently conducted an interview on #Smallbizchat with Pete Savage, the co-author of The Wealthy Freelancer. He’s got great insight into starting slow and building strong. Here are six additional steps that you should take if you want to start a full-time business. 

Be Honest With Yourself. Do you have the energy and stamina to crank out your hobby in volume enough to make it a viable business? Make sure you don’t ruin something that brings you joy. People pursue hobbies to blow off steam.  If you add a lot of pressure—you could blow your stack. Do your research to make sure there’s a paying customer before you bet the farm on your hobby. Successful businesses require dedicated work and responsibility. It’s easy to take the fun out of your hobby if you do not plan well.

Use Low Cost Business Resources. Once you decide that starting a business is for you, there are many books that you can read to develop your plan including my new book Become Your Own Boss in 12 Months. This book gives a comprehensive look at starting a business. It takes you month-by-month through a planning system to help you transition from having a job to starting a business. You should also make an appointment with your local Small Business Development Center and sign up for a business planning course or SCORE chapter which can provide online and face-to-face counseling.

Check Out Your Local Library. You can get plenty of market research data help from the business librarian at your local branch. Also, find out information on legal entities, sales taxes, business insurance and small business accounting systems.  There is also opportunity to learn about any business licenses or regulations that you will need to comply with to start your business.

Start While You Are Still Working a Job. There are two reasons why this is a good idea.

You need to save a significant amount of money before you leave your job to become an entrepreneur—so it’s best to keep the paychecks rolling in as long as possible.

Your job is one of the best sources for a customer base, particularly if your hobby has nothing to do with your day job.

Update Your Contacts And Skills. Start networking externally. Reach out to all your contacts and make sure you have your contact database on a flash drive that you keep at home. Learn the latest social networking sites and how to write press releases. Use your down time to do internet research for sourcing vendors and suppliers and to confirm your target market.

Figure Out How to Stand Out.  It is very difficult for small businesses to compete on price. You must clearly identify your niche customer and spend some time developing a signature product or signature services.  Anyone will buy something once.  How will you get them to buy it over and over again from you?

Turning your hobby into a full-time business is a great way to become your own boss. Why not work at something you love – and earn a living from it?  Do your research before you start your business. You’ll need a lot more customers than the 30 people that buy cakes from you every holiday to replace your full-time salary. Make sure there’s viable market for your goods and services, and start saving money at least 12 months before you start your business.

Next Week:  7 Questions Hobbyists Should Consider When Starting a Small Business

WANT TO USE THIS ARTICLE IN YOUR EZINE, E-NEWSLETTER OR WEB SITE? You may, as long as you include this complete blurb with it:

For more tips on how start or grow your small business subscribe to Melinda Emerson’s blog www.succeedasyourownboss.com.

Melinda Emerson, known to many as “SmallBizLady,” is a Veteran Entrepreneur, Small Business Coach and Social Media Strategist who hosts #SmallBizChat weekly on Twitter for emerging entrepreneurs.  #Smallbizchat is the trusted resource on Twitter to discuss everything entrepreneurs need to know about launching and running a profitable small business. Her first book Become Your Own Boss in 12 Months was released in March 2010.