Turn Your Hobby into a Home Business
6 Steps to Making Money from Your Hobby
When it comes to working, most people think about drab jobs to pay the bills. But one of the benefits to owning a home business is being able to create a career you enjoy. Do you like cooking? Start a home-based catering business. Do you enjoy photography? Start a home-based photography business. Like to travel? Start a travel agency or a travel blog.
Turning a hobby into a business can shorten the learning curve on how to run a business if you’re already proficient at doing the hobby. Plus, if people already know about your hobby, you can get clients/customers that much faster.
Here are the steps to turning your hobby into a home business:
Decide If Turning Your Hobby into Your Job Will Ruin the Fun
Part of the benefits of having hobbies isn’t just fun, but the satisfaction and relaxation that comes with it. Hobbies are a great way to take a break from the rigors of work and nurture your soul. When you turn a hobby into a home business, it changes the focus from fun to financial necessity, which can lead to less enjoyment of your hobby. Assess what it would be like to do your hobby all the time as a way to pay the rent and decide if you want to put the hobby in a position of “must do.”
Determine If There Is a Market for Your Business
Your friends and family may praise your homemade cookies, soaps, or jewelry, but will they pay money for it? Not long ago there was a reality show about saving a bakery where the baker loved baking and her “friends and family” said she baked great goodies, but the expert baker suggested that the baking wasn’t up to professional standards. When doing market research, your goal is to discover if people are willing to pay for what YOU offer specifically, not what they’d pay for the product or service in general. That means your products or service need to be professional quality.
Take Your Hobby Home Business on a Test Drive
You’re allowed to earn money from your hobby without forming a formal business, which means you can test it out before fully committing to it. You can start part-time, running the business around your job. Testing your business will allow you to work through issues and determine if it’s something you want to pursue full-time.
Make a Plan
If you decide to move forward, create a business plan that outlines where your business is now and the goals you want to achieve. Don’t skip this step thinking you already know your hobby or you’re already building it part-time. Taking your business to the next level requires assessment and planning.
Make it Legal
The IRS allows business tax deductions if you can prove what you do is a business and not a hobby. One of the factors IRS considers is whether or not you’ve formally created your business. That starts by determining your business structure, such as sole proprietorship or LLC. Regardless of your business structure, you need to open a separate business bank account and do activities, such as marketing, that show intent to be a business.
Market, Market, Market
It’s one thing to make a few sales from family or friends, it’s another to make a living selling to the public. The secret to home business success, besides offering a great product or service, is marketing. People can’t buy from you if they don’t know about you.
Marketing activities should be a part of your everyday business operation. Create a marketing plan that outlines who your optimal customers are, where they can be found, and how you can attract them to your business.
Turning your hobby into a business is a great way to make money doing something you love. But even if you’re doing it for fun, if you plan to make a living, you need to treat your venture as a professional business.