A hobby can often seem like a natural path to small business. You love your hobby, and you probably know enough about it that you could chat about your hobby for days. You’ve received compliments for your work. Could making money from your hobby be your next step?
Not so fast! Turning a hobby into a business involves more than simply spending more time creating your product or service. Without research, planning, and help from seasoned experts before launching your business, you could find yourself resenting the hobby you once loved.
Before you expand your hobby into a full-time small business, think about these three questions.
1. Can you channel your hobby into profits?
It’s not enough to be passionate about your hobby. You’ve got to know how to turn your skills into a consistent revenue generator. If you have small business experience, you may feel comfortable examining essential business calculations like cost of goods sold, profit and loss, and cash flow. If these terms sound foreign to you, start reading before you start printing price tags.
The Simple Steps for Starting Your Business online workshop series offers an overview of the business startup process in five short modules. There’s even a free downloadable workbook to help you organize your thoughts and plans as you learn about potential paths for your hobby.
2. Is there a viable market?
Inquiries from family and friends can indicate that your hobby product or service could become a full-fledged business. But before you embark on the journey, take a look at your competition. Who’s doing similar work in your city or town? Is the web saturated with products that look just like yours?
If your friends and family have shown interest in your hobby, use them as a research group. “Engage family, friends and potential customers to provide critical feedback about your product,” SCORE mentor Nancy Strojny recommends. “Ask what they like most about your product, how it helps them solve a problem, and what they might pay for this product.”
Their answers can help you determine whether your hobby is ready to grow into a business, or whether it’s better suited for a part-time venture. Strojny recommends asking at least 25 people this same set of questions.
You may also want to consult trend-tracking services, which can help you learn more about buying patterns, along with key demographics for different products and services.
3. Can you separate the business from the personal?
Sharing something you’re passionate about with the public is exciting! But it can also come with negative feedback. Think about how you react when receiving compliments or criticism related to your hobby. How will you feel if you’re ever faced with a bad Yelp review, or encounter a customer who just won’t stop emailing you until they get a refund?
Negative feedback can dampen your drive, making it harder to focus on building your company. It takes internal strength to overcome the challenges of starting your business.
Do you have a great idea for a hobby-turned-business? Take your idea to a SCORE mentor to start planning for success.