How To Professionalize your Hobby
There are many stories about the growth of baking, knitting, crocheting, carpentry, and gaming groups springing up during the current Covid context. People have looked for and found ways to spend their time at home, the hobby craft industry has grown, and millions out there have pursued their interests and now developed various interesting hobbies during the pandemic.
While many of us have kept our renewed interest in our hobbies casual, there are countless that have gained prominence and several that have become big business over the last few months. There is arguably nothing better than to do what you love and get paid to do it. It is the ultimate business-life-balance dream, and many out there are striving to achieve this balance.
The Basics, Building a Solid Foundation
There are some basics that every hobby turning itself into a business will have to do and that most will do if they are to make the transition into a successful, sustainable business. It is a lot to aim for, but if the idea or hobby is innovative and the business planning and development conducted strategically as set out in this article, you may achieve this for yourself.
The steps that follow can be regarded as the initial steps in the process, and you shouldn’t think about moving onto the next items on the checklist if these basics are not completed. These are the foundations upon which any entrepreneurial business should be based.
Perfect your Hobby
You must be able to repetitively reproduce the product or service on-demand in a professional and precise fashion. This will be the basis of the entire venture, and although the product or service must be useful, you must be able to do it or make it better than your competitors. This entails perfecting your hobby before you professionalize it. If you are making something or providing a particular service, make sure it looks the part, is well packaged, and is something you can proudly share with the wider public.
Do your Preliminary Planning
Is your hobby something that can be turned into a business? No matter how much you love making candles, how great they smell, and that many of your friends have noted they loved getting them for Christmas be realistic about whether this can be a business. Try looking at trends and what is popular in your particular sector or industry, and make sure your products or services are in keeping with what is trendy.
You must complete a full feasibility study to determine if the idea or hobby can indeed be turned into a business. This must include a financial analysis where you will need to examine all the risks that are likely related to the business idea. Be honest with yourself, and if there is no scope for the business in the current climate, then put a pin in it and keep it strictly as a hobby. Not all hobbies are suited to becoming booming online stores, and as such, doing this first step thoroughly could save you a great deal of heartache and financial ruin.
Make Time and Space
Do you have the right amount of space to take the next step, or will your new business fit into the same space that your hobby did? A lot of startups that emerged in garages or the spare room soon realize that the rental required to turn the hobby into a leading business can destroy profits and sink the business. You will need to consider the nature of the business; you need enough space for your operation and amenities for employees. A cluttered working space is inefficient and will cost you money.
You may not need extra space immediately, but it is something to think about if your new business starts to grow. The location will also be important as if you choose the perfect internal space in the middle of nowhere, your transport costs will only spiral upwards. You must plan for the right space in the right place and work this into your initial costs.
In a similar vein, if you do not have the time available to source raw materials, make, market, and sell your product or service, then you either need to consider hiring staff or rethinking the idea. This is particularly important at the beginning of the venture as you will need to spend time making the products and researching markets, thinking about branding, marketing, and making sure you start building networks and a customer base.
Keep in mind that changing your business into a hobby will require you to be available full time, have the available space for an office, a workshop, and meet customers and clients.
You don’t need to start your new business alone and should strongly consider looking for places and people who can offer some words of wisdom. Business advice is available from the various business chambers out there and online forums. Various government organizations provide free business advice, and you should make use of this. Many have had similar ideas and thoughts of starting a business, doing your research, and learning from others’ mistakes before you make your own. You can never get too much advice.
Find a Business Mentor
This is primarily about establishing a useable support system. There are going to be difficult times and issues that seem insurmountable. Having a credible business mentor can go a long way to opening doors and getting ongoing advice as you start the business journey. Several entrepreneur groupings offer such mentoring, and again, it would do well to start by looking for such support and signing up. Join groups online and engage with people to home your idea.
Once you have done these basics, built a foundation, and determined that your idea has scope for expansion and further development.
Business Skills for the Initial Startup
As soon as you start trading and bring in any money, it’s best to have the requisite business skills to deal with this. There are many different things to think about once your hobby starts to make money. Starting with the wrong business systems and processes can have a detrimental effect on your startup. If you have no business skills, it may be worth having a professional consultant oversee and advise on the legal requirements for starting a business in your State. This is not a sustainable process or expense for most small businesses, and it is generally advised to only use a consultant for specific issues such as tax and finance, working towards performing these functions in-house once the business is up and running.
Another option would be to invest in your own business skills rather than spending money on outside consultants. Online courses and learning are excellent options for building the skills needed to look after the business side of a profitable hobby. This will require a good personal or personnel development plan, depending on whether you have additional staff working for the enterprise or not.
Business Skills for Sustainability
There is a myriad of ways to build up the skills that you will need to make your hobby a sustainable business. From short courses to professional online MBA programs, all learning can be conducted online will allow you and your staff to train in areas relevant to the business. If you plan for the hobby to be a long-term business initiative, you will need specific financial and management skills to develop and maintain the business.
As aforementioned, knowing the fine art and specific skills required to make the product or deliver the bespoke service will be enough to get the business going. However, for a sustainable business, you must develop business, financial, marketing, and a range of networking skills in-house. Plan for this and institute a clear personal and business learning plan.
It is public knowledge in the business startup field that developing a business will require immense amounts of hard work and commitment. Many small businesses will fail in their first year, some because the hobby just didn’t sell, others because there was no understanding of business principles of profits and losses; however, the worst reason for startup failure is lack of commitment. For funders, consumers, and clients to buy into your business, you need to show commitment and utmost belief in the business yourself. Commitment is quite different from just being interested, and it is easy to be interested in the process of making your hobby a business when it is new and exciting, but the true mark of a successful entrepreneur will be their commitment to the plan when the excitement wanes, and the startup is no longer new. Interest in the hobby is what will get you going; commitment will keep you going.
This is an ongoing process and will require long hours of work, more dedication to the business, and increased funding.
Most emerging businesses will require funding of some form. You need to be incredibly careful about the type and nature of the funding you use for the business startup. Many startups do not live to regret the wrong choice of funders.
The best advice for those starting an enterprise is to spend some time looking for grant funding. The government and several states have set up small business grants, which in essence are free money. There may be a number of related restrictions on how you can use the money, but it will not need to be paid back. The main type of grant funding is for business startup or expansion, and as such, all those looking to start a business should begin by researching the area of grant funding. Start by looking locally in your state and then further afield. The internet will be the main source of information, and although this may take some time, finding the right funding that may cost you nothing and leave you in full control of the business is worth it. Both government and private company grants exist, and the main issue will be finding a grant that suits your business.
The other option is to go big and look for private equity funding but be prepared to give up some of the business that you intend to build. This is where a private company or individual will invest in your business, typically for an ownership stake. It is a form of funding that will require long hours spent gaining access to present and sell the business idea. And although mainly used for established and mature businesses, if your hobby/business idea is good enough and well thought out and marketed, then you too may be able to use this form of finance. Selling shares to fundraise or to take out a business loan are the last steps in the funding search as both these options will necessitate a payback.
It may be worth ensuring that you have the in-house financial and business skills in place before you look for large amounts of startup funding to be best placed to manage this process and keep control of the business.
Final Guiding Remarks
Work your way through the foundational aspects of the business building mentioned herein. Focus on those aspects that will enhance sustainability and longevity, such as your business skills, commitment, and funding. If all these are done in the order as suggested, you will be well on your way to developing a successful enterprise from your hobby.
The main point to remember throughout this process is to keep the love and enjoyment that you have from the hobby, remembering why you started it, and in doing so, create provenance and a genuine backstory for your future business success.