If you're like most people, you have a hobby – something creative and satisfying that you do simply because you enjoy doing it. You may have even thought of turning your hobby into a business. It sure is tempting; After all, who wouldn't want to be paid all day long to bake cookies or write? But as fun as it sounds, turning your hobby into a profitable business isn't easy. Let's take a look at what you need to do to get started.
1. Are you looking for “why”
Your first step is to figure out why you want to turn your hobby into a business. Want to earn some extra cash while still having a job? Are you a stay at home mom or retiree who needs a different income stream? Is your goal to start a business that will eventually lead to a full-time income? Everyone has a different reason for wanting to become an entrepreneur. It's important to be honest with yourself about why you want to turn your hobby into a business. If you can't identify your "why," you may end up feeling unfulfilled and unhappy because your deepest needs are not being met. For example, are you bored and just want some excitement in your life? Do you feel like your career is coming to a dead end and want to try something new? Do you just need some extra money? Analyze your wants and needs, as well as the potential of this business idea and how it could fit into your life.
2. Be prepared to hate it at times
It won't always be fun. Do you love this hobby enough to do it every day? Can you do it under the pressure of deadlines and financial consequences, like not being able to pay your utility bill tomorrow if you don't bake those cupcakes tonight? There's a real possibility it won't be as relaxing as it is now if you just do it in your spare time. After months or even years of doing it every day, you might not even enjoy it anymore. Are you willing to take that risk?
3. Define success
Everyone has a different idea of what "success" looks like to them. For one person, it could be a business generating six-figure income. For someone else, it could be a business that allows them to do what they love and have the flexibility to have more free time. Take the time to determine what success means to you. What would make you feel like your business is a success? What does a successful day look like? Defining your idea of success will help you stay grounded when working on the more tedious aspects of your business. It will also help you keep in mind what you are ultimately working towards.
4. Look at your finances
You need to take an honest look at your financial situation for a few reasons. First, every business needs some startup capital. You may already have many of the materials you need as this is your hobby and you have probably been doing this for years. But chances are you don't have everything you need to turn that hobby into a financially sound business. You will also be faced with additional costs that you do not currently have, such as marketing expenses. So it is essential to have enough money in your savings account to invest in this business idea.
If you don't have enough money in your savings account right now, put all your energy into building it up. Learn how to save money. If you are in debt, you should pay off your debt first and then focus on saving money. Set aside enough to live on for six to 12 months. Meanwhile, you can still work on your business. Use this time to write a business plan, conduct market research and acquire the skills you need as a self-employed person.
5. Research your market
Before investing money in your business idea, find out if there is even a market for what you want to offer. Conducting market research means answering some critical questions:
* Is there a demand for this product or service?
* How big is this potential market? How many people might want what I'm offering?
* Who are these people? What is their income and education level? Where do they live?
* How many other companies offer what I want to offer?
* Are those companies good or not?
* What do people pay for comparable products or services? Can I afford to offer my product or service at competitive prices? If not, how can I differentiate my product or service so that customers don't mind paying more?
6. Perform a break-even analysis
Many new entrepreneurs are too optimistic and think they can make a profit within the first two months. In reality, it can take six months or more. Can you and your company survive that long without making a profit? Without proper planning, the answer is probably no. A break-even analysis helps you estimate your start-up costs, as well as your normal operating costs, and compare them to your projected earnings, so you can see how long it will take to break even in your business. /P>
This is a valuable analysis that should be done before investing any money in your business as it can help you determine if the business is worth pursuing right now. You can also use this information to adjust your strategy and increase your chances of success. For example, if you determine that it takes six to eight months to break even, you may decide to work longer to build your savings while starting your business on the side.
7. Brainstorm possible revenue streams
Remember that it takes time for your business to start turning a profit, so you need to think about different ways to increase your revenue. The more income streams you have, the more you increase your chance of success. There are several ways to do this when starting a hobby-oriented business.
Let's say you want to turn your love of gardening into a business. Your primary business will be as a consultant helping other people start and maintain an organic garden. But how else can you make money from this business idea? You can:
* Start an organic gardening blog and make money selling advertising revenue.
* Write a gardening ebook, which will also improve your reputation.
* Sell organic produce or vegetables from your own garden at local farmers' markets, allowing you to network with other gardeners and potential customers.
* Hold classes to teach larger groups how to build and maintain an organic garden.
8. Generate positive word of mouth
Positive word of mouth helps you get traction. This means that in the beginning you may have to offer your product or service for free in exchange for some honest reviews on Google, Facebook or other review site. Create social media accounts on Facebook, Instagram, Twitter and Pinterest so people can share what they like about your product. Make sure you're registered with Google so people can find you on Google Maps and post photos and reviews of your business. Once your social media accounts are up and running, ask every customer to rate you online. Explain that you are a new business and that their feedback is a valuable tool to help you improve. You might be surprised how many people leave a review if you ask.