Is it Time to Turn that Hobby into a Business?
Thinking about turning your hobby into a viable company? Before you pull the trigger on turning your passion into profit you ought to ask yourself a few questions first. Here is where I would start:
First and foremost, 1) Will this new business take the fun out of your hobby? Money is important, but so is sanity. If your hobby gives you peace and stress relief, will it still do the same if your new operation requires that you do it day in and day out? I have heard stories of both scenarios. One man I once met told me that he truly loved working in his hobby because he couldn’t get enough of it. Another young lady once told me that her love for her hobby was destroyed once she was forced to do it 50 hours per week. This is something you should really dwell on before pulling the trigger.
Another very important question to mull over is 2) Is there a market for your skill-set/product? Nothing is worse than doing all the work and spending all the time, love, and money to get your business started then realizing there is very little demand for your product. This is why I always advise folks to bootstrap their startup, even if you are confident on future demand. There are circumstances where going to a bank and borrowing a large sum of startup cash would be required. But I implore anyone reading this to be as frugal as possible. Be budget minded!
Before you take the plunge, 3) Have you given your skill-set a thorough and realistic evaluation? We all know that when starting a small business that you should do a careful competitive analysis… But how about starting with yourself first? Are your skills good enough to compete in your niche market with your competitors? Are you skill-sets honed enough to satisfy all your customers? Some good introspection will do wonders. At the very least you can list and prioritize what skills you may need more practice or training on in the future.
Now lets get to the nitty gritty…
- How easily can you handle growth within your operation? Do you need to hire help?
- Can you separate yourself and your product from your competition(s)?
- Are your goals realistic? If not make them such.
- Prepare for many other duties as a business owner: Accounting, Marketing, Sales, etc
- Have you tested the waters before quiting your job and investing your savings?
- Do you have the start up capital? Resist the temptation to ask for a huge loan.
- Have you picked a good company name?
- Have you developed a production strategy?
- Have you developed a marketing strategy?
- Have you developed a distribution strategy?
- Do thorough research on what tools will help you save time, money, and headache! There are an abundance of free programs out there to help you manage finances, market online, and manage your business.
- Don’t get discouraged when you face adversity. Don’t panic if you aren’t successful right out of the gate. Small businesses take time and patience.
- Are you official? – Licenses, permits, incorporation docs?
- Get organized: save all receipts and keep accurate books
- Get disciplined: make sure you can juggle all the tasks required
Am I missing anything important? Share below in the comments section.
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Image Credit: The Commons