How to turn a hobby into a successful business
Let’s imagine a world where we all earned our living from jobs we enjoyed doing. Sounds like utopia, right? Well, for some of us, this is a real-life scenario. The successful business we established had been set up on the foundations of a dear hobby. Time spent on activities we’re passionate about fills us with joy and enriches our lives with a deeper purpose. If we can turn this into a well-developed business, we add a special worth to our everyday environment. That’s the first and the most important reason we’re taking you on this journey: how to turn a hobby into a successful business.
The process of establishing a business from a hobby we enjoy doing could be a bumpy ride, paved with tough decisions. You might even find yourself doubting your sanity for even wishing to do so. Sure, it can all get a little too much. But this doesn’t have to be the case. Future entrepreneurs, here are our actionable tips to help you turn your hobby into a successful business.
Start with a Strategic Approach
In the early stages of creating your self-tailored business, it’s important to gradually prepare yourself for the transition you are about to make. You might wish to start small and start selling the first version of a product to a local community. The sincere reviews of your friends, acquaintances and family will help you to upgrade it before you hit the big stage. Collect the advice by talking to your entrepreneur friends for some tips about how they maintain a passion for their business, but also investigate what are their tips and tricks for a successful business. The connections you already have could provide a great pool of advice for cheaper suppliers, paperwork or more efficient marketing. So don’t hesitate to consult the ones who already found answers to your questions that will pop up!
Starting a business usually requires having a couple of months of expenses saved up, so it’s best to have start-up capital! Working full time while launching your business can be exhausting. But those pennies saved could do wonders when you decide to quit your current job. Most importantly, this is your final test! When you come home tired, knowing you have to spend a couple of hours on launching your business, make sure you do a quick self-check. Do you still love it? If the answer is yes, you’re good to go! If you enjoy the time you spent building up a business from your hobby, you will not likely regret the decision to monetize something you once did for an after-work enjoyment only.
Turn Hobby into a Successful Business: Research and Plan!
After testing the waters, it is time to make some concrete strides. In other words, you ought to research and plan if you want to turn your hobby into a successful business. Here’s where to start from.
To create a solid business plan and organize your finances accordingly, you have to do quite some research and planning. This essentially means answering questions such as:
- Who are your customers/target market?
- Who is your competition?
- What makes your product/service different from the competition?
- How will you stand out from the competition?
- Where can your customers find your product/service? Or: What are your distribution channels?
- How will you price your product/service?
- How will you attract customers?
- What would your monthly costs be vs what revenue can you expect?
- What are the initial costs you’ll have?
- What quantity of product do you need to produce in order to make a profit?
In your cost calculation try to include the start-up costs, new equipment you might need and monthly expenses. And don’t forget to add the self-employed taxes! Yes, we have to admit that this is not the most glamorous part. But the sum of all the expenses will inform you about the amount of income you should make to breakeven. It will help you form the price and to project your future profit when turning your hobby into a business.
Completing a business plan is the best way to formalize the idea and to crystalize its purpose. Knowing the inner why will serve as the guide in any business doubt. When the process is finished, try to determine if your business can qualify for possible external funding. There is plenty of fish in the sea, or in this case – available funds for good ideas!
Creativity Spur: Build Up Your Business’ Authenticity
Yes, you’ve got a great service or product to share with the world! Now it’s time to make it recognizable and authentic so that your audience could have an unforgettable experience! Think about your logo, design of the packaging, colours you would like to be dominant and the slogan. This is the time you can really express yourself.
At this stage, your hobby is just on a turn into a business, so it is still early for complicated branding plans. Yet, the base you come up with now will probably be upgraded in the future – but the most important concept and the visual idea should be set up in this stage. While your sales still need to fully accelerate, use the leap in your workload to devote full attention to details.
You can think about some thoughtful notes to send along with your products that are consistent with the general tone of your communication with the audience. Depending on the age group, it could be professional, friendly, joyful or even sarcastic! This adds another note of personality to your brand! If you’re a bit insecure with the design part, it would be great if you could reach out to friends who are into the design to give you a hand, or hire a freelancer.
Read more: Graphic Design 101 Starter Kit: Foundations
Set up your branded website and online store
So, we’ve come to it – the holy grail of any business in modern times! Although some small business owners might think that having a website is a luxury that can be avoided, the fact is that by going digital you can build up the resilience of your business. Here are some reasons why this is a great idea:
- It acts as an anchor for your marketing
- Promotes and sells your products/services
- Connects with new customers (and keeps existing customers)
- Helps local businesses compete with large brands
- Builds credibility
- Allows you to control your online destiny
- Is simple and affordable to set up
With a business website, you can build a much larger customer base and let them get to know your business in the best way. The fact is, other people, think so too. PayPal reported 1.7 million new merchant accounts in the second quarter of 2020. This is triple the amount it usually adds per quarter.
Customers are fond of the ease and convenience of digital transactions, and to be honest – who can blame them? Digital tools such as easy-to-use websites and online loyalty programs are motivating factors for clients when deciding where to shop. According to a Visa survey shopping for groceries or household items online increased by 34%. Ordering food with curbside restaurant pick-up jumped by 28%. While buying online or mobile rather than picking up in-store increased by 25%. Setting up an online store helps reduce operating costs, as processing digital transactions is less expensive than processing non-digital transactions if we include direct costs and labour expenses. Increasing the income with an extended customer base and decreasing the costs with digital transactions is just a combination from heaven!
Employ social networks to work in your favour
For consumers, this era is a modern paradise! If you wish to buy a regular shirt or even invest in an inflatable life-sized elephant, you’re only just a few clicks away from your purchase. Awesome news for the buyers, but often a headache for the business owners. The competition is just too high. Yet, in this case, there is a magic solution that can help to turn a hobby into your business on stable grounds: connections. Online presence is non-negotiable, and we would suggest you go all in!
Develop social media accounts that coincide with your target audience and be proactive along the way. Interact with your clients, be responsive and try to build relationships. Allowing the customers to get the sense of your brand’s purpose can form attachments beyond just one purchase. So roll up your sleeves folks!
Construct a detailed social media plan. Come up with your content at least a week ahead, and decide which time each post will be put up. Be consistent: include your customers in social media content, by sharing their posts of your product and engaging with them. This way you can build a closer connection with your audience. Finally, try to have complementary and consistent type of content throughout all of your social media networks. The post style, branding and colours, as well as the tone should be the same to improve brand recognition. If a good organization is not exactly in your top qualities, you can use specialized tools to help you with post scheduling, such as Everypost.me!
Read more: Businesses: Use Social Media to Your Advantage
Bonus Tip to Turn a Hobby into a Successful Business: Size Things Up!
Remember that time when your hobby was just an after-work enjoyment? As the business scales-up, you will be dealing with many tasks that aren’t directly product or service creation, but more operational stuff. The good news is, as the hobby turns into a successful business, there will come a time to hire interns and full-time employees! Your first employee hire is a huge decision, but it’s a crucial investment for your company.
Before you do so, don’t forget to design your company’s onboarding process that will outline your company’s culture and goals. As new members join, the workload will be divided, and you will be able to pass the operating parts and the logistics to your other employees. Finally, you will have more time to devote to the core of your business, or once just a hobby. Here, we have come a full circle! You are spending time on a job you love. And it brings you financial freedom. Our work here is officially done!
