Turning Your Hobby Into a Business; All You Need To Know
Do you have a hobby that you’ve just been itching to monetize? Well, there is no better time to do it than now. But you may be wondering if it’s actually a viable business idea. Because as we all know, it takes a little more than just passion to launch and run a successful business. So many things could go wrong. For instance, you may discover that turning your hobby into a business is not feasible in the long run and won’t earn you enough to make a living. Alternatively, you may discover that you don’t enjoy doing your hobby as a full-time job.
As such, you should tread very carefully and follow a methodical plan. Today, we are going to give you some steps that you can follow to effectively turn your hobby into a profitable business.
- Clearly define your goal
Before doing anything irreversible, you need to clearly lay out your goal. Do you want a side hustle or are you looking for a full-time gig? Are you planning to fully depend on this business for all your financial needs or is it just an additional income source? Are you willing to quit your 9 to 5?
These are all questions you need to answer before going forward with any business idea. The clearer your goal, the easier it will be for you to achieve it.
- Do your research
One of the dangers of turning our hobby into a business is that you may be so in love with your idea that you don’t see its faults. To avoid future disappointment, you should conduct extensive market research to figure out if what you are providing is attractive to your target audience.
You should also research the easiest way to create the most profit from your hobby.
- Set up a realistic business model
Once you get a feel of how exactly you intend to make money, you should identify what business model you are going for. You will need to know how much it will cost you to create your product, how much it will cost you to sell it, and how much your target market is willing to pay for it. More importantly, you’ll need to figure out which distribution channels you’ll use for your product.
- Carry out a test run
To truly validate your idea, you need to do a test run. Fortunately, in today’s world, there are several ways you can do this. For instance, you can take preorders, sell a limited run, or even create a coming soon landing page.This will let you easily gauge customer interest and see whether such a venture would be successful. For this to work though, you need to be clear on your metrics of success. With clear targets in mind, you can confidently understand the potential of a business.
- Write out a business plan
Now that you’re sure that you have a good idea, you should come up with a business plan. This will help you put together all that you’ve learned so far and come up with realistic financial estimates.
While you don’t have to create a 30-page document, you can create a simple one-pager with all the information you need. This way, you’ll have something to refer to when pitching to investors or seeking out a loan.
- Come up with a clear financial plan
Although a business plan will go a long way in helping you lay out a cost structure, you must also come up with a detailed financial plan. You will have to include a sales forecast, break-even analysis, cash flow statement, and profit/loss statement.
This information will go a long way in helping you secure loans and funding from investors. You will also gain deeper insights into what you can and can’t afford for your business.
- Perfect your marketing skills
The success of your business hinges heavily on your ability to effectively market your product. At the very least, you should have a functional website and active social media accounts. Moreover, you can run ads on Facebook and Google to gain traction.
When choosing a way to market though, consider the demographic you are targeting. For instance, if your target market is mainly millennials, TV ads won’t be effective as they rarely watch TV. However, if they are baby boomers, this could prove quite efficient.
- Register your business and snag your first customer
If you are planning to turn your hobby into a fully-fledged business, you will have to register your business. This does not apply to those who are just looking for a side hustle though. But do you know what applies to both these groups? The need to snag their first customer as soon as possible.
While it can be tricky snagging your first official customers, there are a few strategies you can employ. For instance, you can offer promotional discounts or even free services for reviews. This way, you can attract people who wouldn’t have bought your product otherwise and build a strong reputation early.
- Have clear milestones
To ensure that your business is always going in the right direction, you should set up clear milestones. These will guide your business decisions and let you know when it’s time to change direction.
As much as you should have milestones for your business, you should also have some for your own professional development as an entrepreneur, especially if you’re planning to do this full time.
Once you finally manage to gain some traction for your business, you should network and look for other like-minded people. Having a community of fellow entrepreneurs will be of great help when you need some business advice. It is particularly important to get a mentor.
Having a mentor provides you with invaluable advice and guidance throughout your entrepreneurship journey. Whatever you do though, don’t try to force this type of relationship. Let it come naturally to both of you.
Ultimately, if you have decided to follow these simple steps and turn what you love into a business, beware that things won’t always be rosy. So when things get dull, remember that it is up to you to shake things up again and bring back the excitement to what you do.