How To Turn Your Hobby Into a Profitable Business

Payever
payever
Published in
14 min readJun 6, 2017

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Do you spend all day at work wishing it was finally over, so you can get down to business with what you actually enjoy doing? It is our hobbies that keep us going through the most tedious parts of the day. If your hobby is what you love doing why not “get down to business” with it, literally? After all, you should enjoy your job since you spend most of your time doing it. The question is, how do you turn your hobby into a business?

Although converting a hobby into a business is no easy venture, we hope to pour a bit of entrepreneurial inspiration into your mind and point you in the right direction.

Let’s take things step by step. What should be the first thing you do?

1. Self-Assessment

Of course, the idea of making money with your hobby is exciting that is why many startup entrepreneurs rush into it without thinking. This kind of rush can prove fatal to your business venture. Therefore, if you want to succeed, you should carefully evaluate your personal conditions.

You need to be honest with yourself. Will you still enjoy your hobby if it is put under financial pressure as well as customer scrutiny? Will you be able to devote sufficient time to developing your business along with other responsibilities such as your day job or family?

The truth is, the stress of working to a schedule and bearing the financial burdens of a startup can result in you completely hating your hobby. So, do you love your hobby for the effect of relaxation or for the activity itself, no matter the circumstances?

Making your passion the main source of your income will take the relaxation element out of it, at least for the first 1–2 years. You need to be ready to make sacrifices. Though we promise, with the right planning, it is bearable and at the end completely worth it.

Assess:

  • Finances (Can you afford to quit your job? If yes, for how long can you support yourself without income? Alternatively, do you have time to work on your business while keeping your day job, at least until you start generating revenue? Many hobbyists start their business as a side hustle.)
  • Time & Discipline (Do you have the time to invest into your business and the discipline to keep going when things get tough?)
  • Support System. It may or may not get tough, but if it does, it is nice to know you have people to rely on. Your family, partner or whoever is closest to you should be on the same page. Stress in professional as well as personal life would be tough on anyone.
  • Can You Sell Yourself? Business is not a place to be shy; customers need to see you are confident about your product. If you are not sure about this, do not worry, selling is a skill you can learn.
  • Do You Like the Challenge? Do you? You better! It is gonna be a challenge, no matter how much you love what you do.

2. Market Research

You might love your hobby to bits and pieces, but before you start a business, you should make sure you are not the only person on Earth who enjoys the activity or its final product. Zero interest is a big red flag for your business idea.

If you already have friends and acquaintances showing interest in your skills, it is an excellent sign. In fact, Many hobbies develop into businesses without the hobbyist even noticing. In any case, you need to make an assessment of the market you intend to enter, not just to evaluate your competition but also to learn more about your target audience.

  • Check the social media buzz related to your niche & products by using hashtags and keywords to assess the overall interest.
  • Determine the biggest competitors in the industry. Review their prices and marketing strategies (e.g. social media presence, blog, email marketing, etc.)
  • Create a buyer persona, a fictional, generalized representation of your ideal customer. It will help you to relate to your customers as human beings, understand them and thus create more relevant content & marketing strategies.
  • Identify industry trends that can help or hamper your business
  • Check laws and licensing that apply to your business, there might be special regulations especially if you deal with food or any chemical product.

3. Business Model

Choosing a business model is not easy but it is crucial as it can affect your liability in times of crisis as well as tax rates.

The most common and the easiest business model for startups is a sole proprietorship:

  • The easiest & most inexpensive of all business structures
  • Complete control over direction of the company
  • Easy tax prep and reporting
  • Full personal liability (if something goes wrong, it is all on you)
  • Difficult to raise money (investors and banks trust less in sole proprietorships)
  • You are all alone in this, which can be stressful at times

If you have a partner, you can opt for a partnership, or, if you want to protect your personal assets it is smart to go for an LLC (Limited Liability Company). Ultimately, choosing a business model depends on your preferences as well as personal & financial circumstances.

For those selling a service (be it online or in person) becoming a registered freelancer is not a bad option either. Make sure to check the required paperwork and tax conditions.

4. Business Plan

If you are starting small, you do not need a grandiose business plan. However, writing down a couple of pages can help you visualize your journey and the resources you will need. Try to think and determine the following:

  • What, how and why are you doing this?
  • What is your workflow? How much time do you require to provide the service or create a product that you offer?
  • What is your current monthly income? Where does the money come from? Will you rely on loans (even partially)? If so, what are the conditions? What are your estimated monthly expenses? Consider every relevant detail such as rent, bills, employees, materials, transport, website fees, or marketplace fees, etc.
  • Where will you offer your product or service? Is there a possibility to expand to other platforms or venues eventually?
  • How will you determine your pricing? Are there any price incentives you could offer your customers?
  • And finally, based on all of the above, what is your timeline for growth and profit? What are your expectations for the upcoming month/quarter/year?

5. Get Legal

Before you have fun, you have to get the tedious paperwork out of the way; you do not want the government on your back for doing something illegal by accident.

  • Employer Identification Number (EIN). The government requires all businesses to obtain EIN to be used for tax purposes. You will need it in your everyday business transactions such as opening a business bank account, or anything else connected to your business. In the US you apply for EIN with the IRS; however, it is different with each country.
  • Business Checking Account. All of your business-related transactions and finances (revenue and expenses) should be run through a central checking account; this will make your accounting much easier.
  • Business Credit Card. A credit card is very handy when it comes to business expenses. They usually come with an interesting reward system. Since you will be buying quite a lot of inventory from your wholesalers, you can earn some top-notch rewards and benefits. Be sure to check out this list of best credit cards for your business.
  • PayPal Account. Open a PayPal account tied directly to your business; you will most likely need it.

6. Find Places to Sell

Next step on the ladder to turning your hobby into a business is choosing the right place to sell your product. There are several options you can go for depending on the type of business you want to run.

Marketplaces

Marketplaces are great mainly because you can start doing business immediately with minimal hustle. Their main plus is the free traffic you get without having to worry about marketing or SEO since these platforms already built a name for themselves. The downside is the fees as most of these platforms will ask for a small percentage of your earnings for letting you sell you merchandise on their site. Nonetheless, it is a very apt way to introduce yourself to the world of eCommerce.

Etsy. Etsy is the place to sell if you want to limit your costs as well as test the waters a bit. It charges a small listing fee of $0.19 per listing, 3.5% transaction fee once the listed item is sold and 4%+ $0.30 per payment processing. This is still markedly cheaper than other online marketplaces. Small price to pay for 30 million registered shoppers. Be aware; the competition is fierce.

Handmadeology. This is a blog which teaches artists to sell their products online, but they also have an online market which is a place where you can buy and sell handmade or vintage items and craft supplies. There are no listing or monthly fees involved but they are selective about the products they allow on the site. Make sure your quality is top-notch.

Zibbet. Zibbet is a one of kind marketplace for craft products. It has no listing or transaction fees. Instead, there is a monthly subscription starting at only $4 a month. The price includes a custom domain for your store which enables you to establish a brand image (usually not otherwise possible in online marketplaces).

DaWanda is a marketplace offering a mix of gifts, vintage items, and handmade products. It has an international reach and lets you set up your brand profile. At the moment there are no listing fees but a 10% per-sale charge.

Aftcra. Aftcra, as other markets, is a place to buy and sell handmade items. However, all products sold on the site must be crafted in America. Only crafted, up-cycled products or prints with a handcrafted design. No listing fees, just 7% fee when your items sell.

Amazon. This marketplace is international, well-known and easy-to-set-up. You can sell any product you want. However, if you sell crafted items, the site has a special Amazon Handmade platform. You will need to be approved, but afterward, your handmade status is bulletproof. Sadly, there is a $0.99 per item fee and a 12%-15% referral fee.

eBay. eBay is America’s favorite auction place. It gives you access to a huge customer pool totaling 160 million shoppers. You can list up to 50 items a month for free (Yay!) but after that, you pay 35p per listing. You can choose to auction or do a direct sale. You also pay a fee that is 10% of the final cost (including postage). An extra fee of 3.4% +20p is due if your buyer uses PayPal.

If you sell services such as coaching or tutoring in the area of your expertise or simply want to have a store with a unique flair, you can opt for a SaaS platform. “Software as a service” platform is a piece of software that runs on somebody else’s server. It does not give you access to the code.

Quite simply, you create an account which will provide you access to edit your settings and content via already provided interface and tools. It is easy to set up but might be too overwhelming as you need to fight for even a small percentage of traffic you get by selling on marketplaces. You will need to study up on SEO and user experience strategies. Some of the platforms are payever, Shopify or BigCommerce.

7. Establish Online Presence

For a small startup business with limited budget, social media provides an excellent opportunity to raise brand awareness, market new products, build followers and eventually drive sales for free (if you do not count your allegorical sweat and tears).

Number one rule of your business social media strategy: keep it professional. Your brand account is not a place for sharing random personal likes and dislikes or cute cat videos. If you want to drive relevant traffic, you need to be smart. Literally, SMART approach to goal setting as described in Paul J. Meyer’s book Attitude is Everything:

  • Specific. The more specific your goal is, the easier it is to determine the actual steps that need to be done. Who do you want to reach? What do you want to accomplish (brand awareness, purchase, brand advocate)? Why do you want to accomplish it? What are the obstacles you need to overcome?
  • Measurable. Your goal should be measurable with the social network’s own metrics system or an outsider tool. You need to track your progress to know whether or not you achieved your goal.
  • Attainable. Be realistic. To have 100 000 followers in a month is “a bit” over the top. Set a goal that is achievable yet still challenging.
  • Relevant. Your goal should not just be relevant to the type of your business but also to the stage you are in. Ask yourself if the goal you want to achieve is appropriate for you at this very moment. For example, you do not want to focus your content marketing on getting 1000 orders at once if you are incapable of delivering so many products in such a short amount of time.
  • Time. Goals are meaningless without deadlines. You have no boss breathing down your neck. You are the only one in charge and it is easier than you think to slip down the slope of endless procrastination. Give yourself a deadline and be serious about it!

You need to define your target audience. We mentioned a ‘buyer persona’ before, and this is the time you can take advantage of the concept. Your buyer persona will help you narrow down the audience for maximum conversion and choose the right social platforms.

Dreamgrow researched and listed the most successful social media in 2016:

They also looked at the most successful social apps. Although not occupying the front positions yet, Snapchat is one of the fastest growing apps (with higher user engagement that Facebook or Instagram), so keep an eye on it.

Just joining all the networks is a bit of a time waster. Remember the ‘Relevance’ point in your SMART approach to social media. It is evident that Facebook is still an absolute must, but the rest can be tailored to your needs. If you want to sell handmade products, it is clever to focus on image and video oriented networks such as Instagram or Pinterest where you can show off your craft.

A few handy tips to get you started and help you differentiate from the competition:

  • Get Personal. Yes, I know, I said to keep your business account professional, and I stand by it. By getting personal, I mean giving a human face to your business. The time when faceless corporations ruled the business are gone. People want to connect. Showing who you are and sharing your story, your WHY, with potential customers can create a very powerful emotional incentive. People connect with stories, so share your passion. BUT, be relevant and appropriate.
  • Be Real. This means, do not try too hard to look professional. It is always better to use your pictures and own videos to promote your brand, even if they are not perfect. Using stock photos or bland universal content will not help you much. Do your own thing.
  • Be Selective About What You Share. Focus on posts that are helpful, entertaining and niche-related. Of course, you want to provide value to your audience and make yourself worthy of being followed. If you do not have a blog or are not a great writer you can always make videos, vines or amazing pics and memes. Try out what works for you best.
  • Be Consistent. I cannot emphasize this enough. Whether you post once a week or once a day, keep up with your schedule. The worst thing you can do is disappear for a month and lose the few followers you worked so hard to win.
  • Use a Management Tool. To be consistent requires organization. A decent management tool such as Buffer or HootSuite can help you organize and schedule your posts in advance across multiple platforms.
  • Join Groups. Groups and communities are still quite popular on Facebook and can be quite useful. Join any group that is relevant to your niche and take part in the conversation. There are even groups that are specifically dedicated to selling and allow you to list items and mark them as sold when somebody purchases them. Just use the Facebook search to find the right groups for you.
  • Interact. Do not just sit there waiting for people to find you magically! Interact! Be interested in what is going on in your industry and encourage conversation wherever possible.
  • Follow Competitors. Keep an eye on your main competitors. What kind of content or promotions they post? What time do they post? How often? Who do they follow? Who is following them? You can learn from their success and their mistakes.
  • Use Keywords & Hashtags. Do not underestimate the power of social search. Social media optimization is getting more accurate, and you should capitalize it. Use relevant keywords and hashtags to categorize your content and get a better chance of being found by people.
  • Post LOTS of Images. Images rule the social space. Image posts are more likely to be noticed, liked and shared on ANY social network.
  • A/B Test. What does that mean? Post the same link or pic with a different headline, at a different time or on a different platform. Getting the best results is all about testing.
  • Measure & Analyze. Track everything you do as well as every reaction (or lack thereof) to your posts. Reviewing your performance will help you identify weak points and get better.

To Wrap It Up…

So, found some interesting ideas? Are you ready to turn your hobby into a business? Hopefully, we did not scare you off but rather inspired you a bit. Of course, there are plenty of things to learn, but that comes with trying something new. In any case, if you want to transform your hobby into a business, there is a way. It is challenging but also incredibly rewarding. Are you thinking of getting into the online business? Leave us a comment! Perhaps we can help you; we like doing that.

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