Five Ways to Convert Your Hobby Into Your Business

Have you ever just spent some quiet time considering what you love to do, without regard for that which you’re educated, trained, or “expected” to do? The answer may have absolutely no relation to your current career or job.

Global economic turmoil, like the recent recession, has a way of motivating people to think about this subject. Do you have a current hobby or have always wanted to adopt a hobby that involves something you’d love to do?

Hobbies Mean Fun or Profit, or Both

Hobbies can be just pure fun. Painting, playing computer games, sports activities, or crossword puzzles, for example, can be rewarding ways to spend your leisure time away from the workplace. If you are enduring a less-than-challenging job, your hobby may become even more important to your quality of life.

Other hobbies may combine enjoyment and potential profit. For example, collectors of stamps, coins, art, music, baseball cards, or other items may offer both joy and the potential for eventual appreciation of value. Some collections, over time, become valuable assets, selling for many dollars.

Still other hobbies may offer the potential for you to create a living, hopefully thriving business. Author, journalist, attorney, and entrepreneur Susan Solovic, addressed this issue in her recent article in the Wall Street Journal, “10 Tips to Turn Your Hobby Into a Business.” Her new book, "It’s Your Biz: The Complete Guide to Becoming Your Own Boss," should be released in October 2011.

If your hobby is a passionate, enjoyable pursuit, you can analyze the merits of converting it to an operating business. Wouldn’t it be wonderful to turn those tedious hours at a dead-end job into exciting days that generate regular income? Some hobbies should stay hobbies, while others lend themselves to a conversion to commercial ventures.

The key is to make an honest evaluation of the potential. Even if you decide the probabilities are less than encouraging, you can still proceed with enjoying your hobby to its fullest. Here are some suggestions to evaluate the possibilities.

Converting Your Hobby Into Your Business

1. Consider and estimate passionate feelings for your hobby. Before other steps, honestly evaluate your level of happiness and passion for your hobby. This is one of the few situations when a totally positive attitude is not helpful. The key word: Honesty. Should you skip this step and dive into a business, you might join a large fraternity of people who quickly became disillusioned with their hobby-turned-business. Thousands have found that their great joy evaporated when their hobby became a morning-to-night full-time business responsibility. Spend quality time considering the depth of your “happiness quotient” for your hobby. If it’s real, deep, and highly passionate, only then should you move on to step two.
   
   
2. Analyze the potential market and calculate pricing concerns. It’s time to become more scientific and data-oriented. Analyze the current and projected market to learn if there is a niche that needs to be filled by your hobby/business. For example, if your hobby involves repairing and tuning carburetors, you might want to discard your business idea or commit to becoming an older auto mechanical restoration specialist. Few, if any, newer vehicles even have carburetors, since they use computerized fuel injection systems. Analyzing the market for your product or service will identify the potential monetary success of your adventure.
   
   
3. Test out your idea to see if it works. If your results of steps one and two are encouraging, consider testing your findings before jeopardizing your current source of income. Just as all major companies run real-world product trials and operate beta testing, you should prove your conclusions on a part-time basis to justify continuing the business. You might enjoy growing success or experience failure—both of which are valuable. Strong success may permit you to move to full-time operations fairly quickly. Failure will deliver valuable and cost-effective lessons that should a.) allow you to modify your idea to reach success, or b.) save you time and money with realization that your hobby should remain a leisure-time pursuit.
   
   
4. Estimate the capital (money) you’ll need to start the business and survive through the initial hard times. Frustrating at first for non-accountants, estimating needed capital gets easier as you learn more about the world of business. This step also forces you to become an expert in your industry, learning about sales, expenses, inventory, tax issues, and fiscal planning. As your knowledge base expands, you’ll find financial and operations planning becomes easier and more accurate. You may be quite surprised when you total up the amount of money you need to “do it right.” First time entrepreneurs often learn that much more capital is needed than they first assumed. Don’t worry. If your idea has merit and you’re persistent and thorough, investors and lenders will step up, should you need them.
   
   
5. Choose your marketing strategy, distribution channels, production methods, effective business name, and projected start date. If you “survive” the first four steps, you’re ready to jump in. Finally, the “fun stuff” can begin. Decide how you will sell your product, how best to market your business, how to efficiently produce your product or buy finished inventory inexpensively, and set a tentative birth date. Be sure to choose your business name carefully for two important reasons. First, you’ll need to register it with your local or state government. If another business has a similar name, you may not be allowed to use your first choice. Second, don’t limit yourself to a name that may only work during your venture’s infant years. For example, a cutesy, local name may initially sparkle. But, suppose you decide to become an e-commerce company, selling to the planet via the Internet or begin franchising your successful business around the United States? Marie’s Elm Street Dog Grooming Salon may be quite restrictive. Developing a strong brand is critical for growth purposes and a key to longevity. Choose a name that will work forever.

These five steps are the minimum components of converting your hobby into your business. Other necessities face all new businesses, but these specifically apply to hobby-to-business decisions. Should you encounter negative results from any of these steps, you’re probably better off keeping and enjoying your hobby as a hobby.

However, if your analyses and evaluations project success or, at least, viability, reach for your dream. Your entire quality of life may change for the better. It’s never easy, but if you really have deep love and passion for your hobby, it may become a successful career.

Source:
http://online.wsj.com/article/SB10001424052748703730804576319724125346708.html?mod=WSJ_hp_MIDDLENexttoWhatsNewsFifth