How to turn your hobby into a businessPosted: April 17, 2016
Running a business around a hobby is a popular choice from work at home Mums. Hobby-based businesses can provide a small income to further fund your participation in your hobby, or can be the inspiration for a fully-fledged business.
Here are five pointers to get you thinking:
1) Is it possible to ‘monetise’ your hobby?
A rough and ready way to assess whether you can actually make money from your hobby is this:
Cost of raw materials + Time taken to make an item (x 2 to account for marketing, admin etc) x your accepted hourly rate
This is the figure you would need to sell the item at (excluding postage etc) to make your business ‘worthwhile’.
2) Will you still enjoy your hobby when it is a job?
Getting paid to do something you are passionate about sounds perfect. But would you still enjoy your hobby if you ‘had’ to do it?
Imagine your hobby is textile crafts. As a hobby, you have the luxury of taking as long as you like to create and perfect each piece. But if it was a business, you would have to be more disciplined about getting items made in a certain time. Would this affect your enjoyment of your hobby?
3) Is there too much competition?
One of the problems with ‘hobby’ businesses is that lots of other people may have the same idea, and because it is perceived as ‘enjoyable’ many people expect to pay (and many businesses are happy to provide) low prices for the products or services. It might not therefore be profitable to compete in this field.
Think laterally! You could adapt your business idea so rather than (say) selling knitwear, you teach people to knit. Or set up a website selling knitted goods made by other mums.
4) Consider how to reach your customers
As well as making your product, or providing your service, you need to think about how to reach your target customers. There are a number of routes available from selling on third-party sites (ebay, etsy etc) to attending events or hosting parties.
5) Even hobby businesses need to be registered!
You need to be appropriately registered to pay taxes from any income from a hobby business. The first step is to register as self-employed at http://www.hmrc.gov.uk within 3 months of starting your business, whether or not you are making any profit.
6) Already running a hobby business?