How to Turn Your Hobby into a Business - The Krazy Coupon Lady
Have you ever dreamed about quitting your day job to pursue your hobby full time? I know I have! Although it can be a scary proposition, more and more people are making the transition from hobbyist to business owner. I have a good friend who started selling her homemade pillows and blankets on Etsy, and her venture ended up being successful enough that it pays for all of her family’s vacations! Many famous folks are in that league, as well – Jordan Hembrough (aka the Toy Hunter) and even Mark Zuckerberg, who has said that he began Facebook as a hobby, not a business. Okay, so maybe your hobby won’t be the next Facebook, but if you’ve been toying with the idea of taking your hobby to the next level, here are eight tips to help you along the way:
Before you jump in and start selling your wares, it’s important to really take the time to research the market to see if it’s possible to make money. Check out all of your would-be competitors to see what kinds of products are already out there and at what price. If there are already a million people selling the same product as yours, how can you make your item stand out? It’s also important to look at your own product with a scrutinizing eye. Is the quality good enough to sell? Would people (other than your family members) actually pay for it? If you purchased your item from someone else, would you be happy with it? If you can’t honestly answer yes, you may need to work on improving the quality of your product before you start selling it. To learn more about how to begin the process of market research, check out Entrepreneur.com, which gives would-be business owners tons of tips.
Creating your product can be tons of fun – after all, that’s why it’s your hobby, right? Crunching numbers…not so much. However, setting the price is a key factor for building a successful business. You’ll need to price your goods high enough to cover all costs and still bring in a profit but low enough to attract customers. There are quite a few costs that you need to factor in that you may not have considered, such as material fees, listing fees, commissions, Paypal fees (if you choose to use Paypal), and startup costs. Setting up a spreadsheet with your projected costs is one of the easiest ways to start. From there, you can decide on your markup. For more tips on determining your best price point, check out the Etsy Blog, which offers a simple formula for setting prices, and read about more pricing strategies at Entrepreneur.com.
3. Choose a distribution method
Next you’ll need to decide how and where you want to sell your goods. There are many options out there, depending on what you’re selling. Etsy is the preferred choice for many, but there are plenty of other options. If you’re an artist or designer, consider RedBubble, which takes care of all production, packaging and shipping so you can focus primarily on creating. Another option is Fiverr, where folks offer up their goods or services for $5 each (or more for additional items). Other options are to set up shop at local craft shows and farmers markets, sell on eBay or host parties that feature your products in your own home.
Social media has made it much simpler to reach potential customers, but how do you stand out in a sea of products? Of course, you’ll post your goods on Facebook, but don’t just leave it at that – take advantage of every outlet! Pin your items to Pinterest, snap pics on Instagram, ask friends and family to share your listings and do whatever you need to do to get noticed! Don’t just stop there – think of unique ways to network and get your product seen. Let’s say you sell hair goodies – consider emailing a few of your favorite fashion bloggers and offer to send a few of your items for them to give away. Many bloggers would be thrilled to have your items to give to their fans, and you’ll get great exposure! For more on marketing plans, check out Bplans.com, a free website that offers over 500 sample business and marketing plans.
Now that you’ve done your research and you’ve priced your wares, it’s time to start selling! Most hobbyists-turned-business folks test the waters before they go all in. You don’t want to quit your full-time job and just assume that you’re going to be successful. Instead, list a few items, work your marketing strategy, and see if they sell. If they do, list a few more, and so on. If they continue to sell and bring in a good amount of capital, then consider the possibility of pursuing it full time.
6. Treat your hobby like a business
Even though you may still be spending hobby hours on your business, it’s important to treat it professionally. After all, it doesn’t matter what else you have going on in your life, customers are going to expect to be treated as they would with any other business. That means getting packages out in a timely manner, responding quickly to emails, and addressing any problems or issues. Being unprofessional can easily be the downfall to any would-be business. In fact, according to the White House Office of Consumer Affairs, the average customer who has a bad experience with tell 9-15 other people about it — and you want your customers showing off your product, not complaining about it.
The majority of financial analysts will tell you that keeping your business and personal assets separate is key, even if you just open up a separate checking account. The main reason for this is simply for liability and tax purposes. If you don’t, you might be kicking yourself come tax time when you have to try to dig through your personal bank account to find all of your business expenses. Even beyond just dealing with taxes, separating expenses can definitely create a new state of mind. No longer is this a hobby that you hope to do something more with someday – this is for real, and you’re doing it right now!
The majority of successful hobbyists-turned-business folks didn’t become successful overnight, so it’s not realistic to think that you will be any different. Continue to read up on different strategies, and take advantage of the great free resources out there, such as the free business books available for Kindle (there are over 700 of them!) and the U.S Small Business Administration, which offers tons of information and tips for small business owners. Remember, building a business can take quite a bit of time and a lot of hard work, but if you’re passionate about it, stick with it and enjoy the time you spend on it!