If you’re thinking about turning your hobby into a business, you’re not alone. We’ve gathered advice from 15 successful entrepreneurs and business leaders, offering insights from researching all aspects thoroughly to familiarizing yourself with management. Discover their best pieces of advice to help you make an informed decision about your passion project.
- Research All Aspects Thoroughly
- Plan and Evaluate the Transition
- Create a Business Purpose Statement
- Develop a Strong Business Plan
- Test Your Hobby’s Sustainability
- Consider Motivation and Enjoyment
- Balance Work and Play
- Determine Target Audience and Competition
- Ensure Uniqueness and Success
- Start Small with an MVP
- Take Action and Just Do It
- Assess Market Demand
- Weigh Risks and Rewards
- Conduct Financial Viability Research
- Familiarize Yourself with Management
Research All Aspects Thoroughly
My best piece of advice for someone considering turning their hobby into a business is to research all aspects of the potential endeavor. From the legal and financial implications to the necessary marketing strategies, it’s important to develop an understanding of what running a successful business entails.
An uncommon example would be hand-making customizable furniture. Depending on where they reside, they will need to investigate any local laws and/or regulations, secure any needed licenses or permits, estimate material costs, create a portfolio featuring past projects, and ensure adequate liability coverage for customers.
By being cognizant of these points, someone can pursue their passion while still avoiding some common pitfalls in small business operations.
Plan and Evaluate the Transition
My best piece of advice for someone thinking, “Should I turn my hobby into a business?” is to carefully consider and plan out the transition. It can be tempting to jump into turning your hobby into a business, but taking the time to research and plan can set you up for a much higher chance of success.
Start by evaluating whether there is a demand for your product or service, identifying your target audience, and researching your competition. Create a business plan to help guide your decision-making and determine your goals and strategies for growth.
It’s also important to invest in your business by building a powerful brand and marketing your products or services effectively. Remember to stay flexible and adaptable as you navigate the challenges of starting a business, and don’t be afraid to seek help or advice from experienced entrepreneurs or professionals in the field.
Create a Business Purpose Statement
Craft a clear and concise business purpose statement that defines what your business would do. This statement should provide clarity on your business goals and values.
You should also consider your customer base when writing a business purpose statement—it should illustrate how your product or service positively impacts the people you serve. Beyond making a profit, this statement should summarize the reason for your company’s existence. If you can create a solid business purpose statement that successfully highlights the premise of your goals, then it may be worth taking the next steps to turn your hobby into a business.
Develop a Strong Business Plan
Figure out how it can make you money before you start. There’s nothing worse than turning something you love into a source of anxiety, so you should avoid turning your hobby into a career until you have a sound business plan in place.
An important step in the vetting process is market research to determine how much competition you have and what demand is like for your hobby. If it’s a saturated industry, you’ll need a strong digital marketing plan to cut through the noise and build a customer base. As with any company you may start, the best advice is always, “Research, research, research.”
Test Your Hobby’s Sustainability
I started freelance writing on the side, but I didn’t go full-time with it until several months later. Even though I quickly gained enough clients to fully replace my income, I wanted to make sure I wasn’t just experiencing beginner’s luck. I wanted to feel confident I could sustain my income.
I also wanted to make sure I’d enjoy writing full-time. While writing as a side hustle, I was only spending a couple of hours a day at the keyboard. Going full-time would mean spending significantly more time sitting in front of a screen. I didn’t want to burn out in a few months.
Testing your hobby for business sustainability can keep you from making a costly mistake. If possible, take a week off from your regular job to see if you could do your hobby full-time. Make sure it will earn you enough money to justify quitting your day job and see if you enjoy it enough to do it all day, every day. This experiment can be very revealing about what you really want in a career.
Consider Motivation and Enjoyment
The primary reason that we find hobbies fun is that we are intrinsically motivated to engage in them. Our motivation comes from enjoying the activity in and of itself, not based on any kind of external reward.
Turning a hobby into a business, however, introduces extrinsic motivation, i.e., money. Research shows that extrinsic motivation is less personally fulfilling and does not yield the same positive emotional impact that intrinsic motivation does. Consequently, you must anticipate losing some of your intrinsic motivation and enjoyment of the activity itself.
However, if you believe you can overcome this hurdle, then turning your hobby into a business is the right decision, and you should pursue it wholeheartedly.
Balance Work and Play
Ask yourself, is this hobby something that is currently an escape from the day-to-day tasks of life, and if I start doing this as the main task of the day, and start allocating pressures and deadlines to it, will it damage my relationship with the hobby?
I have seen passionate, highly skilled people who had this incredible talent for their hobby; then, once they professionalize it, they lose a part of the magic of it being a hobby. This is not to say that everyone has this experience, and in fact, if you can find a mental balance between play and work within the capitalized hobby, then it can be an extremely fulfilling journey. As Mark Twain famously said, “Find a job you enjoy doing, and you will never have to work a day in your life.”
You can pre-deal with the issues above by ensuring you set aside time for play amongst the work of your newly capitalized hobby. Make time to explore, innovate, and create amongst the work orders.
Determine Target Audience and Competition
While turning your hobby into a business can be exciting, it is important to first validate its demand in the market. Conduct market research to determine if there is a demand for your product or service, who your target audience is, and what your competition looks like.
Once you have validated demand, create a solid business plan that outlines your goals, budget, marketing strategy, and financial projections. Be realistic with your expectations and start small to test the waters. Remember, turning your hobby into a business requires dedication and hard work, but can be rewarding if done right.
Ensure Uniqueness and Success
If you’re considering turning your hobby into a business, my best advice would be to start by doing thorough research and planning to see how you can transform your idea into something unique.
Doing this is important so you can make sure your hobby isn’t a copy of something else and that it will have a path to market success. Just because you are good at something doesn’t necessarily mean it will be commercially successful, so this is key. And if your work is similar to what’s already out there, instead of giving up, you can find ways to make it different from those you researched.
It’s also important to be aware of the challenges and risks involved in starting a business. Turning a hobby into a business can be a rewarding experience, but it can also be stressful and time-consuming. Make sure you’re prepared for the commitment and hard work by getting yourself in a good place mentally first.
Start Small with an MVP
As I’m currently doing exactly that while also working full-time, I thought I would chip in.
It’s important to start small and ask yourself how you can test if it’s even possible to turn your hobby into a business. Maybe start creating a website and see if people will visit it when you share it.
Maybe see if you can “sell” your hobby just to a few people in your network. There can be many different ways you can test it, but create a minimum viable product (MVP). And if the feedback is positive, then you start doing more, and then you can go all in.
Take Action and Just Do It
People struggling with this question are the rule, not the exception. There is a line in the sand that differentiates entrepreneurs from wantrepreneurs—stop analyzing and just do it.
You will never be as young as you are right at this moment. You are the youngest you will ever be and the wisest you have ever been. If you have a dream or an aspiration, take the first step—the most difficult one—or your dream and aspiration will grow old and eventually die with you.
Every business idea or plan has a set of concrete first steps. Identify them, commit to specific daily time allocation (even if just 30 minutes to start), and just do it.
Assess Market Demand
It is important to assess the market demand for your hobby before trying to turn it into a business. Conduct thorough research to understand the existing and potential demand for your product or service.
Analyze your target audience, their preferences, and the competition. Create a detailed business plan that outlines your goals, pricing, marketing strategies, and financial projections. Test the market by offering your product or service to a small group of people to gauge customer feedback and demand. Only move forward with converting your hobby into a business if there is a viable market demand.
Weigh Risks and Rewards
As long as you’re indulging in a hobby, your expectations are mostly limited to the satisfaction and happiness you derive from it. When you transform it into a business, you will aim a lot higher.
While the impact of your own brand, coupled with the fulfillment of doing what you love, will prove highly rewarding, you will also expose yourself to the risks of failure and disappointments. Anyone who has ventured into the arena of business will agree that it is primarily a high-risk, high-reward proposition.
So no matter how hopeful and confident you may be, also prepare for scenarios where things can go wrong.
Neil Platt, Director, Emerald Home Improvements
Conduct Financial Viability Research
Conduct extensive research on the financial viability of any hobby you’re thinking of turning into a business. This research can help you determine if there’s demand for your offering, the intensity of the competition in this market, the major costs associated with setting up and operating the business, and the potential profits you might generate within the first month, quarter, and year.
With this information, you can determine if there’s a sufficient customer base to support your business and bring in consistent revenue and profit. These insights will also help you identify your most profitable and competitive pricing point should the venture prove to be financially viable.
Familiarize Yourself with Management
Turning your hobby into a business can be rewarding, from doing something you love daily to receiving others’ feedback and recognizing your talent.
The other side of turning your hobby into a business is making sure you’re familiar and comfortable with the business operations and management part. While you’ll get to do something you love frequently and get paid for it, you’ll also need to focus on marketing, branding, finances, operations, and more.
You don’t have to be a pro in business management to start a business, but you should familiarize yourself with the different aspects of business management to ensure you’re comfortable learning about it, hiring help, and creating healthy expectations of your time division between your business management and focusing on your hobby.